Palo Alto Networks’ fiscal 2Q16 results beat analyst expectations
Palo Alto Networks (PANW) is the latest company to announce its earnings in this earnings season. Splunk (SPLK) and Salesforce.com (CRM) already posted earnings. All three companies managed to beat analysts’ expectations.
On February 26, 2016, Palo Alto Networks posted fiscal 2Q16 revenues earlier than scheduled. It posted non-GAAP (generally accepted accounting principles) EPS (earnings per share) of $334.7 million and $0.40, respectively. These beat analyst expectations by $16.4 million and $0.01, respectively.
On a YoY (year-over-year) basis, Palo Alto Networks’ fiscal 2Q16 revenues of $334.7 million rose 54%. However, despite double-digit revenue growth, on a GAAP basis, the company reported a loss of $62.5 million in 2Q16.
Operating segments’ performance and growth
Palo Alto Networks provides next-generation firewalls for servers, the cloud, mobile devices, and other physical and virtual workstations. In fiscal 2Q16, Palo Alto’s services revenue and product revenue stood at $164.8 million and $169.9 million, respectively. They rose ~60% and 47%, respectively, on aYoY (year-over-year) basis.
As the above chart shows, half of PANW’s revenues come from recurring services. Within services revenue, SaaS (Software as a Service) subscription revenue contributed $84.3 million, an increase of 68% on a YoY basis. Support and maintenance revenue, which is the second component of recurring services, rose 55% to $80.5 million.
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