- Cyber firm smashes forecasts in Q3

- Q4 also guided to beat consensus

- Stock had slumped more than 20% year to date before update

US cyber security giant Palo Alto Networks (PANW:NASDAQ) jumped more than 11% in after-hours trading overnight after the California-based firm’s third quarter smashed Wall Street expectations.

Q3 results showed earnings per share of $1.79, well above the $1.68 estimate, on a 29% year-on-year revenue surge to $1.4 billion, beating the Street estimate of $1.36 billion. Q3 billings increased 40% year-on-year to $1.8 billion.

‘We saw strong top-line growth in Q3, which is a testament to our teams’ consistent execution in capitalizing on the strong cybersecurity demand trends,’ said Nikesh Arora, chairman and CEO of Palo Alto.

‘On the back of this strength across our portfolio, we are again raising our guidance for the year across revenue, billings and earnings per share.’

Q4 EXPECTED TO COMFORTABLY BEAT CONSENSUS

The company now anticipates Q4 2022 EPS in the range of $2.26 to $2.29, compared to the consensus of $2.22, and revenue in the range of $1.53 billion to $1.55 billion, compared to the consensus of $1.53 billion. That implies a 2022 full year (to 30 June) outcome of diluted EPS of $7.43 to $7.46 on $5.48 billion to $5.5 billion revenue.

The 2022 consensus had been pitched $5.46 billion revenue and $7.29 EPS.

Like most growth companies, Palo Alto shares have struggled this year, losing around 20% to $436.37 before today’s expected rally. Pre-market trades imply a share price of $486 when trading re-starts later today.

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Issue Date: 20 May 2022