Cato Networks
Cato Networks sells a cloud-based network security service that replaces old-school MPLS and firewall boxes.
The call
Cato keeps growing fast and locking customers into its network, but it still hasn't gone public, isn't profitable, and is chasing Zscaler and Palo Alto Networks in the same market.
Cato Networks sells a cloud-based security system that replaces old corporate network tools (MPLS), and has built 85 private data centers worldwide plus years of customer data that make switching costly. Big rivals like Palo Alto, Zscaler, and Cisco are shipping nearly identical products and taking away deals, so Cato's advantages are real but not unbeatable. The company's true test is whether it can go public and return money to early investors at a good price, not whether it survives, that part looks solid, but falling cyber stock valuations and delayed IPO filings since 2024 suggest the financial payoff remains uncertain.
Why
01
AI pressure: None apparent as a direct predator; Cato is building its own AI (Neural Edge, OpenAI partnership) rather than being eaten by it. AI mostly automates security tuning work here, and Cato is racing to own that layer itself instead of being replaced by it. Could AI do the core job? Unlikely.
02
Bigger players: Zscaler and Palo Alto Networks (Prisma SASE). Both are bigger, cloud-native rivals selling the same replace-your-firewall pitch to the same buyers, and they can outspend Cato on sales and R&D. Could a giant copy it? Probably.
03
What protects it. Once a company rips out its MPLS network and firewalls for Cato's platform, switching means redoing the entire network, which few IT teams want to repeat.
What would change this call
Cato files an S-1 or IPO prospectus within the next 12 months. Would show the liquidity path is real, not stalled by weak cyber valuations.
Cato's ARR growth rate reported for 2026 falls well below 43% YoY. Would show competitors are winning more renewals or new deals.
Gartner or GigaOm places Cato below Zscaler/Palo Alto in next SASE ranking. Would show Cato losing ground in analyst-driven enterprise buying decisions.
Cato's ARR growth rate reported for 2026 falls well below 43% YoY. Would show competitors are winning more renewals or new deals.
Gartner or GigaOm places Cato below Zscaler/Palo Alto in next SASE ranking. Would show Cato losing ground in analyst-driven enterprise buying decisions.
Key numbers
- $350M ARR, up 43% year over year
- 4,000+ customers, up from 3,500 in mid-2025
- $4.8B+ valuation on $359M Series G raise
Named risks
- Repeatedly delayed IPO (2024 to 2025 to unfiled Feb 2026) amid falling cyber valuations.
- Company remains unprofitable as of mid-2025 with no disclosed profitability timeline.
- Well-funded cloud-native rivals (Zscaler, Palo Alto Prisma, Netskope, Cloudflare) contest same enterprise deals.
- Integration execution risk from first-ever acquisition, Aim Security, into AI Security product line.
- $120M of June 2025 round was insider/employee secondary sale, signaling liquidity pressure absent IPO.
Rivals, as read in July 2026
| Rival | Direction | Evidence |
|---|---|---|
| Zscaler | contesting | Rival cloud-native Zero Trust Exchange platform competing for same SASE deals as of 2026 |
| Palo Alto Networks | contesting | Prisma SASE from $73B+ market cap incumbent directly competes; no clear share bar as of 2026 |
| Cisco | contesting | Secure Access/Umbrella plus Meraki compete in same market segment through 2026 |
| Netskope | contesting | Listed among closest SASE/SSE competitors in 2026 industry comparisons |
| Cloudflare | contesting | Cloudflare One named as direct competitor in 2026 SASE platform rankings |
Questions people ask
- Is Cato Networks profitable in 2026?
- No. Reporting as of mid-2025 confirmed Cato Networks was not profitable, and by February 2026 it still had not filed for an IPO, with analysts citing falling cyber valuations as a headwind to any near-term path to profitability disclosure.
- Will Cato Networks IPO in 2026?
- Uncertain. An IPO was targeted for 2024, then 2025, but as of February 24, 2026 Cato Networks had still not filed, with analysts noting AI-driven disruption and falling cyber valuations are clouding its Wall Street ambitions, per Calcalist.
- Who owns Cato Networks?
- Cato Networks is privately held and venture-backed, led by co-founder and CEO Shlomo Kramer (also co-founder of Check Point and Imperva). Its June 30, 2025 Series G valued the company at more than $4.8 billion, led by Vitruvian Partners and ION Crossover Partners.
- Could AI replace Cato Networks?
- Unlikely to replace it outright. AI can compress labor-heavy tasks like firewall tuning and Tier-1 triage, which Cato itself automates via Autonomous Policies, but its physical global backbone of 85+ PoPs and deep SD-WAN customer lock-in are not AI-replicable, per company product materials.
- Who is Cato Networks' biggest competitor?
- Cato Networks' closest rivals in SASE are Zscaler, Palo Alto Networks (Prisma SASE), Netskope, Cisco Secure Access, and Cloudflare One, all cloud-native platforms competing for the same enterprise deals as of 2026, per industry comparisons.
- How much revenue does Cato Networks make?
- Cato Networks reports Annual Recurring Revenue rather than GAAP revenue: the company announced on February 24, 2026 that ARR surpassed $350 million in 2025, up 43% year over year, serving more than 4,000 customer organizations (vendor-claimed).
Timeline
- 2026-06-22Joined OpenAI Daybreak Cyber Partner Program, gaining GPT-5.5/Codex security tooling access
- 2026-03-17Launched Cato Neural Edge and Cato AI Security, billed as first GPU-powered SASE platform
- 2026-02-24Announced ARR surpassed $350M in 2025, up 43% YoY; still no IPO filing
- 2026-01-29New CMO Jaime Romero (ex-Fortinet) appointed
- 2025-09-30Crossed $300M ARR
- 2025-09-20Acquired Israeli AI-security startup Aim Security, first-ever acquisition
- 2025-06-30Closed $359M Series G at $4.8B+ valuation, about $120M was secondary sale
- 2025-05-13Launched Cato Autonomous Policies, an AI-driven firewall policy engine
- 2024-12-07Opened expanded global headquarters in Tel Aviv
- 2015Founded by Shlomo Kramer and Gur Shatz; product launched February 2016
Revision history
21 July 2026
First assessed. Protection under test. The text above is fixed as of this date and is not edited afterwards.
In the same band
Sources
- Cato Surpasses $350 Million ARR with 43% YoY Growth in 2025 (2026-02-24)
- Cato Networks Raises $359 Million at a Valuation of More Than $4.8 Billion (2025-06-30)
- Cato Networks Series G funding and IPO delay (2025-06-30)
- Cato Networks IPO status and market headwinds (2026-02-24)
- Cato Networks (2026-07-19)
- Cato Introduces First GPU-Powered SASE Platform with Native AI Security (2026-03-17)
- Cato Advances Enterprise Defense, Joining the OpenAI Daybreak Cyber Partner Program (2026-06-22)
- SASE market growth and Cato valuation (2025-06-30)
- Top 5 SASE Platforms 2026 (2026-05-20)
- Cato Networks Headcount (2026-06-29)
- Cato Continues Expansion with New Global Headquarters (2024-12-07)
- Cato Networks Introduces AI-Powered Policy Analysis Engine (2025-05-13)