Palo Alto Networks revealed mixed results and expectations after it released its quarter year reports with lower-than-expected revenue numbers and downgrade in expectations.
Palo Alto Networks is an enterprise and network cyber security company which is based in Santa Clara, California and was founded in 2005.
According to analysts, the company had surpassing market estimates for its quarter results for the past thirteen reports. But the streak ended this Monday following the latest report.
On Monday, Palo Alto Networks released its reports and results for the fiscal year quarter that ended on October 31.
The cybersecurity provider presented lower than estimated first quarter revenue numbers and also downgraded its present quarter expectations.
Market analysts were expecting a $400.3 million revenue number with adjusted earnings coming to 52 cents per share.
In contrast, the company announced a revenue value of $398.1 million with adjusted earnings per share number of 55 cents.
Wall Street had predicted a $166.9 million product revenue and a $233.5 million support and subscription revenue value.
Whilst the company registered a higher value for the latter revenue, coming to $234.3 million, the product revenue was lower and came to a $163.8 million number.
The Wall Street predicted the company billings for the quarter to be around $525 million. In contrast, Palo Alto Networks reported first quarter billings coming up to $516.9 million.
It also had a 33 percent year-over-year jump as opposed to the estimated 34 percent one.
Mark McLaughlin, the Palo Alto Networks CEO, stated during the ensuing conference call that the results were not as “robust” as expected.
Still, the CEO pointed out that the company has been going through a number of changes and picking up new customers.
According to McLaughlin, Palo Alto Networks has been picking up quite a number of large customers that are quite slow in coming to a purchase conclusion.
As the purchase deals feature higher numbers and a larger base, they also have longer sales cycles and periods. This would translate into a longer waiting period before seeing the first results.
The Palo alto Network representatives maintain their position and are positive of the long-term impact these higher deals will have on the company.
Steffan Tomlinson, the company CFO, revealed that during this quarter Palo Alto Networks had enlarged its user base with 1,500 new customers.
Current customers were also noted to be transitioning and moving to the Next-Generation Security Platform.
This new platform was developed so as to be able to resolve even the most complex security challenges that a customer may be facing.
The Next-Generation Security Platform is said to provide high degrees of automation, prevention, consistent security, and leverage, regardless of the nature of the data.
Following the first quarter results, Palo Alto Networks adjusted its current quarter and year estimates.
For its second fiscal quarter, the company estimates a revenue value in between $426 to $432 million.
The new year estimates were adjusted and feature a 30 to 31 percent revenue value climb and an annual product revenue increase of 12 to 13 percent.
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