palo alto networks Rising artificial intelligence risks drove demand for the company’s cybersecurity tools, exceeding expectations for the fiscal fourth quarter.
The stock fell about 2% in extended trading after falling 5% during regular trading.
Here’s how the company performed against LSEG’s estimates:
Earnings per share: $1.02 adjusted, 98 cents expected; Revenue: $3.41 billion, expected $3.35 billion.
The company said its revenue for the quarter was up 34% from $2.54 billion in the year-ago period. Palo Alto reported a net loss of $282 million, or 35 cents per share, down from net income of $254 million, or 36 cents per share, a year earlier.
The acceleration of AI attacks is forcing customers to build better and faster cyber defenses, CEO Nikesh Arora told CNBC. While these concerns have already changed significantly, the runway for long-term growth is still in its infancy.
“This is a long-term tailwind,” he said. “It’s not going to happen in one quarter, it’s not going to happen in two quarters. This just confirms the long-term horizon in terms of the growth rate of our business.”
The rise of sophisticated AI models like Anthropic’s Mythos has driven demand for new security tools to detect and respond to agent-based cyberattacks, and Palo Alto Networks’ stock has nearly doubled this year.
Agentic AI concerns are fueled by breaches such as: OpenAI-The Hug Face hack demonstrated that agents are increasingly capable of autonomously planning and coordinating attacks.
But Palo Alto isn’t the only place to benefit from the AI security race. Both last week cloud strike and Octa It soared on strong earnings and guidance as customers spend more on cyber tools.
Palo Alto Networks stock price chart.
Arora said Palo Alto held more than 2,000 customer information sessions, up from about 1,200 disclosed in the previous quarter. human Release of Mythos.
Palo Alto also announced the acquisition of AI startup Console to deepen its AI security offering. In just over a year, Arora has ramped up its aggressive deal drive, including spending $25 billion on identity security company CyberArk and nearly $3.4 billion on Chronosphere, making it its largest acquisition to date.
“I think of the cyber startup ecosystem as a big laboratory where people are trying different things,” Arora said, adding that if Paro’s internal approach doesn’t work, it could consider acquiring out of the space.
Palo Alto issued an upbeat outlook, predicting first-quarter sales of $3.3 billion to $3.31 billion, higher than analysts’ expectations of $3.22 billion.
For the full year, the company expects sales of $14.1 billion to $14.2 billion and adjusted EPS of $4.16 to $4.19. This beat expectations for revenue of $13.79 billion and EPS of $4.11.
