Palo Alto Networks Posts a Strong Fourth Quarter and Outlook

On September 9, Palo Alto Networks (PANW) reported impressive results for the fourth quarter. The company posted total revenue of $283.9 million, up 59% year-over-year from $178.2 million in the fourth quarter of fiscal year 2014. The company also provided its revenue guidance for first quarter of fiscal year 2016, and forecasts total revenue to be in $280 to $284 million range, depicting year-over-year expansion in the 46% to 48% range.

In addition, Palo Alto declared fiscal fourth quarter non-GAAP net income of $25 million, or $0.28 per share, as against non-GAAP net income of $9.1 million, or $0.11 per share, during the prior-year period.
The company has provided earnings guidance for the first quarter of 2016 and forecasts diluted non-GAAP earnings per share to be in $0.31 to $0.32 range.

Palo Alto reported solid growth in both its top and bottom lines primarily driven by the growing customer traction for its unique and innovative set of security solutions, specifically designed for both the individual and enterprise customers. Going ahead, I think that Palo Alto will be able to continue this impressive performance due to reasons discussed below.

Impressive growth in key metrics

During fiscal year 2015, Palo Alto expanded its customer base to more than 26,000 customers, grew its technology partnerships and distribution associations, and improved its advanced security platform by lucrative product offerings.

During the fourth quarter, Palo Alto’s land and sales growth model delivered significant expansion in revenue, deferred revenue, and billings. The company delivered $111.3 million in operating cash flows during the fourth quarter and generated $1.3 billion of cash, cash equivalents and investments for the complete fiscal year 2015.

Importantly, Palo Alto has been rated outstanding by the Technology Services Industry Association for Commitment to Customer Support and Success. This unique certification guarantees Palo Alto to be a key provider of technical support for the customers and enable them to capitalize on their technology investments.

New products will be key to growth

Palo Alto recently launched PAN-OS 7.0, which is the latest iteration of its superior security platform operating system comprising of over 70 feature improvements that include automation, analysis, and operational efficiencies. These have been crafted to help customers avoid threats from impacting their endpoints, networks and cloud-driven data centers.

The online security major is increasingly attracting new customers through the introduction of a security platform, and thus further expanding its already robust customer base. The new technology certification being achieved by the company signifies the strength of its technology portfolio, and thus will drive significant customer traction for its superior products and services.

Palo Alto has also launched the PA-7080, which is a 200 Gbps chassis-based device and depicts its advanced firewall, offering impressive performance and scalability for big enterprises and key service providers.

The cybersecurity company has also entered into a unique agreement with Tanium that combines the respective capabilities of both the companies. This will improve the accuracy, effectiveness, and speed by which enterprises will be able to avoid, identify, and react to present cyber threats in their network and endpoints prior to any damage done.


All in all, Palo Alto delivered impressive growth last quarter and the trend is expected to continue on the back of its strong customer base and new products. The stock has already gained more than 45% this year, and I won’t be surprised if its impressive run continues.
Published on Sep 12, 2015
By Harsh Singh Chauhan

Copyrighted 2020. Content published with author's permission.

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