SECURITY
SECURITY
SECURITY
Palo Alto Networks shares surge on solid earnings beat and improved outlook
Palo Alto Networks Inc. shares surged in late trading after the network management and security firm delivered a solid earnings beat and a better-than-expected outlook.
For its fiscal fourth quarter ended July 31, Palo Alto Networks reported a profit before costs such as stock compensation of $254.1 million or $2.39 per share, up from $161.9 million or $1.61 in the same quarter of last year. Revenue rhose 27% from a year ago, to $1.6 billion.
Analysts had expected a profit of $2.28 a share on revenue of $1.54 billion. On a net basis, Palo Alto Networks reported a profit of $3.3 million, or two cents per share, the first time the company has reported net profitability in four years.
Highlights in the quarter included an upgrade of the company’s Prisma Cloud cybersecurity platform with new features for detecting vulnerabilities and malicious activity in cloud environments. Among the new features is an out-of-band scanning service that promises to ease customer cybersecurity operations.
“Next-Generation Security growth, driven by our rapid pace of innovation and strong sales execution, drove our results,” Nikesh Arora (pictured), chairman and chief executive officer of Palo Alto Networks, said in a statement. “As cybersecurity posture remains critical, our integrated three-platform strategy continues to drive large deal momentum as we consolidate and simplify our customers’ security architectures.”
For its fiscal first quarter of 2023, Palo Alto Networks said it expects an adjusted profit per share of $2.03 to $2.06 on revenue of $1.535 billion to $1.555 billion. For the full fiscal year 2023, earnings per share are expected to be $9.40 to $9.50 on revenue of $6.85 billion to $6.9 billion. Analysts had expected a first-quarter adjusted profit of $2.03 per share on revenue of $1.53 billion and a full-year adjusted profit of $9.27 on revenue of $6.74 billion.
Along with its earnings, Palo Alto Networks also announced a three-for-one stock split and expanded its stock repurchase program by $915 million, increasing the total current authorization to $1 billion. Barrons reported that the stock split is scheduled for Sept. 14.
The earnings beat combined with a better-than-expected outlook sent Palo Alto Networks shares up more than 8% after the bell.
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