Shares in cybersecurity firm Palo Alto Networks Inc. fell in late trading today after the network management and security firm lowered its full-year outlook despite otherwise reporting solid results in its fiscal 2025 second quarter.

Two other cyber-related firms got mixed investor reaction to early-morning earnings reports. Datadog Inc.’s fell more than 8% in regular trading, but CyberArk Software Ltd. saw shares rise nearly 9% after its report.

Palo Alto Networks

For the quarter ended Jan. 31, Palo Alto Networks reported adjusted earnings per share of 81 cents, up from 73 cents in the same quarter of the previous fiscal year, on revenue of $2.26 billion, up 14% year-over-year. Both figures were ahead of the 78 cents per share and revenue of $2.24 billion expected by analysts.

Operating income in the quarter came in at $640 million, up 14% year-over-year, driven by the growth of Palo Alto Networks’ Next Generation Security offering, which saw annual recurring revenue grow 37% year-over-year to $4.78 billion. As of the end of the quarter, the company also had remaining performance obligations — a metric that measures the remaining total future revenue it expects to recognize from existing customer contracts, including both billed and unbilled amounts — of $13 billion, up 21% year-over-year.

“In Q2, our strong business performance was fueled by customers adopting technology driven by the imperative of AI, including cloud investment and infrastructure modernization,” Chief Executive Nikesh Arora said in the company’s earnings release. “Our growth across regions and demand for our platforms demonstrate our customers’ confidence in our approach. It reaffirms our faith in our 2030 plans and our $15 billion NGS ARR goal.”

For its fiscal third quarter, Palo Alto Networks expects adjusted earnings per share of 76 to 77 cents on revenue of $2.26 billion to $2.29 billion. Analysts were expecting 76 cents per share and revenue of $2.27 billion.

For the full year, the company expects adjusted earnings per share of $3.18 to $3.24 on revenue of $9.4 billion to $9.19 billion. The outlook was ahead of the $3.17 per share and $9.15 billion expected by analysts. However, the adjusted earnings per share outlook was nearly half the $6.26 to $6.39 per share outlook for the full year given by Palo Alto Networks in November and investors did notice, with Palo Alto shares down more than 5% after hours.

Datadog

For its fiscal fourth quarter that ended on Dec. 31, Datadog reported adjusted earnings per share of 49 cents, up from 43 cents per share in the same quarter of 2023, on revenue of $738 million, up 25% year-over-year. Both were beats, as analysts had been expecting 43 cents per share of revenue of $714.23 million.

Datadog ended the quarter with 462 customers with annual recurring revenue of $1 million or more, up 17% year-over-year, and 3,610 customers with annual recurring revenue of $100,000 or more, up 13% year-over-year. Operating cash flow in the quarter was $871 million and free cash flow was $775 million.

“We are pleased with our strong execution in fiscal year 2024, with 26% year-over-year revenue growth, $871 million in operating cash flow, and $775 million in free cash flow,” co-founder and CEO Olivier Pomel said in the company’s earnings release. “During 2024, we delivered hundreds of new features and capabilities to help our customers as they migrate to the cloud and adopt new technologies like next-gen AI.”

For its fiscal 2025 first quarter, Datadog expects adjusted earnings per share of 41 to 43 cents on revenue of $737 million to $741 million. At the midpoint, both figures were below the 47 cents per share and revenue of $741.7 million expected by analysts. It also fell short of its full-year outlook, saying it expects $1.65 to $1.70 per share versus the $2.12 expected by analysts and revenue of $3.18 billion to $3.2 billion, below the $3.24 billion expected.

CyberArk

The last of the trio, CyberArk, reported adjusted earnings per share of 80 cents in its fiscal fourth quarter ending Dec. 31, down a penny from a year ago. Revenue jumped 41%, to $314.4 million. Both were ahead of the 72 cents per share and revenue of $301.2 million expected by analysts.

CyberArk’s strong figures were driven by increasing subscription revenue, which saw very healthy growth of 62% year-over-year, to $243 million. Maintenance and professional revenue came in at $66.4 million in the quarter, up from $64.8 million in the same quarter of the previous year, and perpetual license revenue was $5 million.

The company also saw annual recurring revenue grow 51%, to $1.169 billion, and subscription annual recurring revenue grow 84%, to $977 million.

“2024 was a milestone year for CyberArk,” CEO Matt Cohen said in the company’s earnings release. “Our record performance in the fourth quarter and the year reflects the strength of demand for our identity security solutions and the consistent execution of our strategy.”

For its fiscal 2025 first quarter, CyberArk expects adjusted earnings per share of 74 to 81 cents on revenue of $301 million to $307 million. Analysts had expected 77 cents and $300.8 million. For the full year, the company expects adjusted earnings per share of $3.55 to $3.70 on revenue of $1.308 billion to $1.318 billion, both roughly in line with the $3.62 and $1.3 billion expected by analysts.

Today CyberArk also announced a deal to acquire Zilla Security Inc. for $175 million.

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