Shares in Palo Alto Networks Inc. rose in late trading today after the network management and security firm impressed investors with an earnings beat and lifted its earnings forecast for the year ahead.

For its fiscal third quarter ended April 30, Palo Alto Networks reported earnings before costs such as stock compensation of $359.4 million, or $1.10 per share, up from $193.1 million, or 60 cents per share, in the same quarter of last year. Revenue rose 24%, to $1.72 billion. Analysts had expected earnings per share of 93 cents on revenue of $1.72 billion.

The figures were positive across the board. Palo Alto also reported total billings in the quarter of $2.26 billion, up 26% year-over-year, while annual recurring revenue rose 60%, to $2.57 billion. Operating income rose 61%, to $407 billion, and the company reported a net profit of $108 million, up $181 million from the same quarter of last year.

Palo Alto’s strong figures were driven by customer growth, with the company saying it had 325 accounts spending more than $1 million annually in its fiscal third quarter, up 29% year-over-year. Accounts spending more than $5 million grew 62%, to 72, and accounts with a $10 million or more spend grew 136%, to 25. Palo Alto also reported a compound annual growth rate of 30% among its top 200 customers thanks to increased demand.

Highlights in the quarter included Palo Alto announcing new capabilities to boost its single-vendor secure access service edge or SASE solution with features to secure the internet of things and automate branch management with artificial intelligence-powered capabilities in March. The improvements to Palo Alto’s Prisma SASE enable organizations to automate increasingly complex information technology and network operations center functions through the natively integrated AIOps.

Palo Alto also highlighted some of its scanning stats in an investor presentation. In the quarter, the company analyzed, on average, 750 million new and unique objects and detected 1.5 million new and unique attacks “that were not there the day before.” On average each day, Palo Alto Networks blocked 8.6 billion attacks.

“We continued to demonstrate our commitment to profitable growth in Q3,” Dipak Golechha, chief financial officer of Palo Alto Networks, said in an earnings release. “As a result, we are raising our cash flow margin and operating margin guidance for FY’23 as we balance driving efficiency goals while investing for medium-term growth.”

For its fiscal fourth quarter, Palo Alto Networks said it expects adjusted earnings per share of $1.26 to $1.30 on revenue of $1.937 billion to $1.967 billion. Analysts were expecting $1.20 and $1.95 billion. For its fiscal year, the company expects adjusted earnings per share of $4.25 to $4.29 on revenue of $6.88 billion to $6.91 billion. Analysts had expected $4.02 and $6.89 billion.

Palo Alto Network shares rose nearly 4% after-hours.

Image: Palo Alto Networks