Cyber Security Firm Palo Alto Network’s Third Quarter Loss Widens
Palo Alto Networks reported a bigger third-quarter loss as the cyber security company spent more on marketing its products.
The company’s shares fell 8.1% to $136.18 in extended trading on Thursday.
The company said operating expenses jumped 50% to $309.5 million in the quarter ended April 30, from a year earlier.
Get Data Sheet, Fortune’s technology newsletter.
Sales and marketing expenses also rose 54% to $202 million.
Palo Alto (PANW) also forecast an adjusted fourth-quarter profit of 48-50 cents per share and revenue of $386 million-$390 million. Analysts on average were expecting a profit of 50 cents per share and revenue of $389.5 million, according to Thomson Reuters.
Billings, defined as total revenue plus the change in deferred revenue, rose 61% to $486.2 million in the third quarter.
Cybersecurity Has a Funding Problem
Analysts expect the company to continue to gain market share from traditional security service providers as Palo Alto shifts to more lucrative subscription-based services and customers move to newer cloud platforms.
Palo Alto’s net loss widened to $70.2 million, or 80 cents per share, in the third quarter, from $45.9 million, or 56 cents per share, a year earlier.
Excluding items, the company earned 42 cents per share, in line with the average analyst estimate.
The company’s revenue rose to $345.8 million from $234.2 million, beating analysts’ estimate of $339.5 million.
Up to Thursday’s close, shares of the company have fallen 17.3% this year.