US Markets
Wednesday, February 21st, 2024 3:31 pm EDT
Key Points
- Palo Alto Networks shares plunged 19% in extended trading after reporting better-than-expected earnings but lowering full-year revenue and billings guidance.
- The company beat estimates with adjusted earnings per share of $1.46 and revenue of $1.98 billion, but it reduced its full-year total billings guidance to $10.1-$10.2 billion and revenue guidance to $7.95-$8 billion.
- CEO Nikesh Arora attributed the lowered guidance to a strategic shift aimed at accelerating growth, platform migration, and activating AI leadership, with upcoming quarter revenue guidance falling short of consensus estimates, reflecting a significant adjustment in growth trajectory.
Shares of cybersecurity company Palo Alto Networks tumbled 19% in extended trading following its quarterly earnings report, despite beating expectations on both the top and bottom lines. The company reported adjusted earnings per share of $1.46, exceeding the expected $1.30, and revenue of $1.98 billion, slightly higher than the anticipated $1.97 billion. However, Palo Alto Networks revised its full-year guidance downwards, citing a shift in strategy aimed at accelerating growth, migrating and consolidating platforms, and activating AI leadership. CEO Nikesh Arora explained in a conference call with analysts that the company anticipated challenges from customers as a result of this strategic shift. The revised guidance now forecasts total billings between $10.1 and $10.2 billion for the year, down from the previous $10.7 to $10.8 billion, and revenue ranging from $7.95 to $8 billion, compared to the earlier projection of $8.15 to $8.2 billion. The upcoming quarter’s revenue guidance also fell short of consensus estimates, with Palo Alto Networks now expecting revenue between $1.95 billion and $1.98 billion, lower than the anticipated $2.04 billion. Despite the company’s intention to activate its AI leadership strategy, reflected in the market’s heightened interest in AI-driven cybersecurity solutions, Palo Alto Networks faces a significant adjustment in its growth trajectory, with reduced expectations for billings and revenue growth for the full year, from 16-17% to 10-11% and 18-19% to 15-16%, respectively.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/02/20/palo-alto-networks-shares-plunge-after-company-cuts-billings-revenue-guidance.html
