Palo Alto Networks beats earnings and revenue expectations, but stock drops due to unchanged guidance

From CNBC: 2025-05-20 19:58:00

Palo Alto Networks reported better-than-expected earnings and revenue for its April quarter, with revenue increasing 15% year over year to $2.29 billion and adjusted EPS up 21% to 80 cents. The company’s annual recurring revenue (ARR) for its next-gen security products reached $5 billion, led by Cortex XSIAM becoming the fastest growing product in history.

Despite strong financial performance, Palo Alto Networks shares fell nearly 4% in extended trading as the company did not raise its full-year outlook for key metrics such as remaining performance obligation (RPO) and next-gen security ARR. The company’s focus on platformization strategy has shown momentum, with 90 net new platform clients added in the quarter.

CEO Nikesh Arora highlighted the importance of cybersecurity in the era of cloud computing and artificial intelligence, emphasizing the need for companies to invest in defense against sophisticated threats. Palo Alto Networks is positioned to capitalize on industry trends, showing strong growth in next-gen security ARR and customer adoption of its platform solutions.

Looking ahead, Palo Alto Networks expects total revenue of $2.49 billion to $2.51 billion for the ongoing fiscal fourth quarter, with non-GAAP EPS in the range of $0.87 to $0.89. The company raised the low end of its adjusted EPS outlook for the full fiscal year to $3.26 to $3.28. Platformization wins and strong customer growth are driving Palo Alto’s success in the cybersecurity market.



Read more at CNBC:: Palo Alto beats on earnings and revenue. Here’s why the cyber stock is dropping anyways