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Palo Alto Networks Stock Rises 4% after Fiscal 1Q16 Earnings

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Palo Alto makes use of cloud

Palo Alto Networks (PANW), a cybersecurity solutions provider, announced its fiscal 1Q16 earnings on November 23, 2015. Market reaction remained positive, and investors drove Palo Alto Networks stock up by 4.0% in after-hours trading.

Palo Alto Networks reported revenue of $297.2 million compared to $192.3 million in fiscal 1Q15, an increase of 54.6%. Revenue generated from products and services came in at $147.7 million and $149.5 million, respectively, compared to $101.5 million and $90.8 million, respectively, in fiscal 1Q15.

Revenue generated from products showed a decline of 4.2% compared to fiscal 1Q15. The sequential decline came due to a limited range of products offered by the company.

Revenue from recurring services such as SaaS- (Software-as-a-Service) based subscription revenue came in at $73.6 million, an increase of 69% YoY (year-over-year). Support and maintenance generated $75.9 million, an increase of 61% YoY.

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Revenue growth declines for EMEA and APAC

If we break down the revenue further on a regional basis, revenue generated from the Americas grew 70% in fiscal 1Q16 compared to 60% in fiscal 1Q15. Growth from EMEA (Europe, the Middle East, and Africa) and APAC (Asia-Pacific) was sluggish at 18% and 11%, respectively, in fiscal 1Q16 compared to 40% and 46%, respectively, in fiscal 1Q15.

Palo Alto Networks has introduced a new SaaS model to offer enterprises strengthening security for sanctioned SaaS applications such as Box, DropBox, Google Drive, and Salesforce. This service will provide real-time correlation and relevance for threats across their large and growing customer bases. Palo Alto Networks plans to deliver next-generation security for its customers, regardless of application deployment models such as Private, Public, Hybrid, and Community clouds.

Mark McLaughlin, president and CEO (chief executive officer) of Palo Alto Networks, said, “We had a very strong start to fiscal year 2016 that included achieving our highest fiscal first quarter revenue and billings year-over-year growth rates since going public.”

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