Palo Alto Networks (PANW.O) has projected fiscal 2025 revenues and profits that surpass Wall Street’s forecasts, reflecting a growing need for its cybersecurity solutions amid a shifting digital threat landscape. Following the announcement, the company’s stock increased by approximately 2% in after-hours trading, buoyed by the news of an additional $500 million allocated for share buybacks. However, shares experienced a brief decline during the earnings call after CEO Nikesh Arora revealed that a recent global IT outage had prompted several customers to reassess their cybersecurity choices.
The surge in online threats has heightened demand for cybersecurity providers like Palo Alto Networks. Analysts have pointed out that the outage on July 19, tied to a software update from CrowdStrike (CRWD.O), highlighted the risks of relying heavily on a single vendor.
Starting this quarter, Palo Alto Networks will use next-generation security annual recurring revenue as its primary financial metric for both quarterly and annual revenue projections, according to CFO Dipak Golechha.
Shrenik Kothari, lead sector analyst at Baird, commented, “It was a strong quarter with results exceeding expectations, as PANW continues to expand its Next-Gen Security business while maintaining profitable growth.”
The company anticipates annual revenues between $9.10 billion and $9.15 billion, slightly above the analyst consensus of $9.11 billion. For annual adjusted earnings per share, Palo Alto Networks forecasts a range of $6.18 to $6.31, compared to estimates of $6.19.
In the fourth quarter, revenue climbed approximately 12% to $2.19 billion, surpassing the anticipated $2.16 billion. The company reported an adjusted profit per share of $1.51, beating the forecast of $1.41. Palo Alto Networks serves a range of clients, including NetApp (NTAP.O), Iron Mountain (IRM.N), and a U.S. federal agency.
Earlier this month, competitor Fortinet (FTNT.O) also raised its annual revenue forecast.
