Palo Alto Networks profits dips despite broad-based sales growth
2025-05-20 20:30
US
(Alliance News) - Palo Alto Networks Inc on Tuesday reported lower third quarter profits despite a double-digit rise in revenue reflecting both product and subscription and support growth.
The Santa Clara, California-based cybersecurity company said net income declined 6.3% to USD261.1 million in the three months to April 30, the financial third quarter, from USD278.8 million a year prior.
Diluted earnings per share were USD0.37 compared to USD0.39 in a year ago.
Non-GAAP net income per share improved to USD0.80 from USD0.66, ahead of USD0.77 Zacks Research consensus.
Revenue increased 16% to USD2.29 billion from USD1.98 billion, beating Zacks Research consensus of USD2.27 billion.
Product revenue rose 16% to USD452.7 million from USD391.0 million, while subscription and support sales also grew 16% to USD1.84 billion from USD1.59 billion.
"In Q3, we continued to make progress on our platformization strategy and achieved an important milestone in crossing USD5 billion in next-gen security [annual recurring revenue]," said Nikesh Arora, chair and chief executive.
Chief Financial Officer Dipak Golechha said Palo Alto looks forward to "executing against our targets as we close fiscal year 2025".
For the fourth quarter, Palo Alto expects next-generation security ARR of USD5.52 billion to USD5.57 billion, representing year-over-year growth of between 31% and 32%.
Total revenue is seen between USD2.49 billion to USD2.51 billion, representing year-over-year growth of between 14% and 15%.
Diluted non-GAAP net income per share is forecast in the range of USD0.87 to USD0.89 in the fourth quarter.
This would give full-year revenue between USD9.17 billion to USD9.19 billion, year-over-year growth of 14%, in line with consensus, and diluted non-GAAP net income per share of USD3.26 to USD3.28%.
Palo Alto shares traded 4.1% lower after hours in New York on Tuesday. They had earlier closed up 0.1% at USD194.48.
By Jeremy Cutler, Alliance News reporter
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