Palo Alto Networks (PANW 203.07, -6.12, -2.93%) is down close to 3%
after beating quarterly expectations and issuing mixed guidance. Shares of PANW
began the session with a jump to a fresh record high, but that move was
retraced in short order.
The provider of cybersecurity services for corporate customers reported above-consensus third quarter earnings of $0.99/share on a 31.3% year/year spike in revenue to $567.1 mln, which was ahead of market estimates.
In addition to reporting earnings, Palo Alto Networks announced that former Softbank officer Nikesh Arora has been appointed Chief Executive Officer and Chairman of the Board of Directors.
Product revenue grew 31.1% year/year to $215.2 mln while subscription and support revenue jumped 31.5% to $351.9 mln.
Non-GAAP gross margin declined to 76.2% from 76.4% one year ago. Non-GAAP product gross margin declined to 70.3% from 72.7% while subscription and support Non-GAAP gross margin improved to 79.8% from 78.8%.
Going forward, the company expects to generate fourth quarter earnings between $1.15/share and $1.17/share, which is below market expectations. However, the company's revenue guidance for sales between $625 mln and $635 mln was ahead of market expectations. Product revenue is expected between $246 mln and $249 mln. Total billings are expected between $815 mln and $830 mln, which would translate to year/year growth between 22% and 24%.
Palo Alto Networks also issued guidance for the fiscal year, priming the market for revenue between $2.24 bln and $2.25 bln. Product revenue is expected between $850 mln and $853 mln while total billings are expected between $2.807 bln and $2.822 bln.
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