The cybersecurity giant saw a jump in its shares Friday following its latest quarterly financial report — recovering some of the losses that followed Fortinet’s disappointing results from early August.
Palo Alto Networks saw a resurgence in its stock price Friday after the release of its latest quarterly financial report, which revealed strong growth in several of its newer businesses including secure access service edge (SASE) and AI-powered security operations.
The report for Palo Alto Networks’ fiscal fourth quarter, ended July 31, ultimately proved to be better than some on Wall Street had previously feared in the wake of Fortinet’s disappointing results from early August. Palo Alto Networks’ stock price jumped 10.8 percent in after-hours trading Friday to $232.29 a share.
The share price increase reversed much of the lost market value for Palo Alto Networks that had followed the Aug. 3 report from competitor Fortinet. Both companies saw share price declines amid concerns of a broader slowdown among top cybersecurity vendors.
Overall, Palo Alto Networks reported $1.95 billion in revenue for its fiscal Q4, up 26 percent year-over-year. While that came in just shy of analyst expectations, the company beat Wall Street expectations on earnings — with non-GAAP net income of $1.44 per diluted share — and also increased its earnings guidance for its full fiscal year 2024.
Strong sales of the company’s Prisma SASE platform and Cortex XSIAM security operations platform were among the highlights of the fiscal Q4 results, Palo Alto Networks CEO Nikesh Arora said during the company’s quarterly call with analysts Friday.
“SASE continues to become our standout offering,” Arora said, pointing to the more than $1 billion in SASE bookings generated during the company’s full fiscal year 2023.
Demand for SASE has been surging as businesses turn to the technology to help provide distributed workforces with secure access to corporate applications and resources.
Palo Alto Networks was the sole vendor chosen to appear in the “leaders” quadrant for Gartner’s first-ever Magic Quadrant for Single-Vendor SASE, which was published Wednesday. Gartner analysts cited the “strong” functionality, large customer base and well-planned product roadmap for the company’s Prisma SASE platform.
Meanwhile, with its XSIAM (extended security intelligence and automation management) platform, Arora noted that the original “aggressive goal” was to generate more than $100 million in the first year of the AI-driven platform, which was released in October 2022.
But the XSIAM offering has already generated $200 million as of the end of the latest quarter, and “the year is not over yet,” he said.
“This is strong validation that our outcome-based value proposition [with] XSIAM is resonating well with security organizations — and also a sign that interest in applying AI to transform security operations is very high,” Arora said.
In a recent interview with CRN, Arora said Palo Alto Networks is finding significant traction for its consolidated platform approach, which seeks to provide customers with an array of best-of-breed cybersecurity tools “in an integrated fashion.”
The Palo Alto Networks platform offers security capabilities spanning from cloud and applications, to SASE and zero trust, to AI-powered threat detection and security operations.
“Today, we’re leaders in north of 14 categories in cybersecurity. We’re in the leadership quadrant for SD-WAN, for SASE, for network firewalls, for cloud security,” Arora said in the interview with CRN in July. “So we can go [to customers] and say, ‘Listen, you want to buy best-of-breed in the top right corner of any quadrant? We’ve got it.’ Plus, on top of that, we’ll give it to them in such a way that they work together.”
The industry is still in the “early stages of this transformation,” he noted. However, there are now many customers who are “beginning to think about a long-term cybersecurity strategy [and] starting to build longer-term cybersecurity architectures to create this integrated platform, which gives a better outcome,” Arora told CRN.