Cybersecurity firm Palo Alto Networks Inc. (NYSE: PANW) reported higher earnings and revenues for the fourth quarter of 2019. The results also exceeded Wall Street’s prediction. The company’s stock lost sharply soon after the announcement on Wednesday evening. Palo Alto also agreed to acquire IoT security company Zingbox for $75 million.
Adjusted earnings rose to $1.47 per share from $1.34 per share in the fourth quarter of 2018, and came above the market’s prediction. On an unadjusted basis, the company reported a net loss of $20.8 million or $0.22 per share, compared to a profit of $7 million or $0.07 per share last year.
Billings up 22%
The bottom-line benefitted from a 22% growth in revenues to $805.8 million. Analysts were looking for slower top-line growth. Total billings grew 22% annually to $1.1 billion, crossing the billion-mark for the first time.
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“We had a strong fourth quarter, surpassing a billion dollars in billings within the quarter for the first time, and achieving approximately 180% year-over-year growth in our newer Prisma and Cortex offerings. This year we acquired and released important new technologies and built a robust go-to-market framework for driving their success in the market,” said Nikesh Arora, CEO of Palo Alto.
Zingbox Acquisition
In a separate statement, the company said it agreed to acquire Zingbox, an IoT security company, for $75 million in cash. The deal, which is part of the management’s strategy of extending the platforms, is expected to close in the first quarter of 2020. The company expects to optimize the delivery of its IoT security services by leveraging Zingbox’s cloud-based service and advanced AI/machine learning technology.
Stock Performance
Palo Alto’s shares gained 56% since the beginning of the year, recovering steadily from the lows seen in the final months of last year. Over the past twelve months, the stock lost about 12%. It dropped sharply during Wednesday’s extended trading, after closing the regular session higher.