Palo Alto Networks shares surge after strong Q3 earnings beat
Palo Alto Networks reported fiscal third-quarter results that came in ahead of Wall Street expectations, as rising artificial intelligence-related threats continue to fuel demand for more advanced cybersecurity solutions, News.Az reports, citing CNBC.
The company’s shares surged 10% following the announcement.
Here is how the company performed compared with LSEG estimates:
Earnings per share: 85 cents adjusted versus 80 cents expected
Revenue: $3.00 billion versus $2.94 billion expected
Revenue increased 31% compared with a year earlier, which included $388 million contributed by its recent CyberArk and Chronosphere acquisitions, according to the cybersecurity company.
However, the company reported a net loss of $177 million, or 22 cents per share, compared with net income of $262 million, or 37 cents per share, in the same period a year earlier.
The earnings beat came against lowered expectations after the company issued disappointing guidance in February that fell short of analyst forecasts.
Palo Alto Networks also provided stronger-than-expected guidance for the fourth quarter. The company expects revenue to range between $3.35 billion and $3.36 billion, compared with analysts’ estimate of $3.28 billion. Full-year guidance was also raised, coming in at $11.42 billion to $11.43 billion.
“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,” said CEO Nikesh Arora in a statement.
Palo Alto shares have rallied more than 60% this year and over 80% this quarter as sophisticated cyber tools, capable of exposing software flaws, force companies to invest in cyber tools.
Earlier in the year, the sector sold off on worries that AI would massively disrupt software, including cybersecurity.
Both Palo Alto and its competitors are leaning into more AI acquisitions to beef up their suite of tools as the agentic revolution paves the way for attackers to carry out quicker and faster cyberattacks. Within the last year, the company bought Israeli identity security platform CyberArk for $25 billion.
Other significant acquisitions include KOI Security, AI observability platform Chronosphere and Protect AI.
Palo Alto is an early participant in Anthropic’s Project Glasswing, which is aimed at testing the potential cybersecurity ramifications of its powerful Mythos model.
The model, which spiked concerns that hackers could use the tool to accelerate attacks, opened to 150 more partners for testing on Tuesday.
By Nijat Babayev
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