Palo Alto Networks Inc. shares were tumbling in Tuesday’s extended session after the cybersecurity company came up short with its forecasts for the current quarter and trimmed its full-year revenue outlook.
The company models fiscal third-quarter revenue of $1.95 billion to $1.98 billion along with $2.30 billion to $2.35 billion in billings, a metric that takes into account deferred revenue. The FactSet consensus was for $2.04 billion in revenue and $2.62 billion in billings.
Palo Alto Networks
PANW,
also projects $1.24 to $1.26 in adjusted earnings per share, while analysts were expecting $1.29.
The stock was down 14% in after-hours trading Tuesday.
The company also took down its full-year forecast, which now calls for $10.1 billion to $10.2 billion in total billings as well as $7.95 billion to $8.00 billion in total revenue. Palo Alto Network’s earlier forecast was for $10.7 billion to $10.8 billion in billings and $8.15 billion to $8.20 billion in total revenue.
Chief Financial Officer Dipak Golechha said in a release that Palo Alto Networks was maintaining its free-cash-flow and adjusted EPS forecasts, “while making significant additional investments in our platformization and consolidation strategies to accelerate our long-term growth trajectory.”
For the fiscal second quarter, Palo Alto Networks brought in $1.98 billion in revenue, up from $1.66 billion a year before. Analysts were modeling $1.97 billion.
Net income was $1.75 billion, or $4.89 a share, compared with $84 million, or 25 cents a share, in the year-before period. GAAP net income for the latest quarter included a $1.5 billion net tax benefit related to the release of the company’s valuation allowance.
On an adjusted basis, Palo Alto Networks earned $1.46 a share, whereas analysts were projecting $1.30 a share.
