Seeking Alpha

Palo Alto issues healthy revenue guidance; shares +10.1% AH

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).

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Comments (2)
  • wil3714
    , contributor
    Comments (2214) | Send Message
    Rev nice jump but that spend it very high, pay to grow.
    29 May 2014, 02:28 AM Reply Like
  • Ta0
    , contributor
    Comments (485) | Send Message
    They are very close to doing $1B per year in sales. They still have lots of room to run.
    29 May 2014, 08:23 PM Reply Like
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