A new report out today from Momentum Cyber LLC shows that 2025 marked the most active and capital-intensive year ever recorded for the cybersecurity industry and has set the stage for what the company believes will be an even more aggressive market in 2026.

The Momentum Cyber 2026 Almanac details that cybersecurity mergers and acquisitions hit a record $102 billion in disclosed deal value across 398 transactions during 2025, representing a 294% year-over-year increase in deal value and a 21% rise in deal volume.

The second quarter of 2025 saw the highest number of transactions ever recorded, with 109 deals. The third quarter set a new quarterly record for deal value at $44.2 billion, driven by multiple mega-deals involving cloud security and identity platforms.

By business model, the report highlights a dramatic skew toward software, with cybersecurity software-as-a-service companies accounting for around 60% of total merger and acquisition volume and 96% of total capital deployed. Momentum Cyber says the data reflects a sustained premium being paid for cloud-native platforms that can be integrated into broader security stacks, particularly in identity and access management, cloud security and threat detection.

On the buyer side, strategic acquirers accounted for 91% of disclosed merger and acquisition value and 61% of deal count in 2025, a sizable change from 2024 when private equity played a more prominent role.

While private equity firms still completed 133 deals during the year, the report notes that public and well-capitalized strategic buyers were willing to pay significantly higher multiples to secure category-defining assets, especially in cloud security and identity.

The report also discusses sector-level shifts in both mergers and acquisitions and financing.

On the acquisition side, security services, risk and compliance, digital channel security and identity and access management saw the highest deal volume. However, when measured by dollars deployed, cloud security and identity dominated, reflecting blockbuster transactions involving companies such as Wiz Inc. and CyberArk Software Ltd.

In financing, artificial intelligence security overtook risk and compliance as the most heavily funded category, with Momentum Cyber describing AI security as the fastest-forming subsector in cybersecurity history.

Overall, Momentum Cyber recorded 734 financing rounds in 2025, totaling $18 billion, up 37% year-over-year. There were 57 funding rounds in 2025 of $50 million or more, with capital concentrated heavily in AI security, data security and application security.

For 2026, Momentum Cyber says the pipeline is already stacked with sustained demand for AI-native security platforms, governance tooling and cloud-first architectures.

The firm argues that a combination of accelerating enterprise AI adoption, renewed strategic buying and a strong public-market backdrop has reset expectations for cybersecurity valuations going into the year.

“We are entering an era in which security can no longer be reactive, episodic, or human-paced, Richard Steinnon, chief research analyst at Momentum Cyber, noted in the report. “The guardians of this age will be those who understand that securing AI is not a niche problem, it is the central challenge of the digital economy.”

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