ExtraHop has released a new report analyzing the financial impact of several high-profile data breaches.
According to the findings, public companies profiled saw net income drop an average of 73% roughly one year following the announcements of a data breach.
The analysis examines the costs associated with data breaches at six organizations, calculating the sum of regulatory fines, legal settlements and cyber insurance, in addition to the longer-term effects on corporate earnings and stock price.
Nearly all organizations analyzed experienced a decline in quarterly earnings and stock prices after a data breach occurred. In one example, ExtraHop noted a company’s stock price fell nearly 21% he day after the breach was reported – and net income dropped 27% year-over-year in the quarter the breach was reported. These losses are in addition to over 1 billion dollars in reported costs, including regulatory fines, legal fees and multiple settlements with consumers, businesses and individual states.
“When a data breach hits, real people lose real money – it goes way past the upfront costs that accompany stolen records and the number of people affected,” said Patrick Dennis, CEO, ExtraHop.
