Palo Alto Networks Beats Q4 Earnings Expectations, Announces Upbeat Guidance for Fiscal First Quarter and Acquisition of CyberArk for $25 Billion

Palo Alto Networks has announced stronger-than-anticipated Q4 earnings and offered optimistic guidance for the upcoming quarter. The cybersecurity software company disclosed that Nir Zuk, its co-founder, is stepping down from his role as Chief Technology Officer (CTO).

Following the announcement, Palo Alto’s shares experienced a 6% increase in extended trading.

Here’s a comparison of the company’s performance against analyst estimates for Q4:

Revenue for the final quarter of the fiscal year increased by approximately 16%, reaching nearly $2.4 billion, according to a statement released by the company. Net income fell to around $254 million, or 36 cents per share, compared to $358 million, or 51 cents per share, during the same period last year.

For Q1 of the new fiscal year, Palo Alto expects earnings per share (EPS) to fall between 88 cents and 90 cents, surpassing an 85-cent estimate from StreetAccount.

The company’s projected revenue for the full year ranges from $10.48 billion to $10.53 billion on adjusted EPS of $3.75 to $3.85. Both estimates exceed Wall Street’s projections.

Palo Alto also anticipates that remaining purchase obligations, which track backlog, will range between $15.4 billion and $15.5 billion for Q1, surpassing a $15.07 billion estimate.

Last month, the company unveiled plans to acquire Israeli identity security provider CyberArk for approximately $25 billion—the largest deal in Palo Alto’s history. This acquisition marks the culmination of an aggressive acquiring spree that escalated after Nikesh Arora assumed the CEO role in 2018.

Initially, shares plummeted following the news and have yet to regain their previous highs. As of Monday’s close, the stock has dipped approximately 3% this year. In response to the announcement, Arora stated, “We look for great products, a team that can execute in the product, and we let them run it. This is going to be a different challenge, but our team has proven its ability 24 times, so I’m confident they can handle this.”

Lee Klarich, currently the company’s product chief, will replace Zuk as CTO and assume his position on the board.