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It has been about a month since the last earnings report for Palo Alto Networks (PANW). Shares have added about 4.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Palo Alto due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Palo Alto Networks Reports Q1 Results
Palo Alto Networks delivered first-quarter fiscal 2019 non-GAAP earnings of $1.17 per share, which not only improved 56% on a year-over-year basis but also surpassed the Zacks Consensus Estimate of $1.05.
Palo Alto’s revenues of $656 million surged 31% year over year, outpacing the Zacks Consensus Estimate of $632 million.
The impressive results were mainly driven by a healthy demand environment, product strength and an increasing adoption of the company’s next-generation security platforms.
Management is optimistic about the consistent spending on security, which is backed by a large-scale upgrade in IT infrastructure and transition to cloud.
Quarterly Details
Product revenues increased approximately 30% to $240.5 million. The company witnessed a 31% jump in subscription and support revenues to $415.5 million. SaaS-based subscription revenues rose 37% from the year-ago period to $231.3 million. Support revenues increased 24% year over year to $415.5 million.
Billings improved 27% year over year to $758.5 million.
Geographically, revenues from the Americas climbed 29% on a year-over-year basis. The figures from Europe, the Middle East and Africa (EMEA) and Asia Pacific were up 35%, each.
Management mentioned that the company’s first speedboat in cloud security has been launched and is off to a good start. Its GlobalProtect cloud offering also recorded success with some of the large players during the reported quarter.
During the quarter under review, the company witnessed solid growth in customer acquisition and also expanded its wallet share with the existing clientele. It is also doing well in the federal space. With WildFire achieving Federal Risk and Authorization Management Program or FedRAMP and Ready status, the company will now be able to provide the advanced threat prevention and analysis capabilities to U.S. federal agencies.
Management announced that the company is also launching a product to cater to the needs of service providers, who are facing a major transformation from 4G to 5G. The company anticipates the same to be available in early 2019.