Nikesh Arora, Palo Alto Networks
Adam Kalika | CNBC
Shares of cybersecurity firm Palo Alto Networks fell 19% in extended trading on Tuesday. reported A beat on top and bottom lines but revenue and billings cut its full-year guidance.
Here's how the company fared compared to LSEG, Refinitiv, and ratings:
- Stock Gains: $1.46, adjusted, vs. $1.30 expected
- Revenue: $1.98 billion and $1.97 billion expected
Net income for the quarter was $1.7 billion, or $4.89 per share, compared to $84 million, or $0.25 per share, in the second quarter of fiscal 2023.
The company is now guiding for full-year total billings of $10.1 to $10.2 billion, compared to its previous guidance of $10.7 and $10.8 billion. Palo Alto Networks expects full-year revenue to be between $7.95 and $8 billion, up from its previous guidance of $8.15 to $8.2 billion.
In a conference call with analysts, CEO Nikesh Arora said the lowered guidance was due to a “shift” in strategy “looking to accelerate growth, our platform migration and integration and enable AI leadership,” and that the company “expects a tougher customer base.” The company changed its stance.
Guidance for the coming quarter was also below consensus estimates. Analysts surveyed by LSEG had expected the company to guide fiscal third-quarter revenue of $2.04 billion, but Palo Alto Networks now expects revenue of between $1.95 billion and $1.98 billion.
The new billings guidance indicates full-year growth of 10% to 11% compared to previous guidance that showed billings growth of 16% to 17%. Similarly, Palo Alto Networks now expects full-year revenue growth of 15% to 16%, up from initial guidance of 18% to 19% growth.
The lowered valuations come even as AI frenzy sweeps cybersecurity stocks and the broader tech sector. Arora said the company will implement its “AI leadership strategy” at the earnings release.
This is breaking news. Check back for updates.
