Palo Alto Networks Tops Wall Street Estimates in Q4

Cybersecurity Company Palo Alto Networks released its fourth quarter financial results this week, revealing a big beat.

For the quarter, the company reported a loss of $58.9 million, or 61 cents a share. This is compared to a loss of $20.8 million, or 22 cents a share in the year ago quarter. Adjusted earnings were $1.48 a share, excluding share-based compensation charges and other items. Revenue was $950.4 million compared to $805.8 million a year ago. Billings, which reflects future business under contract, rose 32% to $1.39 billion from a year ago.

According to analysts surveyed by FactSet, earnings of $1.39 a share were expected with revenue of $924 million. Analysts had also expected billings of $1.2 billion.

The company also announced its plans to acquire incident-response company Crypsis Group for $265 million in cash to support its Cortex XDR platform. The company expects the transaction to close in the fiscal first quarter.

Palo Alto Networks is shifting its own operations to a more cloud-centered environment. “We have significantly shrunk our data-center capacity, we basically shifted all of our all of our own compute to Google Cloud or to AWS,” said Chairman and CEO Nikesh Arora. “And when that happens, we’re not deploying more hardware in our data centers, we’re actually buying more cloud from the public cloud providers.”

Arora had said on the earnings call, “As you can probably tell, we’re delighted with our results this quarter and extremely thankful for the resilience that the team at Palo Alto Networks has shown in navigating the current environment. I cannot appreciate their efforts enough. I also want to acknowledge the challenges that people are experiencing globally as a result of COVID-19. This is a difficult time and we need to pull our strengths and find empathy to get through it.”

Looking ahead, the company is expecting adjusted fiscal-first quarter earnings of $1.32 to $1.35 a share on revenue of $915 million to $925 million, while analysts had forecast $1.18 a share on revenue of $900.9 million. The company is also expecting billings of $1.03 billion to $1.05 billion, while analysts had forecast $1.04 billion.