Palo Alto Networks reported October-ended quarter earnings and revenue that topped Wall Street targets. PANW stock climbed as growth in next-generation, annual recurring revenue from cloud products accelerated.
The cybersecurity firm reported earnings for its fiscal first quarter after the market close on Thursday. It also announced the acquisition of Cider Security for $195 million in cash.
Palo Alto said profit rose 50% year over year to 83 cents per share on an adjusted basis. Including acquisitions, revenue rose 25% to $1.6 billion. Analysts expected earnings of 69 cents a share on sales of $1.55 billion.
Billings, a sales growth metric, rose 27% to $1.7 billion vs. estimates of $1.652 billion.
For the current quarter ending in January, Palo Alto projected earnings of 77 cents a share on revenue of $1.65 billion. Analysts had estimated profit of 70 cents a share on revenue of $1.65 billion.
PANW Stock Rises After Report
"Next-generation security annual recurring revenue grew 67% to $2.1 billion (topping estimates of $1.9 billion) while product revenue of $330 million grew 12% vs. consensus at 9%," RBC Capital analyst Matthew Hedberg said in a report. The 67% next-gen ARR growth accelerated from 60% in the previous quarter.
Palo Alto stock popped nearly 7% to close at 167.48 on the stock market today.
PANW stock has declined 15.6% in 2022 through Thursday's close. It holds a Relative Strength Rating of 64 out of a best-possible 99, according to IBD Stock Checkup.
Newly acquired Cider Security sells application security and software supply chain security services.
Meanwhile, the company has spent over $3.4 billion making 10 acquisitions over the past three years. With roots in the "firewall" network security market, Palo Alto aims to build a broad cloud-based security platform.
Firewall appliances protect computer networks by blocking online intrusions and monitoring web-based apps.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
