Investment Rating - The report maintains a "Buy" rating for Palo Alto Networks (PANW) with a target price raised by 17% to $464.40, based on a consistent price-to-sales ratio of 16.0x [3][14]. Core Insights - Palo Alto Networks reported a 13.9% year-over-year revenue growth for Q1 FY2025, reaching $2.1 billion, slightly exceeding Bloomberg consensus estimates by 1% [3]. - Non-GAAP net income for the same period was $544.9 million, reflecting a 17% increase year-over-year and surpassing consensus expectations by 6% [3]. - The company's platform strategy is showing initial success, which is expected to drive long-term market share growth [3]. Summary by Sections Revenue Overview - Subscription and support revenue grew by 16% to $1.8 billion, accounting for 83% of total revenue, driven by increased adoption of Next-Generation Security (NGS) products [4]. - NGS Annual Recurring Revenue (ARR) reached $4.52 billion, a 40% year-over-year increase [4]. Financial Performance - Non-GAAP operating profit was $616.2 million, with a margin of 28.8%, exceeding market expectations by 1.2 percentage points [4]. - The report anticipates Q2 FY2025 total revenue to reach $2.23 billion, reflecting a 13% year-over-year growth [4]. Product Growth - Active SASE customer count increased by 20% year-over-year, with over 40% of new SASE customers being first-time adopters of PANW products [5]. - Cortex ARR reached $1 billion, with significant growth driven by XSIAM, where 40 customers have ARR exceeding $1 million, marking a 180% year-over-year increase [5]. Guidance Update - Management raised FY2025 guidance due to optimistic Q1 performance: NGS ARR is now projected between $5.52 billion and $5.57 billion, total revenue between $9.12 billion and $9.17 billion, and diluted non-GAAP EPS between $6.26 and $6.39 [6]. Valuation Metrics - The target enterprise value/sales for FY2025 is set at $158.2 billion, with a target price of $464.40 based on projected revenue [14]. - The report indicates a consistent growth trajectory in revenue and profitability metrics, with adjusted net income expected to reach $2.26 billion in FY2025 [16].

Investment Rating - The report maintains a "BUY" rating for Palo Alto Networks (PANW) with a target price raised by 17% to US$464.4, reflecting a potential upside of 16.8% from the current price of US$397.70 [1][3]. Core Insights - Palo Alto Networks reported strong 1QFY25 results, with total revenue increasing by 13.9% year-over-year to US$2.1 billion, surpassing Bloomberg consensus by 1% [1]. - Non-GAAP net income for the same period reached US$544.9 million, up 17% year-over-year, and 6% better than consensus, driven by optimized sales and marketing expenses [1]. - The company's Platformization strategy is showing early positive results, which is expected to enhance long-term market share and operational efficiency [1]. Summary by Sections Financial Performance - 1QFY25 subscription and support revenue grew 16% year-over-year to US$1.8 billion, accounting for 83% of total revenue [1]. - Non-GAAP operating profit reached US$616.2 million, translating to a 28.8% non-GAAP operating profit margin, which is 1.2 percentage points better than consensus [1]. - The company has lifted its FY25 guidance for NGS ARR to US$5.52 billion - US$5.57 billion and total revenue to US$9.12 billion - US$9.17 billion [1]. Key Operating Metrics - The number of active SASE customers grew by 20% year-over-year, with over 40% of new SASE customers being new to PANW [1]. - NGS ARR reached US$4.52 billion by the end of 1QFY25, up 40% year-over-year, with expectations for continued growth driven by SASE and XSIAM products [1]. - The company achieved 1,100 total Platformizations among its top 5,000 customers, with a 6% increase in NGS ARR per platformized customer compared to FY24 [1]. Revenue Projections - FY25 revenue is projected at US$9.15 billion, reflecting a year-over-year growth of 14% [2]. - Non-GAAP net profit for FY25 is estimated at US$2.26 billion, with an adjusted EPS of US$6.45 [2]. - The revenue growth is expected to continue into FY26 and FY27, with projections of US$10.64 billion and US$12.27 billion respectively [2].

Palo Alto Networks Inc (NASDAQ:PANW) yesterday reported better-than-expected fiscal first-quarter earnings and revenue, as demand for its cybersecurity services grows stronger due to rising digital threats. The company also announced a two-for-one stock split. Sector peers Crowdstrike Holdings Inc (NASDAQ:CRWD) and SentinelOne Inc (NYSE:S) are enjoying halo lifts in response, making now a good time to check in on the sector.PANW is up 1.5% to trade at $398.57 at last check, which is within striking distance ...

Key TakeawaysPalo Alto Networks reported better revenue and profit than expected for the first quarter of fiscal 2025.The cybersecurity company lifted its projections for full-year revenue and adjusted earnings per share (EPS).Palo Alto Networks also said it will undergo a 2-for-1 stock split next month. Palo Alto Networks (PANW) posted better-than-expected fiscal 2025 first-quarter results and announced a 2-for-1 stock split after the bell Wednesday. The cybersecurity company reported $2.14 billion in reve ...

Palo Alto Networks (PANW) delivered first-quarter fiscal 2025 non-GAAP earnings of $1.56 per share, which surpassed the Zacks Consensus Estimate by 5.4%. The figure improved 13% year over year, exceeding management’s guidance of $1.47-$1.49. Palo Alto’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 7.6%.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.PANW’s first-quarter fiscal 2025 revenues of $2.14 billion beat the Zack ...

Palo Alto Networks TodayPANWPalo Alto Networks$390.71 -2.18 (-0.55%) 52-Week Range$260.09▼$408.53P/E Ratio53.89Price Target$403.59Add to WatchlistPalo Alto Network’s NASDAQ: PANW stock price has been in a multi-year uptrend that will continue for many more years because of its leadership position in cybersecurity. It is the world’s leading cybersecurity provider, and its business is supported by the increasing use of digitization by businesses and industries, compounded by the exponential rise in cyber thr ...

Malicious hackers have compromised potentially thousands of organizations by exploiting two new zero-day vulnerabilities found in widely used software made by cybersecurity giant Palo Alto Networks.Security researchers at Palo Alto Networks said Wednesday that they have observed a “limited set of exploitation activity” related to the two vulnerabilities in PAN-OS, the operating system that runs on all of Palo Alto’s next-generation firewalls. The bugs are considered zero-days because the company had no time ...

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Financial Data and Key Metrics - Total revenue for Q1 2025 was $2.14 billion, growing 14% YoY, exceeding guidance [47] - Product revenue grew 4%, while services revenue grew 16%, with subscription revenue up 21% and support revenue up 8% [47] - NGS ARR grew 40% YoY to $4.52 billion, driven by platformization and the QRadar SaaS acquisition [9][48] - Operating margin expanded by 60 basis points YoY, leading to 13% EPS growth and strong cash generation [9] - RPO grew 20% YoY to $12.6 billion, with current RPO up 18% to $5.9 billion [48] Business Line Performance - Next-Gen Security (NGS) ARR reached $4.5 billion, up 40% YoY, with Cortex and NetSec showing strong growth [9] - Cloud security crossed $700 million in ARR, while Cortex surpassed $1 billion in ARR [18] - Network security saw steady demand, with 70% of virtual firewall ARR coming from public cloud deployments [23] - SASE customers grew 20%, with 40% being net-new to Palo Alto Networks [24] - Cortex XSIAM now has over 150 active customers, with 40 having more than $1 million in ARR [33] Market Performance - Double-digit revenue growth across all regions: Americas up 12%, EMEA up 21%, and JAPAC up 13% [48] - The company signed 305 transactions over $1 million, up 13%, and 60 transactions over $5 million, up 30% [22] - The IBM QRadar acquisition added 550 SaaS customers and over $80 million in TCV, with a pipeline worth over $1 billion [34][35] Strategy and Industry Competition - The company is focused on platformization, aiming to consolidate point products into integrated platforms [10][14] - Gartner predicts 45% of organizations will use fewer than 15 cybersecurity tools by 2028, up from 13% in 2023 [11] - The company is leveraging AI and automation to enhance its platform strategy, with early success in XSIAM and Cloud platforms [12][13] - The company aims to achieve 2,500 to 3,500 platformization deals by fiscal year 2030 [16] Management Commentary on Market and Future Outlook - The cybersecurity market is growing faster than the overall technology market, driven by AI and automation [7] - The company is confident in its platformization strategy, which is driving sustainable profitable growth [40][41] - The company raised its FY 2025 guidance for NGS ARR, revenue, and EPS, reflecting strong performance and confidence in its strategy [44] Other Important Information - The company announced a two-for-one stock split to make shares more accessible to employees and investors [44][58] - The company is focusing on RPO and NGS ARR as key metrics, driving long-term value creation [52][53] Q&A Summary Question: Margin implications of platformization - Platformization reduces cost of sales, improves cloud COGS margins, and enhances customer support efficiency through automation [63] Question: Impact of competitors' hardware refresh cycles - The company sees opportunities to displace competitors during their refresh cycles, with steady growth in hardware demand [66][68] Question: Macro outlook and federal government spending - AI is driving increased cybersecurity spend, while platformization helps customers consolidate and reduce costs [72] Question: Integration between Cortex and Cloud - The company is integrating Cortex and Cloud to provide real-time cloud security, with early success in combining Prisma Cloud and Cortex capabilities [75][76] Question: NGS ARR growth and QRadar impact - NGS ARR growth includes a one-time benefit from QRadar, with half expected to migrate to XSIAM by year-end [94][95] Question: Prisma SASE growth and customer acquisition - SASE growth is driven by both new customers and displacement of competitors, with 40% of SASE customers being net-new [99] Question: Strategy for QRadar on-premise customers - The company is actively working to migrate on-premise QRadar customers to XSIAM, with a $1 billion pipeline and strong IBM partnership [103][104] Question: Contract duration and platformization - Contract durations remain steady at three years, with some customers opting for shorter terms due to expected future innovations [107]