Cybersecurity firm Palo Alto Networks Inc (Nasdaq: PANW) reported better-than-anticipated fiscal 2023 first quarter results. The company also issued better-than-anticipated Q2 and FY 2023 earnings guidance. Following the results, the stock of Palo Alto gained 6.97%, or $10.92, to close at $167.48.
Santa Clara, California-based Palo Alto reported first-quarter revenues of $1.563 billion, up 25% from $1.247 billion in the similar quarter last year.
For the quarter that ended October 31, 2022, the company posted a net profit of $20 million, or $0.06 per share, compared with a net loss of $103.60 million, or $0.35 per share in the quarter that ended October 31, 2021.
Excluding share-based compensation-related charges, acquisition-related costs, amortization expense of acquired intangible assets, litigation-related charges, restructuring costs, non-cash charges related to convertible notes, foreign currency (gain) loss associated with non-GAAP adjustments, and income tax and other tax adjustments, the company recorded Q1 2023 non-GAAP net income of $266.40 million, or $0.83 per share, an increase from $170.30 million, or $0.55 per share in Q1 2022.
Analysts surveyed by Thomson Reuters anticipated the company would report earnings of $0.69 per share on revenues of $1.55 billion.
Regarding the quarterly earnings, Nikesh Arora, chairman and CEO of Palo Alto Networks, stated “Our growth in Q1 was driven by customers continuing to increase their commitments to our security platforms as they are able to choose our best-of-breed capability and simplify their security architecture.”
Segment wise,
- Product revenues grew by 11.70% y-o-y to $330 million.
- Subscription and support revenues were $1.233 billion, up 29.60% from last year.
Looking ahead, Palo Alto reported second-quarter revenues of between $1.63 billion and $1.66 billion. Also, Q2 adjusted earnings are anticipated to be in the range of $0.76 and $0.78 per share.
Wall Street analysts anticipate the company to post earnings of $0.71 per share on revenues of $1.65 billion for the second quarter.
For FY23, Palo Alto projects revenue of between $6.85 billion and $6.91 billion. The company also expects adjusted earnings in the range of $3.37 to $3.44 per share. Analysts surveyed by Thomson Reuters are anticipating earnings of $3.17 per share on revenues of $6.87 billion.
In separate news, the company revealed that it is acquiring supply chain security provider Cider Security for roughly $195 million in an all-cash deal. Including the value of replacement equity awards, the total value of the deal is estimated to be approximately $300 million. The acquisition is expected to be completed in the current quarter.
The earnings beat and robust Q2 and FY 2023 estimates are expected to keep the stock slightly bullish in the short term.
The historical price chart indicates that the stock of Palo Alto is rising after testing the support level of 150. The next resistance is anticipated only near 180. Additionally, the stock is trading above its 50-day moving average, while the Chaikin Money Flow indicator is showing a positive reading. Therefore, we anticipate the stock of Palo Alto to remain in an uptrend in the days ahead.
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