From CNBC: 2024-05-20 20:56:16

Palo Alto Networks’ fiscal Q3 revenue rose 15% to $1.985 billion, beating estimates. Adjusted EPS increased 20% to $1.32. While billings grew just 3% to $2.33 billion, remaining performance obligation accelerated to a 23% growth rate, signaling positive future outlook in cybersecurity. Management’s forward guidance looks good for Q4 despite some billings weakness.

CEO Nikesh Arora’s focus on RPO over billings strategy for long-term growth shows promise. The company is successfully signing large, long-term deals and encouraging platformization to combat cybersecurity threats. Deals like the $150 million contract with a healthcare company illustrate Palo Alto’s position as a top player in the industry with strong demand for its solutions.

For Q4, Palo Alto Networks expects total billings of $3.43-3.48 billion, revenue of $2.15-2.17 billion, and non-GAAP EPS of $1.40-1.42. Full-year guidance includes billings of $10.13-10.18 billion, revenue of $7.99-8.01 billion, and non-GAAP EPS of $5.56-5.58. Adjusted free cash flow margin is forecasted to improve to 38.5-39%. Investors may be taking issue with the revised guidance cut at the high end.



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