Palo Alto Networks Inc. today announced that founder and Chief Technology Officer Nir Zuk has retired.

The executive’s departure follows two major milestones for the company. In conjunction with the leadership change, Palo Alto Networks reported fiscal fourth-quarter earnings and disclosed that its annualized revenue has topped $10 billion for the first time. A few weeks earlier, it agreed to acquire CyberArk Software Ltd. for $25 billion.

Zuk founded Palo Alto Networks in 2005 as an early firewall supplier. Over the subsequent years, the company went public and expanded its cybersecurity portfolio to numerous other product categories. It ended the fourth quarter with about 75,000 customers.

Lee Klarich, the company’s chief product officer, has assumed the CTO role along with a seat on the board. Klarich joined Palo Alto Networks a year after Zuk founded the cybersecurity provider in 2005 and has led its engineering efforts since 2017. His new title is chief product and technology officer.

“As a leader who has been a part of Palo Alto Networks from the very early days to driving our vision for what is to come, Lee’s deep technical domain expertise and leadership in shaping our product organization make him the ideal successor to guide our technology vision forward,” said Palo Alto Networks lead independent director John Donovan.

The company’s sales rose 16% year-over-year in the fourth quarter, to $2.54 billion, just above the $2.5 billion forecast by analysts. Palo Alto Networks attributed the momentum partly to strong growth in its Next-Generation Security, or NGS, revenue segment. The segment includes the company’s core cybersecurity software portfolio.

Annualized revenue from NGS products that focus on network security jumped 35% year-over-year, significantly outpacing the company as a whole, to $3.9 billion. Much of that growth was driven by Palo Alto Networks’ largest customers. The number of organizations that spend more than $5 million annually on NGS products rose 51% in the three months ended July 31 to 156.

Earnings also topped the consensus estimate. The company generated adjusted net income of $673 million in the fourth quarter, which translated to 95 cents per share. Wall Street expected adjusted earnings of 88 cents per share.

The company expects its momentum to continue in the current quarter. Palo Alto is projecting adjusted earnings of 88 to 90 cents per share, more than the 85 cents analysts had anticipated, on up to $2.47 billion in revenue.

Looking further ahead, Palo Alto Networks expects to complete the CyberArk acquisition in the second half of its current fiscal year. The deal will buy it a sizable portfolio of products for managing worker access to business applications and the public web. Additionally, the company is set to gain a customer base of about 10,000 organizations that includes over half the Fortune 500. 

Photo: Palo Alto Networks