Shares in Palo Alto Networks (PANW) climbed on Wednesday after the cybersecurity company’s fiscal third quarter earnings beat Wall Street targets while revenue hit views. Strong customer growth for cloud-based services was a bright spot for PANW stock in the April quarter.
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Palo Alto earnings for the quarter ending April 30 rose 83% to $1.10 on an adjusted basis. Additionally, PANW stock revenue rose 24% to $1.72 billion, including acquisitions.
Analysts had expected earnings of 93 cents per share on sales of $1.72 billion.
Billings, a measure of sales growth, rose 26% to $2.3 billion, beating estimates of $2.228 billion.
Big bright spot of customer growth
“The company’s strategy continues to drive significant large deal activity, including deals over $10 million growing 136% from the prior year quarter, deals over $5 million up 62% and deals over $1 million up 29%,” William Blair analyst Jonathan Ho said in a report. He added, “There continues to be a tailwind of customers consolidating their purchases with Palo Alto’s suite of solutions.
With its roots in the “firewall” network security market, Palo Alto has built an extensive cloud-based security platform. Firewall devices protect computer networks by blocking online intrusions and monitoring web applications. Acquisitions have been a big part of Palo Alto’s strategy.
Also in the April quarter, annual recurring cloud platform product revenue increased 60% to $2.57 billion. That beat PANW stock analyst estimates of $2.51 billion.
PANW Stock: Earnings Outlook Above Views
For the current quarter ending in July, the cybersecurity company forecast Palo Alto earnings of $1.28 per share on revenue of $1.95 billion amid its outlook. Meanwhile, analysts had estimated earnings of $1.20 per share on revenue of $1.95 billion.
PANW stock rose 4.7% to 198.65 in early trading in the stock market today. Palo Alto released its results after the market closed on Tuesday.
Palo Alto stock was up 36% for 2023 through Tuesday’s market close. It is trading on a five-week flat basis with a buy point of 203.54.
Additionally, it holds a relative strength rating of 88 out of the best possible 99, according to IBD Stock Checkup.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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