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Palo Alto forecasts annual results above estimates on cybersecurity demand

Economic Times · 4m

Palo Alto Networks has announced fiscal 2025 revenue and profit forecasts that exceed Wall Street estimates, highlighting increased demand for its cybersecurity products. The company's shares rose by approximately 2% after the announcement and included an additional $500 million for share repurchases. However, CEO Nikesh Arora noted that recent global IT outages have caused some customers to reconsider their options. Demand for cybersecurity products has grown due to the rise in online threats, but analysts have expressed concerns about reliance on a single vendor, as demonstrated by a recent outage linked to CrowdStrike's software update. Palo Alto will now use next-generation security annual recurring revenue as its primary financial metric for revenue projections. The company predicts annual revenue between $9.10 billion and $9.15 billion, with an adjusted profit per share between $6.18 and $6.31 for fiscal 2025. Its fourth-quarter revenue reached $2.19 billion, surpassing expectations of $2.16 billion. Rival company Fortinet also recently raised its annual revenue forecast.