Barclays has released its preview of 14 on-cycle software reporters in areas including security, design and vertical software, isolating a subset of names it views as set up positively into their upcoming results while flagging a couple of others as potentially challenged in the near term.
The bank identified three stocks with favorable setups and two it believes merit close attention as quarterly results approach. Those views balance recent operational indicators, multi-quarter comparisons and a range of company-specific developments such as research collaborations, regulatory authorizations and analyst rating changes.
Cloudflare - most favorable setup
Barclays ranked Cloudflare as having the most constructive setup heading into its earnings. The bank points to elevated request volumes driven by non-human traffic and expects that as customers work through existing volume caps, a lagging revenue benefit could materialize. Barclays also noted accelerated share gains in reverse proxy, estimating Cloudflare now fronts roughly 24% of the internet.
On near-term metrics, Barclays expects about 31% growth in current remaining performance obligations and roughly 30% revenue growth in the second quarter, with potential upside should the lag between request volumes and monetization narrow. The note also referenced recent analyst actions and partnerships affecting sentiment: Scotiabank upgraded Cloudflare to Sector Outperform and TD Cowen raised its price target, both citing AI-related growth opportunities. Cloudflare has additionally announced a research pilot with OpenAI to explore how network signals might help AI search engines index web content.
Varonis Systems - room for another beat
Barclays expressed a positive stance on Varonis ahead of its print, seeing scope for another beat and flow-through on Software-as-a-Service annual recurring revenue (ARR) excluding conversions in the quarter. The bank expects that the fiscal 2026 guide for SaaS ARR excluding conversions will be supported by the second quarter beat and that easier comparisons later in the year will allow that performance to flow through.
Looking further out, Barclays described the fundamental setup into fiscal 2027 as attractive, with the potential for ARR growth to accelerate. Supporting corporate developments noted in the bank's preview include an upgrade to Overweight from Stephens, which referenced media reports of potential private equity interest, and Varonis receiving GovRAMP Authorization for its Data Security Platform, a certification enabling the company to serve state and local government agencies.
CCC Intelligent Solutions - normalization supports outlook
Barclays pointed to positive trends at CCC Intelligent Solutions as industry claim volume headwinds continue to normalize. The bank highlighted two large Casualty wins that are expected to contribute to revenue in the second half of the year, bolstering the firm's constructive view on the name into upcoming results.
Check Point Software - watch for delayed catalysts
Barclays recommended monitoring Check Point closely, cautioning that a clear catalyst may be a few quarters away. The bank anticipates mixed checks and go-to-market disruptions that could weigh on second quarter billings and identified a challenging comparison for third quarter billings. Consequently, Barclays suggested that material improvement may not appear until the fourth quarter.
Notable corporate developments cited alongside the bank's caution include an upgrade to Buy from Guggenheim and Check Point's announcement that it will integrate OpenAI models into its security products. The company also launched its Cloud Firewall offering on the AWS European Sovereign Cloud.
Tenable Holdings - beatable estimates, but stock reaction uncertain
Barclays judged its 7% year-over-year growth estimates for Tenable's calculated current billings and revenue as beatable, but questioned whether a revenue beat alone would be sufficient to drive the stock higher. The bank underscored that Tenable's shares have risen sharply during the quarter - up 85% relative to the IGV's 9% gain - introducing uncertainty about how much upside remains.
The preview also recorded recent supportive developments for Tenable, including price target increases from JPMorgan and Needham, FedRAMP High authorization for its Tenable One Cloud Exposure product, and a strategic partnership with OpenAI to integrate AI capabilities into its exposure management platform.
What Barclays reviewed
Across the 14 on-cycle names, Barclays combined near-term operational readthroughs - such as volume and billings trends - with company-level announcements and analyst actions to rate the relative setups into earnings. Several of the highlighted companies have moved to exploit AI opportunities or secured government-focused authorizations that could shape their addressable markets.
Bottom line - Barclays sees a varied landscape across the software cohort, with particular optimism for Cloudflare, Varonis and CCC Intelligent Solutions, while urging caution on Check Point and Tenable as headline results and forward guidance approach.
Key points
- Barclays previewed 14 on-cycle software reporters, identifying three names with favorable setups and two that warrant caution.
- Cloudflare stands out for accelerating reverse proxy share, elevated non-human request volumes and expectations for double-digit second-quarter revenue and performance obligation growth.
- Several companies cited have recent analyst upgrades, government authorizations or AI partnerships that could influence near-term traction and market interest.
Risks and uncertainties
- A lag between rising request volumes and monetization could delay revenue benefits for Cloudflare if customers remain constrained by volume caps.
- Mixed checks and go-to-market disruptions could weigh on Check Point's second quarter billings, with a difficult third-quarter comparison that may defer visible improvement until the fourth quarter.
- Even if Tenable posts a revenue beat relative to Barclays' 7% growth estimate, prior strong share gains raise uncertainty over the stock's ability to continue outperforming.