Shares of Palo Alto Networks jumped nearly 10 percent in after-hours trading after the cybersecurity giant reported new quarterly numbers that exceeded analysts’ already high expectations and after disclosing it planned to acquire application security startup Cider Security.
Santa Clara, Calif-based Palo Alto Networks reported Thursday that its fiscal first-quarter revenue increased 25 percent to $1.6 billion compared with the same period last year. The company’s total billings increased 27 percent to $1.7 billion compared with the same period last year.
GAAP net income for the fiscal first quarter 2023 was $20 million compared with a loss of $103 million in the same period last fiscal year. Those and other numbers exceeded most analysts’ quarterly targets.
Palo Alto Networks shares increased 9.5 percent to about $171 in after-hours trading.
Nikesh Arora, chairman and CEO of Palo Alto Networks, said on the company’s earnings call Thursday that customers continued to increase their commitment to the company’s security offerings during the quarter, even though it did see some “customer behavior” changes due to uncertain economic times.
“We do see some marginal signs of impact,” he said. “Cybersecurity deals are getting more scrutiny, suggesting deeper [and] longer reviews of transformational projects. … While some deals have been sized down or broken into phases, we are experiencing few deal cancellations.”
Cybersecurity spending remains “resilient,” Arora said, and he reiterated his previous projection that industry growth moving forward will be in the 8 percent to 10 percent range.
As for the planned acquisition of Tel Aviv, Israel-based Cider Security, Palo Alto Networks said in a press release late Thursday that the price will be “approximately $195 million in cash,” excluding the value of replacement equity awards that are “subject to adjustment.” The deal is expected to close by Jan. 31, 2023.
According to Palo Alto Networks, the acquisition will support the company’s Prisma Cloud platform approach to “securing the entire application security life cycle from code to cloud.”
Lee Klarich, chief product officer at Palo Alto Networks, said in the release that Cider Security’s technology was first-rate.
“Any organization using public cloud has an application infrastructure with hundreds of tools and applications that can access their code and yet they have limited visibility to their configuration or if they are secured,” said Klarich.
“Cider has made it possible to connect into infrastructure, analyze the tools and identify the risks, as well as how to remediate them. We are acquiring Cider for their innovation that will help enable Prisma Cloud to provide this capability that anyone doing cloud operations has to have.”
Guy Flechter, CEO of 100-employee Cider Security, said in a release that the company’s platform technology allows software “engineering to continue to move fast, without making compromises on security.”
“It’s only fitting that we join Palo Alto Networks, a company built upon landmark cybersecurity ‘firsts,’” he said. “There couldn’t be a better fit for Cider. … By scanning and securing the CI/CD pipeline, we can help identify where there may be vulnerabilities in your code. Prisma Cloud will now be the ultimate solution for code-to-cloud security.”