Palo Alto Networks earnings exceed estimates amid worries about cybersecurity

Palo Alto Networks shares rose as much as 6% in extended trading on Thursday after the security hardware and software company announced fiscal second-quarter earnings that were healthier than analysts had expected.

Here’s how the company did:

• Earnings: $1.38 per share, adjusted, vs. $1.28 per share as expected by analysts, according to Refinitiv.
• Revenue: $1.07 billion, vs. $1.06 billion as expected by analysts, according to Refinitiv.

Revenue grew 24% year over year in the quarter, which ended on April 30, compared with 25% growth in the previous quarter, according to a statement.

CEO Nikesh Arora said in the statement that there’s greater attention on cybersecurity because remote working became popular during the pandemic, as well as a spate of recent cybersecurity issues — presumably including attacks on Microsoft‘s Exchange Server software, vulnerabilities in SolarWinds software and the recent ransomware attack against Colonial Pipeline that shut down a key fuel pipeline.

During the quarter the company acquired Bridgecrew, a cloud security company, for $156 million.

With respect to guidance, the company said it expects adjusted earnings of $1.42 to $1.44 per share in its fiscal fourth quarter, with $1.165 billion to $1.175 billion in revenue. Analysts polled by Refinitiv had expected $1.42 in adjusted earnings per share and $1.16 billion in revenue.

Notwithstanding the after-hours move, shares of Palo Alto Networks were down about 4% since the start of the year, compared with a gain of roughly 11% for. theS&P 500 index over the same period.

Executives will discuss the results with analysts on a conference call starting at 5 p.m. Eastern time.

This is breaking news. Please check back for updates.

WATCH: Palo Alto Networks CEO on what we know about the scope of the Microsoft hack