New offer alleviates the cost of switching from legacy endpoint security solutions to Cortex XDR SANTA CLARA, Calif., Feb. 21, 2024 /PRNewswire/ -- Palo Alto Networks (NASDAQ: PANW) today announced a new Cortex platform offer for endpoint security to help customers accelerate platformization and improve their endpoint protection. Organizations struggle to prevent, detect, and respond to the continuous advancement of cyberthreats. To simplify their architectures, increase efficiencies and create better secur ...

Palo Alto Networks (NASDAQ:PANW) stock is falling on Wednesday following the release of the cybersecurity company’s fiscal Q2 2024 earnings report.What’s dragging the stock lower today is the outlook in its latest earnings report. The company’s estimates for fiscal Q3 and the full year of 2024 don’t have investors excited.Starting with its fiscal Q3 guidance, Palo Alto Networks expects adjusted earnings per share to range from $1.24 to $1.26. That would come in below Wall Street’s estimate of $1.29 per shar ...

Palo Alto Networks, Inc. (PANW) reported better-than-expected results for the second quarter of fiscal 2024. The company reported non-GAAP earnings of $1.46 per share for the second quarter, beating the Zacks Consensus Estimate of $1.30. The bottom line improved 39% from the year-ago quarter’s non-GAAP earnings of $1.05 per share and came toward the higher end of the company’s earlier guidance range of $1.29-$1.31.Palo Alto’s second-quarter revenues of $1.98 billion beat the Zacks Consensus Estimate of $1.9 ...

About this content About William Farrington William kickstarted his career as a researcher and reporter for a global legal publication, covering everything from public law to M&A. Before moving to Proactive Investors, he worked as a reporter for a major fintech company with a focus on cryptocurrency and blockchain technology. Harking from Queensland, Australia, William obtained first-class honours in journalism and media from Birkbeck University before going on to complete an MA in creative and critical ...

Financial Data and Key Metrics - Revenue grew 19% year-over-year to $1.98 billion, with product revenue up 11% and service revenue up 22% [5][34] - Non-GAAP operating margins expanded by nearly 600 basis points to 28.6%, and adjusted free cash flow was $2.9 billion on a trailing 12-month basis [5] - Non-GAAP EPS increased 39% year-over-year to $1.46, and GAAP net income grew significantly even without one-time items [5] - Remaining Performance Obligation (RPO) grew 22% year-over-year to $10.8 billion, with current RPO at $5.2 billion [5][34] - Billings grew 16% year-over-year, but the US federal market weakness impacted billings in Q2 [5][34] Business Line Performance - Network Security: Achieved 50% ARR growth in SASE for the fifth consecutive quarter, with over 30% of new SASE customers being new to Palo Alto Networks [6] - Prisma Cloud: Recorded the highest new ACV growth in five quarters, with 30% growth in customers using two or more modules and 60% growth in customers using three or more modules [7] - Cortex: XSIAM drove significant growth, with ARR for XSIAM customers being more than five times higher than Cortex customers without XSIAM. Bookings exceeded $90 million in Q2 [8] Market Performance - Americas, EMEA, and JPAC all grew revenue by 19% year-over-year [34] - US federal market weakness persisted, with significant shortfalls in billings due to delayed projects and certifications [9][34] - Global 2000 adoption increased, with 79% of Global 2000 companies transacting on at least two platforms and 57% on all three platforms, up from 73% and 47% two years ago [10] Strategy and Industry Competition - The company is accelerating its platformization and consolidation strategy, aiming to drive vendor consolidation and reduce customer friction through programs like legacy trade-ins and no-cost introductory offers [24][25] - The long-term target is to achieve $15 billion in ARR by 2030, with a focus on recurring revenue and industry-leading non-GAAP operating margins in the low to mid-30s [26] - The company is leveraging AI to drive growth, with AI-related opportunities estimated at $13 billion to $17 billion over the next five years [30] Management Commentary on Market and Future Outlook - Demand for cybersecurity remains strong, but customers are experiencing spending fatigue, leading to a focus on ROI and total cost of ownership [18][19] - The company sees AI as a significant inflection point in cybersecurity, with plans to roll out three new AI-based product offerings by the end of the fiscal year [27][31] - The US federal market weakness is expected to continue into Q3 and Q4, but the company is offsetting this with non-product backlog shipments [9][34] Other Key Information - The company launched programs to reduce customer friction, including legacy trade-ins and no-cost introductory offers, which are expected to impact billings and revenue growth over the next 12-18 months [24][25] - AI offerings, including XSIAM, ADEM, and AIOps, reached $100 million in ARR, marking a significant milestone in AI security [30] Q&A Summary Question: Spending Fatigue and Billings Impact - Spending fatigue refers to customers optimizing their cybersecurity budgets rather than reducing spending. The billings cut is due to deferred payments and platformization initiatives [46][47] Question: US Federal Market Weakness - The US federal market weakness is specific to delayed projects and certifications, with no broader market implications. The company expects this trend to continue into Q3 and Q4 [53][54] Question: Platformization Strategy - The platformization strategy aims to accelerate vendor consolidation and reduce customer friction. The company expects a 12-18 month impact on billings but believes this will lead to higher growth rates in the long term [56][57] Question: Pricing and Discounting - The company is not engaging in a price war but is offering deferred payment structures to reduce customer risk. This approach is expected to lead to higher renewal and expansion rates [61][68] Question: AI and Competitive Landscape - The company sees AI as a significant growth driver, with plans to roll out new AI-based products. The competitive landscape remains strong, with the company maintaining a leadership position in multiple categories [90] Question: Free Cash Flow and Margin Targets - The company is confident in maintaining its free cash flow margin targets, supported by operating margin expansion and prior contract arrangements [86][87]

For the quarter ended January 2024, Palo Alto Networks (PANW) reported revenue of $1.98 billion, up 19.3% over the same period last year. EPS came in at $1.46, compared to $1.05 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $1.97 billion, representing a surprise of +0.22%. The company delivered an EPS surprise of +12.31%, with the consensus EPS estimate being $1.30.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall ...

Palo Alto Networks Inc. shares were tumbling in Tuesday’s extended session after the cybersecurity company came up short with its forecasts for the current quarter and trimmed its full-year revenue outlook. The company models fiscal third-quarter revenue of $1.95 billion to $1.98 billion along with $2.30 billion to $2.35 billion in billings, a metric that takes into account deferred revenue. The FactSet consensus was for $2.04 billion in revenue and $2.62 billion in billings. Palo Alto Networks PANW, -0 ...

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...

Shares of cybersecurity company Palo Alto Networks plunged 13% in extended trading Tuesday, after the company reported a beat on the top and bottom lines but lowered its full-year guidance for revenue and billings.Here's how the company did compared to LSEG, formerly Refinitiv, estimates:Earnings per share: $1.46, adjusted, vs. $1.30 expectedRevenue: $1.98 billion vs. $1.97 billion expectedThis is breaking news. Please check back for updates. ...

Palo Alto Networks Inc (NASDAQ: PANW) is trading down in extended hours even though its reported market-beating results for its fiscal second quarter.Why is Palo Alto Networks stock down in after-hours?Copy link to sectionThe stock is being punished primarily on the muted guidance. Palo Alto Networks now forecasts total billings to fall between $2.30 billion and $2.35 billion in Q3. Analysts, in comparison, were at billion. Still, Nikesh Arora – the chief executive of Palo Alto Networks said in a press rele ...