Palo Alto (PANW) 2020 Q4 Earnings Results

Palo Alto Networks Inc. (NYSE:PANW) was founded in 2005 by engineer Nir Zuk with the objective to solve problems related to network security. The company went public in 2012 by pricing its shares at $42. Its share price has climbed nearly 600 percent since then. Today, it is a leading provider of cybersecurity solutions to enterprises around the world.

The company has performed well in recent months, as the Covid-19 pandemic fueled the demand for its cybersecurity solutions. The work-from-home trend boosted the demand for software and solutions for online data protection. Being the top player in the security software space, Palo Alto capitalized on the trend. Its stock’s value rose more than 50 percent in 2020.

Nevertheless, Palo Alto shares fell nearly 7 percent on Tuesday morning after the company issued a weak outlook for the third quarter. However, its adjusted earnings and revenue for Q2 were above expectations.

Palo Alto posted a loss of $142.3 million, or $1.48 per share for the three months ended January 31, wider than a loss of 75 cents per share in the comparable period of 2020. Yet, the adjusted profit of $1.55 per share beat the consensus forecast of $1.43 per share. Revenue surged 25 percent on a year-over-year basis to $1.02 billion, beating analysts’ average forecast of $985.6 million.

Commenting on the quarterly performance, CEO Nikesh Arora said, “The momentum in the business continues to be strong, with second-quarter revenue growth of 25% year over year to over 1 billion USD, driven by strong execution across the board.”

Looking forward, Palo Alto expects to report an adjusted profit in the range of $1.27 per share to $1.29 per share and revenue between $1.05 billion and $1.06 billion for the third quarter. On the other hand, analysts were looking for an adjusted profit of $1.29 per share and revenue of $1.05 billion.