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Cybersecurity provider Palo Alto Networks (NASDAQ:PANW) announced better-than-expected revenue in Q1 CY2025, with sales up 15.3% year on year to $2.29 billion. The company expects next quarter’s revenue to be around $2.5 billion, close to analysts’ estimates. Its non-GAAP profit of $0.80 per share was 3.6% above analysts’ consensus estimates.

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Palo Alto Networks (PANW) Q1 CY2025 Highlights:

• Revenue: $2.29 billion vs analyst estimates of $2.28 billion (15.3% year-on-year growth, 0.5% beat)

• Adjusted EPS: $0.80 vs analyst estimates of $0.77 (3.6% beat)

• Adjusted Operating Income: $627.1 million vs analyst estimates of $617.2 million (27.4% margin, 1.6% beat)

• Revenue Guidance for Q2 CY2025 is $2.5 billion at the midpoint, roughly in line with what analysts were expecting

• Management raised its full-year Adjusted EPS guidance to $3.27 at the midpoint, a 1.9% increase

• Operating Margin: 9.6%, in line with the same quarter last year

• Market Capitalization: $128.6 billion

"In Q3, we continued to make progress on our platformization strategy and achieved an important milestone in crossing $5 billion in Next-Gen Security ARR," said Nikesh Arora, chairman and CEO of Palo Alto Networks.

Company Overview

Founded in 2005 by cybersecurity engineer Nir Zuk, Palo Alto Networks (NASDAQ:PANW) makes hardware and software cybersecurity products that protect companies from cyberattacks, breaches, and malware threats.

Sales Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last three years, Palo Alto Networks grew its sales at a 19.7% compounded annual growth rate. Although this growth is acceptable on an absolute basis, it fell slightly short of our standards for the software sector, which enjoys a number of secular tailwinds.

This quarter, Palo Alto Networks reported year-on-year revenue growth of 15.3%, and its $2.29 billion of revenue exceeded Wall Street’s estimates by 0.5%. Company management is currently guiding for a 14.2% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 14.2% over the next 12 months, a deceleration versus the last three years. Still, this projection is healthy and indicates the market is forecasting success for its products and services.

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