Palo Alto Networks beat Wall Street expectations for first-quarter revenue and profit on Wednesday, owing to healthy spending for its cybersecurity services amid a rise in digital threats.
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However, shares of the Santa Clara, California-based company fell over 5% in extended trading. Palo Alto forecast second quarter as well as annual revenue largely in line with analysts’ expectations.
The company also announced a two-for-one stock split of its outstanding shares of common stock. Trading on a split-adjusted basis is expected to begin on Dec. 16.
Palo Alto raised its fiscal 2025 revenue outlook to between $9.12 billion and $9.17 billion, while analysts expected $9.13 billion, as per data compiled by LSEG.
A rise in cyber crimes and hacks has spurred companies to invest heavily into cybersecurity, benefiting large firms that provide a wide range of security services, such as Palo Alto.
The company has been attempting to get its clients to adopt a new “platformization” approach to security by consolidating individual tools into one platform and simplifying management.
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“Our platformization progress continued in Q1, driving strong financial results,” said Dipak Golechha, Palo Alto’s finance chief.
Palo Alto reported revenue of $2.14 billion for the first quarter, beating estimates of $2.12 billion.
On an adjusted basis, the company earned $1.56 per share, compared with estimates of $1.48 apiece.
It forecast second-quarter revenue between $2.22 billion and $2.25 billion, compared with estimates of $2.23 billion.
The company also raised its forecast for adjusted net income per share to a range of $6.26 to $6.39 per share, from $6.18 to $6.31 per share it expected earlier.
(Reporting by Zaheer Kachwala in Bengaluru; editing by Alan Barona)
-Reuters
-TheStar