Palo Alto forecasts annual results above estimates on cybersecurity demand
Updates shares in paragraph 2, adds analyst comment in paragraph 5
By Jaspreet Singh
Aug 19 (Reuters) -Palo Alto Networks PANW.O forecast fiscal 2025 revenue and profit above Wall Street estimates on Monday, a sign of growing demand for its cybersecurity products as the digital threat landscape evolves.
Its shares rose about 2% in extended trading, as the company announced an additional $500 million for share repurchases. They dipped briefly during the post-earnings call after CEO Nikesh Arora said the recent global IT outage has caused several customers to reevaluate their options.
A surge in online threats have triggered demand for companies such as Palo Alto offering cybersecurity products. However, analysts have said the July 19 outage, linked to CrowdStrike's CRWD.O software update, has exposed risks of dependence on a single vendor.
Beginning this quarter, the company will give next-generation security annual recurring revenue as the key financial metric for revenue projections both quarterly and annually, CFO Dipak Golechha said.
"It was a strong quarter and better-than-expected beat and raise as PANW continues to scale its Next-Gen Security business while balancing profitable growth," said Shrenik Kothari, lead sector analyst at Baird.
The company, whose products include cloud security suite Prisma and the AI-powered Cortex portfolio, expects its annual revenue to be between $9.10 billion and $9.15 billion, compared with analysts' average estimate of $9.11 billion, according to LSEG data.
Palo Alto expects its annual adjusted profit per share in the range of $6.18 to $6.31, compared with estimates of $6.19.
Its fourth-quarter revenue rose about 12% to $2.19 billion, beating expectations of $2.16 billion.
The company, which counts NetApp NTAP.O, Iron Mountain IRM.N and a U.S. federal agency as customers, posted an adjusted profit per share of $1.51, exceeding estimate of $1.41.
Earlier this month, rival Fortinet FTNT.O raised its annual revenue forecast.
Reporting by Jaspreet Singh in Bengaluru; Editing by Maju Samuel
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