From CNBC: 2024-11-20 20:18:48

Palo Alto Networks delivered strong Q1 results, exceeding revenue and EPS estimates. The stock dropped due to profit-taking after raising full-year guidance but failed to meet high investor expectations. Revenue grew 14% year over year to $2.14 billion, with adjusted EPS at $1.56. The board approved a 2-for-1 stock split on Dec. 12.

Palo Alto’s success is attributed to the growing cybersecurity market and platformization strategy. The company added over 70 new platformizations in Q1, totaling 1,100 deals. Larger platformization deals led to significant revenue growth, with 305 deals over $1 million and 60 deals over $5 million in the quarter. The stock dropped despite strong performance due to high investor expectations.

Palo Alto Networks stopped providing billings guidance but emphasized its Remaining Performance Obligation (RPO) and Next-Gen Security ARR metrics. RPO increased 21% to $12.6 billion, beating estimates. Next-Gen Security ARR rose 40% to $4.52 billion, surpassing expectations. Guidance for Q2 and fiscal 2025 includes revenue, EPS, RPO, and Next-Gen Security ARR estimates.

For the fiscal 2025 second quarter, Palo Alto expects revenue of $2.22-2.25 billion, non-GAAP EPS of $1.54-1.56, RPO of $12.9-13 billion, and Next-Gen security ARR of $4.70-4.75 billion. Full-year fiscal 2025 guidance includes revenue of $9.12-9.17 billion, non-GAAP EPS of $6.26-6.39, RPO of $15.2-15.3 billion, and Next-Gen security ARR of $5.52-5.57 billion. The company maintains an adjusted free cash flow margin of 37-38%.



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