It’s almost as if data breaches, cyberattacks, ransomware attacks, phishing scams and other forms of cybersecurity incidents are becoming a common occurrence.

Not too long ago, the Durham District School Board—a school board northeast of Toronto—revealed that it experienced a cyberattack that impacted at-home schooling. The cyberattack also impacted phone and email services at the school board, as well.

Due to the cyberattacks, the board had to cancel several online classes and postpone a literacy test (OSSLT). Parents of students were told that the board was unable to receive calls but was still able to make calls to parents or to emergency services.1

Sadly, the cybersecurity incident at the Durham District School Board is just the tip of the iceberg.

In the first half of 2022, there were 2.8 billion malware attacks globally and 236.1 million ransomware attacks. By the end of the year, it is anticipated that six billion phishing attacks will have been launched.

As cyberattacks have become rampant, the Institute of Electrical and Electronics Engineers (IEEE) recently conducted a survey of 350 chief technology officers, chief information officers, and IT directors about the most important technologies in 2023. The survey revealed that 51% of executives see cloud vulnerabilities as one of their top concerns. 43% of executives mentioned data centre vulnerability as their top concern.

Other areas of concern for cybersecurity executives and professionals included ransomware attacks, coordinated attacks on an organization’s network, and the lack of investment in security solutions.2

Overall spending in the tech sector has also dropped due to the impending recession, which has forced CISOs and security leaders to cut back specifically on cybersecurity spending. With less hiring in the cybersecurity industry, it could further worsen the skills shortage.

In addition, a recession is likely to encourage cybercriminals to create new types of threats. According to the FBI, there was a 22.3% increase in online crime reports between 2008 and 2009.3

As a result, companies in the industry are issuing warnings. The CEO of CrowdStrike Holdings, Inc., a leading cybersecurity solutions provider, announced that due to increased macroeconomic headwinds, sales are getting impacted.

Similar sentiment has also been conveyed by Palo Alto Networks Inc., owned by the fund.

According to analysts following the sector closely, it could be a signal that more weakness could be ahead for cybersecurity companies.4

Updates on Specific Cybersecurity Companies

GDS Holdings Ltd.    

GDS Holdings Ltd., a China-based provider of high-performance data centers, has been deemed a good opportunity by analysts. Even with significant delays around Chinese cloud computing companies requiring data center space, it’s believed that there’s a potential for a recovery over the long term with this company.

GDS Holdings posted decent revenue growth in its recent Q3 report, with net revenue increasing by 15% year-over-year to $332.8 million. In addition, it trades at much cheaper valuations relative to its peers, has a strong leadership position in the Chinese market, and is expanding in Southeast Asia.5

Okta, Inc.

Okta Inc., an IT service management company, recently released better-than-expected third-quarter results and guidance for the upcoming period. For the period ending October 31, the company said it broke even and generated $481 million in revenue, which is up 37% year-over-year. Analysts were expecting Okta to lose 24 cents per share and approximately $465.37 million in revenue. As a result, Okta shares surged nearly 17% in after-hours trading.

Looking ahead, the company expects revenue to be between $488 million and $490 million, which is above expectations of just $488 million. In addition, Okta announced that its President of Worldwide Field Operations, Susan St. Ledger, would be retiring in January.6

Investing in the Cybersecurity Industry with CYBR ETF

If you’re looking to invest in a cybersecurity ETF, consider Canada’s first cybersecurity ETF, Evolve Cyber Security Index Fund (TSX Ticker: CYBR). CYBR ETF invests in global companies involved in the cyber security industry. For more information, visit the fund page here:

CYBR ETF Portfolio Strategy and Activity

For the month, GDS Holdings Ltd. made the largest contribution to the Fund, followed by Nextdc Ltd. and Netcompany Group. The largest detractors to performance for the month were Zscaler Inc., followed by Sentinelone Inc. and CrowdStrike Holdings Inc. On the last rebalance, IronNet Inc was added to the fund.


For the latest information on cybersecurity investing and industry updates on related investment products, sign up for our weekly newsletter here.



  1. “Durham District School Board shuts down virtual learning for 2nd day to recover from cyberattack,” CBC, November 29, 2022;
  2. Shacklett, M., “Top cybersecurity threats for 2023,” TechRepublic, November 28, 2022;
  3. Keary, T., “How a recession will change the cybersecurity landscape,” Venture Beat, December 9, 2022;
  4. “Crowdstrike Holdings warning sparks selloff in cybersecurity stocks,” Reuters, November 30, 2022;
  5. “Time to Pull the Trigger on Chinese Stocks? Here Are 2 Names That Analysts Like,” Yahoo! Finance, December 1, 2022;
  6. Ciaccia, C., “Okta surges as Q3 results, forecast blow away expectations,” Seeking Alpha, November 30, 2022;
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