Over the last few years, the company experienced rapid growth and increased demand for its products and subscriptions. The company expects its employee headcount to continue growing over the next year. Palo Alto anticipates that its operating expenses will continue to increase in the foreseeable future as it continues to grow business.
To manage future growth effectively, the company is likely to improve and expand IT and financial infrastructure, operating and administrative systems and controls, and its ability to manage headcount, capital, and processes in an efficient manner.
Analysts expect the company’s earnings to jump by 10.90% to $1.42 per share and revenue will climb by 21.90% to $802.23 million for the fourth quarter. The company has surprised investors by beating analysts’ expectations in all of the past four quarters.
For the third quarter, Palo Alto Networks reported a narrower loss helped by a 28% jump in revenues. The company believes the addition of Twistlock and PureSec will help protect its customers’ journey to the cloud and will strengthen its Prisma cloud security strategy. The company introduced a new cloud security suite Prisma during the quarter.
For the fourth quarter, the company expects total revenue in the range of $795 million to $805 million, representing year-over-year growth of 21% to 22% on an ASC 606 basis. Adjusted earnings are anticipated to be in the range of $1.41 to $1.42 per share. The earnings guidance includes the impact of about $15 million in net expense related to a full quarter of the Demisto acquisition as well as the proposed acquisitions of Twistlock and PureSec.