palo alto networks Shares fell 6% after the bell on Tuesday after beating Wall Street’s fiscal second-quarter expectations but disappointing guidance.
Here’s how the company performed against LSEG’s estimates:
Earnings per share: $1.03 per share excluding items (94 cents expected) Revenue: $2.59 billion ($2.58 billion expected)
The cybersecurity company expected fiscal third-quarter earnings to be lackluster in the range of 78 cents to 80 cents, falling short of LSEG’s forecast of 92 cents.
Sales are expected to reach between $2.94 billion and $2.95 billion, exceeding expectations of $2.6 billion.
The company said sales increased 15% from $2.3 billion in the same period last year. Net income was $432 million, or 61 cents per share, compared to $267 million, or 38 cents per share, in the year-ago period.
Palo Alto also announced Tuesday that it will acquire Israeli cybersecurity startup Koi to secure AI agents as rising artificial intelligence innovations fuel more sophisticated cyberattacks. The company is betting big on AI tools, recently launching an AI agent to help customers automate certain security responses.
The company is also in the midst of a major spending spree as CEO Nikesh Arora transforms Palo Alto into a hub for all things cybersecurity. Since joining the company in 2018, he has overseen more than 20 acquisitions.
Earlier this month, the Santa Clara, California-based company paid $25 billion for Israeli identity security firm CyberArk, completing its largest acquisition in its history. In January, the company completed its $3 billion-plus acquisition of cloud observability platform Chronosphere.
“Platformization continues to strengthen, and this trend is accelerated by AI. Customers are eager to both modernize and normalize their cybersecurity stacks to align with our approach,” Arora said in a release.
Remaining performance obligations, which track the amount of contracts delivered to customers, totaled $16 billion, exceeding Street estimates of $15.78 billion. Annual recurring revenue increased 33% to $6.33 billion.
Palo Alto stock has fallen 11% since the beginning of the year.
