Palo Alto Networks Inc (NYSE:PANW, XETRA:5AP) shares fell more than 5% in after-hours trading on Tuesday after the cybersecurity company issued profit guidance for the current quarter that came in below Wall Street expectations, despite reporting fiscal second quarter results that topped estimates.
The company posted fiscal Q2 revenue of $2.6 billion, up 15% year over year and ahead of analyst estimates of $2.58 billion.
Non-GAAP earnings were $1.03 per diluted share, exceeding the $0.93 consensus forecast. GAAP net income was $432 million, or $0.61 per share, compared with $267 million, or $0.38 per share, a year earlier.
Next-Generation Security annual recurring revenue (ARR) rose 33% year over year to $6.3 billion, while remaining performance obligation grew 23% to $16.0 billion.
CEO Nikesh Arora said the company continued to see momentum in its platform strategy. “We saw continued strength in platformizations, a trend that is accelerating due to AI — customers are keen to both modernize and normalize their cybersecurity stack, aligning them to our approach,” Arora said in a statement. He added that adoption of AI security remains strong and is expected to be a long-term driver.
CFO Dipak Golechha highlighted profitability trends, noting the company delivered its third consecutive quarter of non-GAAP operating margins above 30%.
Looking ahead, Palo Alto Networks guided fiscal third quarter revenue of $2.941 billion to $2.945 billion, well above analyst expectations of about $2.6 billion.
However, the company guided to non-GAAP EPS of $0.78 to $0.80, below the Street estimate of $0.91.
The company also expects Next-Generation Security ARR of $7.94 billion to $7.96 billion and remaining performance obligation of $17.85 billion to $17.95 billion for the fiscal third quarter.