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Palo Alto Networks Shares Soar On Upbeat Forecast

May 31, 2017, 8:59 PM UTC
Key Speakers At Bloomberg's The Next Big Thing Summit
Mark McLaughlin, chairman, president and chief executive officer of Palo Alto Networks Inc., speaks during the Bloomberg Next Big Thing Summit in Half Moon Bay, California, U.S., on Monday, June 17, 2013.The summit convenes investors and entrepreneurs in technology, science and data to examine the future of technology, business and how innovation is changing the human experience. Photographer: David Paul Morris/Bloomberg via Getty Images Photographer: David Paul Morris/Bloomberg via Getty Images
David Paul Morris—Bloomberg Bloomberg via Getty Images

Cybersecurity company Palo Alto Networks reported a better-than-expected adjusted profit for the third quarter and gave an upbeat forecast for the current quarter, as it added a near-record number of customers.

The company’s shares rose nearly 12% in extended trading on Wednesday.

“We reported record revenue … in our fiscal third quarter and added the second highest number of new customers in the company’s history,” Chief Executive Mark McLaughlin said in a statement.

The latest report follow a disappointing second-quarter report in February, which Palo Alto blamed on “some execution challenges” that were identified by analysts as disruption in the company’s salesforce and low demand for its newer products.

Palo Alto, whose customers include enterprises and government bodies, said revenue rose 25% to $431.8 million in the three month ended April 30.

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The company’s net loss narrowed to $60.9 million from $64.1 million a year earlier. On an adjusted basis it earned 61 cents per share.

Analysts on average were expecting earning of 55 cents per share on revenue of about $412 million, according to Thomson Reuters I/B/E/S.

Services revenue, including that from contract-based subscriptions, surged nearly 46% to about $268 million, or roughly 62% of total revenue.

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The company forecast an adjusted profit of 78-80 cents per share for the current quarter, and revenue of $481-$491 million.

Analysts were expecting a profit of 74 cents per share and revenue of about $484 million.

” … Guiding revenue in line with the Street is the prudent thing to do and could set the stage for better results for Q4,” Matt Hedberg, an analyst with RBC Capital Markets, told Reuters.

Palo Alto’s shares (PANW) were up 11.6% at $132.39 in trading after the bell.