Cybersecurity firm Palo Alto Networks (NYSE: PANW) reported third quarter 2019 results after the bell today. The company beat Wall Street’s estimates by reporting earnings of $1.31 per share on revenue of $726.6 million. Analysts had estimated Palo Alto to earn $1.25 per share on revenue of $704.05 million for the quarter ended April 31, 2019.
The company had projected Q3 revenue to be in the range of $697 to $707 million and non-GAAP earnings per share in the range of $1.23 to $1.25. Shares of Palo Alto Networks dropped about 4% during the extended horus of trading on weaker-than-expected guidance.
For the fourth quarter of fiscal 2019, revenue is expected to be in the range of $795 million to $805 million, representing year-over-year growth of 21% to 22% on an ASC 606 basis. Non-GAAP earnings per share is touted to be in the range of $1.41 to $1.42 on an ASC 606 basis.
GAAP net loss for the fiscal third quarter 2019 was $20.2 million or $0.21 per share compared with GAAP net loss of $40.4 million or $0.44 per share in the prior year quarter. Product revenue grew 27% annually to $276.4 million and revenue from subscription and support segment grew 28% to $448 million.
Palo Alto Networks introduced a new cloud security suite Prisma today. Prisma contains four key components, including Prisma Access, Prisma Public Cloud, Prisma SaaS and VM-Series.
Palo Alto also announced that it had acquired Twistlock and PureSec to strengthen its Prisma cloud security strategy. Under the agreement terms, Palo Alto will pay approximately $410 million in cash, subject to adjustments, to acquire Twistlock. The terms of PureSec deal was not disclosed.
Both of these acquisitions are expected to close during Palo Alto Networks fiscal fourth quarter, subject to the satisfaction of regulatory approvals and other customary closing conditions.
“Both Twistlock and PureSec will be important additions to helping protect our customers’ journey to the cloud. Combining their capabilities with Prisma, our leading cloud security suite, is a huge win for all of our customers,” said CEO Nikesh Arora.
The Santa Clara, California-based firm’s stock had lost 16% of its value in the past 90 days and was up by 3% in the past 52 weeks.
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