Palo Alto Networks shares are trading up in after-hours

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on Nov 18, 2022
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  • Palo Alto Networks reports strong results for its fiscal first quarter.
  • The cybersecurity firm also announced a $195 million acquisition.
  • Palo Alto Networks shares are down over 20% versus their YTD high.

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Palo Alto Networks Inc (NYSE: PANW) is trading up in extended hours after reporting strong results for its first financial quarter, indicating continued spending on network security in the face of impending recession.

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Palo Alto Networks Q1 financial highlights

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  • Swung to a profit of $20 million or 6 cents a share
  • That compared to $103.6 million of loss last year
  • On an adjusted basis, EPS came in at 83 cents
  • Revenue jumped 25% year-on-year to $1.56 billion
  • Consensus was 69 cents a share on $1.55 billion revenue
  • Billing went up to $1.7 billion – up 27% versus a year ago
  • Generated $1.20 billion worth of free cash flow

Palo Alto Networks ended the quarter with $8.30 billion of remaining performance obligations – a 38% increase when compared to Q1 of 2022.

Palo Alto Networks’ guidance for the future

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For the current financial quarter Palo Alto Networks forecasts $1.63 billion to $1.66 billion in revenue, up to $1.99 billion worth of billings, and 76 cents to 78 cents of adjusted EPS, as per the earnings press release.

In comparison, analysts were at $1.65 billion for revenue and 71 cents for adjusted per-share earnings. Palo Alto Networks shares are still down more than 20% versus their year-to-date high.

Palo Alto Networks announces an acquisition

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The cybersecurity stock jumped also because Palo Alto Networks said it will buy Cider Security for $195 million in cash. The transaction is expected to complete in Q2. According to CEO Nikesh Arora:

We’re focused on expanding the breadth of our offerings and our pace of innovation to continue to drive share gains in the cybersecurity market.

Wall Street currently has a consensus “buy” rating on Palo Alto Networks shares.

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