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Palo Alto Networks Exceeds Expectations - Revenue Surges 24%

May 20, 2021

Palo Alto Networks reported financial results for its fiscal third quarter 2021, ended April 30, 2021.

Total revenue for the fiscal third quarter 2021 grew 24% year over year to $1.1 billion, compared with total revenue of $869.4 million for the fiscal third quarter 2020. GAAP net loss for the fiscal third quarter 2021 was $145.1 million, or $1.50 per diluted share, compared with GAAP net loss of $74.8 million, or $0.77 per diluted share, for the fiscal third quarter 2020.

Non-GAAP net income for the fiscal third quarter 2021 was $139.5 million, or $1.38 per diluted share, compared with non-GAAP net income of $114.6 million, or $1.17 per diluted share, for the fiscal third quarter 2020.

Wall Street was only looking for EPS of $1.28 with revenue of  $1.06 billion.

The firm guided adjusted earnings of $1.42 to $1.44 per share in its fiscal fourth quarter, with $1.165 billion to $1.175 billion in revenue. Investors expected $1.42 in adjusted earnings per share and $1.16 billion in revenue.

"The work-from-home shift earlier in the year and recent cybersecurity issues have increased the focus on security. Coupled with good execution, this has driven great strength across our business, with Q3 billings growth accelerating to 27% year over year. In particular, we saw a number of customers make large commitments to Palo Alto Networks across our three major platforms," said Nikesh Arora, chairman and CEO of Palo Alto Networks. "We are pleased to be raising our guidance for fiscal year 2021 as we see these trends continuing into our fiscal fourth quarter, bolstering our confidence in our pipeline."

Financial Outlook

For the fiscal fourth quarter 2021, the company expects:

  • Total billings in the range of $1.695 billion to $1.715 billion, representing year-over-year growth of between 22% and 23%.
  • Total revenue in the range of $1.165 billion to $1.175 billion, representing year-over-year growth of between 23% and 24%.
  • Diluted non-GAAP net income per share in the range of $1.42 to $1.44, using 101 million to 103 million shares.

For the fiscal year 2021, the company is raising guidance and expects:

  • Total billings in the range of $5.28 billion to $5.30 billion, representing year-over-year growth of 23%.
  • Total revenue in the range of $4.20 billion to $4.21 billion, representing year-over-year growth between 23% and 24%.
  • Diluted non-GAAP net income per share in the range of $5.97 to $5.99, using 99 million to 101 million shares.
  • Adjusted free cash flow margin of approximately 30%.

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