Palo Alto Networks Surges After Billings Outlook Beats Estimates

(Bloomberg) -- Cybersecurity firm Palo Alto Networks Inc. surged after projecting stronger billings for the year than Wall Street anticipated, easing fears that a slowdown in demand may weigh on results.

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The company sees billings for the fiscal year ranging from $10.9 billion to $11 billion, compared with an average analyst estimate of $10.8 billion. Still, the firm’s quarterly and annual revenue outlooks came in below analysts’ estimates.

Palo Alto’s outlook is a potential bright spot for the cybersecurity industry. Companies such as Fortinet Inc. and Check Point Software Technologies Ltd. had been reporting earnings that pointed to a slowdown across the space, hurt by a broader pullback in tech spending and a shaky economy.

Palo Alto Chief Executive Officer Nikesh Arora said in a statement that the company’s “strategy is resonating with a growing number of our customers, driving continued consolidation.” He also noted that the Santa Clara, California-based company was “pleased” with the reception for its artificial-intelligence-based security platform.

The stock was up 10% at $228.29 in late trading as of 4:30 p.m. New York time.

In a departure from the company’s usual timings, the results came after the closing bell Friday, prompting speculation that the forecast might not be promising. The stock had fallen around 20% since that announcement, as “pure fear” spread through investors.

At the top of the earnings call, Arora apologized for what he said was the “unique attention” the company had drawn over its decision to hold its earnings call late on Friday afternoon, saying it was due to wanting to give ample time for one-on-one conversations with analysts before a sales conference starts on Sunday.