Palo Alto Networks Inc (NYSE:PANW, XETRA:5AP) shares rose more than 10% in after-hours trading on Tuesday after the cybersecurity company reported fiscal third quarter results that exceeded Wall Street expectations and issued stronger-than-expected earnings guidance for the current quarter.
The company reported fiscal third-quarter revenue of $3 billion, up 31% from a year earlier and ahead of analysts' consensus estimate of $2.94 billion.
Adjusted earnings came in at $0.85 per share, surpassing expectations of $0.80 per share.
Growth was supported by contributions from recently acquired businesses CyberArk and Chronosphere, which added $388 million in revenue during the quarter.
Palo Alto's Next-Generation Security annual recurring revenue (ARR) increased 60% year over year to $8.1 billion, including $1.6 billion attributable to CyberArk and Chronosphere.
Remaining performance obligations (RPO), a measure of contracted future revenue, rose 36% to $18.4 billion, including $1.8 billion from the acquisitions.
For the fiscal fourth quarter, Palo Alto Networks forecast total revenue of $3.345 billion to $3.355 billion, representing approximately 32% year-over-year growth.
The company also projected diluted non-GAAP earnings of $0.96 to $0.98 per share for the quarter, ahead of the consensus estimate of $0.94 per share.
Palo Alto expects Next-Generation Security ARR to reach between $8.90 billion and $8.95 billion in the fourth quarter, representing annual growth of 59% to 60%, while remaining performance obligations are expected to rise to between $20.9 billion and $21 billion.
"Q3 was a standout quarter for Palo Alto Networks, with accelerating organic bookings growth as customers turn to us to secure their AI deployments at scale," Palo Alto CEO Nikesh Arora said in a statement.
"The latest advancements at the AI frontier have increased the level of urgency around cybersecurity, and redefined the shape of the industry for the coming years."