- Palo Alto Networks (PANW) guides on its FQ3 CC (webcast) for FQ4 revenue of $158M-$162M and EPS of $0.10-$0.11 vs. a consensus of $158.4M and $0.10.
- Shares are only $4 away from a post-IPO high of $80.84 following the guidance, an FQ3 beat, and the settlement of a Juniper suit long viewed as an overhang.
- Product revenue (56% of total) rose 39% Y/Y in FQ3 vs. 30% in FQ2. Services revenue (boosted by cloud security subscriptions) rose 64% vs. 74%.
- Palo Alto added ~600 customers for its WildFire threat-protectionservice, up from ~400 in FQ2 and growing the total base to 2K+.
- Gross margin rose 80 bps Q/Q and 200 bps Y/Y to 76.1%. Sales/marketing spend remains torrid, growing to 47.2% of revenue from 45% a year ago. Total opex was 67% of revenue vs. 65.6%.
- Billings totaled $193.9M (well above revenue of $150.7M), and free cash flow was $28.4M (above net income of $8.7M).