Earnings Results: Forecast sinks Palo Alto Networks’ stock despite ‘unprecedented level’ of cybersecurity attacks

by | Nov 15, 2023 | Stock Market

Shares of Palo Alto Networks Inc. slid after hours Wednesday after the cybersecurity company trimmed its full-year outlook for billings, despite what it said was an “unprecedented level” of attacks driving demand for greater security. Palo Alto Networks
said it expected total billings of between $10.7 billion and $10.8 billion, compared with a forecast given in August for $10.9 billion to $11 billion. The company considers billings a key metric that factors in subscription and support revenue.

Management held to its forecast for $8.15 billion to $8.20 billion in sales. But it raised its adjusted profit forecast to $5.40 to $5.53 a share. Palo Alto also said it expected fiscal second-quarter billings in the range of $2.335 billion to $2.385 billion, below FactSet forecasts for $2.41 billion. It forecast second-quarter sales of $1.955 billion to $1.985 billion, with the midpoint in line with forecasts, and adjusted earnings per share of $1.29 to $1.31, above estimates for $1.25. Shares fell 9.3% after hours on Wednesday. The company reported the results in the wake of massive cyberattacks on big companies, regulatory efforts to hasten the disclosure of such attacks and attackers’ increased use of AI to steal sensitive data within a matter of hours. Those trends have driven greater demand for cybersecurity. “An unprecedented level of attacks is fueling strong demand in the cybersecurity market,” Nikesh Arora, Palo Alto Networks’ chief executive, said i …

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