Palo Alto Networks’ stock fell nearly 4% in after-hours trading despite reporting better-than-expected revenue of $2.29 billion for the April quarter, a 15% year-on-year increase, and earnings per share of 80 cents, exceeding the consensus estimate. CEO Nikesh Arora highlighted the company’s pivotal moment in offering next-generation security products, now boasting an annual recurring revenue (ARR) of $5 billion, buoyed by the success of Cortex XSIAM, which is the fastest-growing product in the company’s history.
Despite a challenging macroeconomic environment and tariff discussions that caused customer hesitation, Arora emphasized that cybersecurity remains a crucial spending area for companies. Palo Alto’s strategy focuses on integrating a comprehensive suite of security solutions, moving from fragmented products to a unified platform. The company’s RPO rose 19% to $13.5 billion, below expectations, while its next-generation security ARR grew 34% to $5.09 billion, slightly surpassing forecasts.
The quarter saw significant customer growth, including over 40% growth in clients spending more than $5 million on security services. Major contract wins included a $90 million deal with a global consulting firm and large agreements with U.S. financial services companies.
Looking ahead, the company anticipates total revenues of $24.9 to $25.1 billion for the fiscal year 2025, in line with market expectations. Despite the stock’s initial decline, analysts maintain confidence in Palo Alto’s long-term growth potential due to its robust product offerings and market position in the cybersecurity landscape.
Source link
