Palo Alto Networks stock rises on earnings beat, outlook hike

The company reported a fiscal third-quarter loss of $145.1 million, or $1.50 a share, compared with a loss of $74.8 million, or 77 cents a share, in the year-ago period. Adjusted earnings, which exclude share-based compensation charges and other items, were $1.38 a share, compared with $1.17 in the year-ago period.

Revenue rose to $1.07 billion from $869.4 million in the year-ago quarter. Billings, which reflects future business under contract, rose to $1.29 billion, compared with $1.02 billion a year ago,

Analysts surveyed by FactSet had forecast earnings of $1.29 a share on revenue of $1.06 billion and billings of $1.23 billion.

“The work-from-home shift earlier in the year and recent cybersecurity issues have increased the focus on security,” said Nikesh Arora, Palo Alto Networks chairman and chief executive, in a statement. “Coupled with good execution, this has driven great strength across our business, with Q3 billings growth accelerating to 27% year over year.”

Palo Alto Networks makes security software, a hot segment in the wake of high-profile hacks like the SolarWinds intrusion and the Colonial pipeline ransomware attack.

Palo Alto Networks expects adjusted fiscal-fourth quarter earnings of $1.42 to $1.44 a share on revenue of $1.17 billion to $1.18 billion, while analysts had forecast $1.41 a share on revenue of $1.16 billion. The company also expects billings of $1.7 billion to $1.72 billion, while analysts had forecast $1.62 billion.

For the year, Palo Alto Networks expects adjusted earnings of $5.97 to $5.99 a share on revenue of $5.28 billion to $5.3 billion, while analysts expect $5.86 a share on revenue of $4.18 billion. The company also sees billings of $5.28 billion to $5.30 billion, while analysts forecast $5.16 billion.

Palo Alto Networks shares are up 46% for the past 12 months. In comparison, the ETFMG Prime Cyber Security ETF  HACK, +1.70% is up 34%, the S&P 500 index  SPX, +1.06% is up 40%, and the tech-heavy Nasdaq Composite Index  COMP, +1.77%  is up 44%.