Shares in Palo Alto Networks Inc. rose in late trading today after the network management and security firm reported beats in its fiscal fourth quarter and pleased investors with a higher-than-expected outlook.
For the quarter ended July 31, Palo Alto Networks reported adjusted earnings per share of $1.51, up from $1.44 in the same quarter of the previous year, on revenue of $2.2 billion, up 12% year-over-year. Analysts had expected adjusted earnings of $1.41 per share and revenue of $2.16 billion.
Core to Palo Alto Networks’ strong figures were customer growth and customers spending more, as the company’s annual recurring revenue for its next-generation security product grew 43% year-over-year, to $4.22 billion. Remaining performance obligations, a metric that represents the total value of contracted revenue that the company has not yet recognized, rose 20% from a year ago, to $12.7 billion.
Through the quarter, Palo Alto Networks signed various large companies as part of its platformization strategy. They included eight-figure deals with a global energy company and a semiconductor company and a nine-figure expansion deal with a global media and entertainment company.
Business highlights in the quarter included Palo Alto Networks collaborating with multicloud networking software company Prosimo Inc. to bring zero trust to application workloads and multicloud environment. Under the partnership, Prosimo’s Full Stack Cloud Transit platform now integrates with Palo Alto’s VM-Series Virtual Next-Generation Firewall to allow enterprises to deploy security as close as possible to the workload they protect.
For its full fiscal year 2024, Palo Alto Networks reported revenue of $8.028 billion, up from $6.9 billion in fiscal year 2023 and $5.5 billion in fiscal 2022.
“We finished off the year with strong execution on our platformization strategy in Q4,” Nikesh Arora, chairman and chairman of Palo Alto Networks, said in the company’s earnings release. “As we look forward to fiscal year 2025 and beyond, we are focused on scaling our Next-Generation Security business through continued innovation and execution.”
For its fiscal 2025 first quarter, Palo Alto Networks expects to see adjusted earnings per share of $1.47 to $1.49 on revenue of $2.1 billion to $2.13 billion. Both were ahead at the midpoint compared to what analysts were expecting — $1.43 per share and revenue of $2.1 billion.
For the full fiscal year, the company expects to see adjusted earnings per share of $6.18 to $6.31 on revenue of $9.1 billion to $9.15 billion. Both were also ahead at the midpoint compared with an expected $6.22 and $9.1 billion.