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Profits of Palo Alto Networks (PANW) 3rd quarter 2022

Shares of Palo Alto Networks rose 12% in extended trading on Thursday as network security firm announced third-quarter financial results, which were stronger than analysts had expected.

See how the company did it:

  • Profits: $ 1.79 per share, adjusted, compared to $ 1.68 per share as expected by analysts, according to Refinitiv.
  • Income: $ 1.39 billion, up from $ 1.36 billion expected by analysts, according to Refinitiv.

Palo Alto Networks said revenue rose 29% year-on-year in the quarter, which ended April 30, according to a statement. Revenue increased by 30% in the previous quarter.

“We saw strong peak growth in the third quarter, which is a testament to the consistent performance of our teams in harnessing strong cyber security demand trends,” Palo Alto Networks CEO Nikesh Arora was quoted as saying in the statement.

Palo Alto Networks has observed Russian cyber attacks since the war broke out during the quarter, and sees greater interest in protecting companies and governments across Europe, Arora told analysts in a teleconference.

Supply shortages pose challenges, Arora said. Higher parts and shipping costs cut the company’s adjusted gross profit margin for the quarter, said Dipak Golechha, chief financial officer. The restrictions “are likely to persist for another year,” Arora said.

Both in the US and abroad, commodity prices are moving higher. But so far this is not a big challenge for Palo Alto Networks.

“We do not see the pressure of inflation or declining economic activity,” Arora said.

In the quarter, Palo Alto Networks announced a next-generation firewall tool available exclusively through Amazon’s public cloud. The company also announced a tool to help companies identify vulnerabilities in software supply chains following issues arising from malicious updates to SolarWinds software Orion.

The executives increased their instructions for the whole financial year. They now expect adjusted earnings of $ 7.43 to $ 7.46 per share on revenue of $ 5.481 to $ 5.501 billion. Analysts polled by Refinitiv were looking for $ 7.29 in adjusted earnings per share of $ 5.46 billion in revenue.

The guidance takes into account wage inflation, Arora said, in part because of the proximity of California-based Palo Alto Networks to major technology companies in Silicon Valley.

“We have not hired as many people as we expected during this market,” he said. “It’s a very tight job market today, as you can see. Having said that, my personal view is that job markets will become easier over the next six to 12 months.”

He said the company’s employees had left to join start-ups six months ago. Now that has changed.

“Market rationalization is forcing people to take stock and say, ‘Wait, do I really want to go make that move?'” Arora said.

Before closing, the stock fell almost 21% since the beginning of 2022, while the S&P 500 index fell about 18% over the same period.

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Profits of Palo Alto Networks (PANW) 3rd quarter 2022

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