Palo Alto Networks Inc (NYSE:PANW, ETR:5AP) shares plummeted more than 13% after Tuesday’s closing bell as the cybersecurity firm slashed its full-year sales outlook along with the release of its fiscal second quarter earnings.
The firm, which specializes in cloud security and endpoint protection, now expects revenue in the range of $7.95 billion to $8 billion, representing growth of 15% to 16%, down from its prior forecast of revenue in the range of $8.15 billion to $8.2 billion or growth of 18% to 19%.
It also revised its adjusted earnings per share (EPS) expectation of $5.45 to $5.55 compared to its prior expectation of $5.40 to $5.53.
“Our disciplined execution on profitable growth gives us the confidence to maintain FY'24 non-GAAP EPS and free cash flow guidance while making significant additional investments in our platformization and consolidation strategies to accelerate our long-term growth trajectory," Palo Alto CFO Dipak Golechha said in a statement.
Wall Street analysts had been expecting adjusted EPS of $5.49 on revenue of $8.17 billion.
Palo Alto’s fiscal 3Q outlook fell short of estimates, also weighing on the stock. The company forecast adjusted EPS of $1.24 to $1.26 on revenue in the range of $1.95 to $1.98, compared to estimates of $1.31 and $2.04 billion, respectively.
For the fiscal second quarter, the three months ended January 31, 2024, revenue grew 19% year-over-year to $2 billion, narrowly ahead of estimates of $1.97 billion.
Adjusted earnings per share increased from $1.05 in the year-ago quarter to $1.46. This topped estimates of $1.30.
Palo Alto shares traded down 13.2% at $318 shortly after the release of its 2Q earnings.