Palo Alto Networks Beats Estimates, Announces Stock Split

• Palo Alto Networks reported better revenue and profit than expected for the first quarter of fiscal 2025.

• The cybersecurity company has raised its expectations for full-year revenue and adjusted earnings per share (EPS).

• Palo Alto Networks also said it will undergo a 2-for-1 stock split next month.

Palo Alto Networks (PANW) posted better-than-expected results for the first quarter of fiscal 2025 and announced a 2-for-1 stock split after the call Wednesday.

The cybersecurity company reported revenue of $2.14 billion for the quarter, up from $1.88 billion a year ago and just above the $2.12 billion consensus estimate from analysts compiled by Visible Alpha. Profits of $350.7 million rose more than 80%, easily surpassing the expected $272.1 million.

Chief Executive Officer (CEO) Nikesh Arora said the company notes that its customers are realizing that its “platformization” strategy of consolidating and bundling services to drive sales is “the game changer that will solve security and enable better AI results will make possible’.

Wedbush analysts, while maintaining an “outperform” rating and a $400 price target, say they believe the company’s “platformization efforts are only just beginning to pay off as it becomes a more stable pipeline of platformization deals, with cloud penetration still acting as a key driver. moving forward.”

Palo Alto Networks also announced a stock split, making it the latest company to do so this year, joining the likes of Walmart (WMT), Chipotle Mexican Grill (CMG) and Nvidia (NVDA). Companies conduct stock splits for a variety of reasons, including making their stock price more accessible to a wider range of investors and increasing trading activity on their shares.

Palo Alto Networks will soon double its existing share count with a 2-for-1 split, meaning shareholders of record on December 12 will receive an additional share for each share they own after the market closes on December 13. of shares and the halved price will take effect on December 16.

The company also raised its full-year guidance for fiscal 2025, forecasting revenue between $9.12 billion and $9.17 billion, up from $9.10 billion to $9.15 billion previously. Adjusted earnings per share (EPS) are between $6.26 and $6.39, up from $6.18 to $6.31.

Palo Alto shares recently rose 1.4% to $398.46 on Thursday, about 35% higher than where they started the year.