Palo Alto Networks has projected its fiscal 2025 revenue and profit above Wall Street estimates, reflecting increased demand for its cybersecurity products as digital threats continue to escalate. The company's shares saw a 2% increase in after-hours trading following the announcement of an additional $500 million in share repurchases.
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| Palo Alto Networks headquarters with rising stock chart in the background, reflecting strong earnings and growing cybersecurity demand. |
However, the stock experienced a brief dip during the post-earnings call when CEO Nikesh Arora mentioned that a recent global IT outage had led several customers to reassess their cybersecurity options. The July 19 outage, which was linked to a software update from CrowdStrike, highlighted the risks associated with reliance on a single vendor, according to analysts.
Palo Alto Networks' CFO Dipak Golechha announced that the company will now use next-generation security annual recurring revenue as the primary financial metric for its quarterly and annual revenue projections.
"It was a strong quarter with a better-than-expected beat and raise as Palo Alto Networks continues to scale its Next-Gen Security business while balancing profitable growth," said Shrenik Kothari, lead sector analyst at Baird.
The company, known for its cloud security suite Prisma and AI-powered Cortex portfolio, expects annual revenue between $9.10 billion and $9.15 billion for fiscal 2025, slightly above the analysts' average estimate of $9.11 billion, according to LSEG data. Palo Alto Networks also forecasts annual adjusted profit per share in the range of $6.18 to $6.31, compared to estimates of $6.19.
For the fourth quarter, Palo Alto Networks reported a 12% increase in revenue, reaching $2.19 billion and surpassing expectations of $2.16 billion. The company posted an adjusted profit per share of $1.51, exceeding the estimated $1.41.
Earlier this month, rival cybersecurity firm Fortinet also raised its annual revenue forecast, signaling robust demand across the sector.
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