Palo Alto (PANW) Exceeds Analysts’ Expectations for Q3

Palo Alto Networks Inc. (NYSE:PANW) was founded in 2005 by engineer Nir Zuk with the goal to solve problems related to network security. The company went public in 2012 by pricing its shares at $42 apiece. Today, it is a top player in the cybersecurity space, providing cybersecurity solutions to thousands of customers across the globe.

The company recently announced better-than-expected financial results for the third quarter. Palo Alto reported a loss of $145.1 million, or $1.50 per share for the three months ended April 30, versus a loss of $74.8 million, or 77 cents per share in the comparable quarter of 2020. On an adjusted basis, Palo Alto earned $1.38 per share, above the consensus forecast of $1.29 per share.

Revenue for the quarter climbed 24 percent on a year-over-year basis to $1.1 billion, just ahead of analysts’ average estimate of $1.06 billion. Total billings in the quarter increased to $1.29 billion, versus $1.02 billion in the year-ago quarter.

Speaking on the quarterly performance, CEO Nikesh Arora said, “The work-from-home shift earlier in the year and recent cybersecurity issues have increased the focus on security. Coupled with good execution, this has driven great strength across our business, with Q3 billings growth accelerating to 27% year over year. In particular, we saw a number of customers make large commitments to Palo Alto Networks across our three major platforms. We are pleased to be raising our guidance for fiscal year 2021 as we see these trends continuing into our fiscal fourth quarter, bolstering our confidence in our pipeline.”

Looking forward, Palo Alto expects adjusted earnings in the range of $1.42 per share to $1.44 per share and revenue between $1.17 billion to $1.18 billion for the fourth quarter. The Q4 outlook is above analysts’ average estimate of $1.41 per share for earnings and $1.16 billion for revenue.