Palo Alto Networks Shares Trade Up 18.5% on Q4 Earnings and Positive FY Revenue Outlook

Source: Streetwise Reports   08/24/2021

Palo Alto Networks shares reached a new 52-week high after the company reported that Q4/21 revenues increased 28% YoY. The company expects the trend to continue and is now anticipating that billings in FY/22 will increase by 21-22% to $6.60-6.65 billion.

After the close of U.S. markets for trading yesterday afternoon, global cloud-centric cybersecurity provider Palo Alto Networks Inc. (PANW:NYSE) has announced its fourth quarter and full-year 2021 financial results for the period ended July 31, 2021.

Palo Alto Networks advised that billing in Q4/21increased by 34% year-over-year to $1.9 billion and FY/21 billings rose to $5.5 billion. The company added that deferred revenue grew 32% YoY in FY/21 to $5.0 billion, while remaining performance obligations increased 36% YoY to $5.9 billion.

The company reported that total revenue in Q4/21 increased by 28% to $1.219 billion, compared to $950.4 million in Q4/20.

Palo Alto Networks stated that in Q4/21 it posted a GAAP net loss of $119.3 million, or a loss of $1.23 per diluted share, versus a GAAP net loss of $58.9 million, or a loss of $0.61 per diluted share in Q4/20. The firm added that on a non-GAAP basis, it posted net income in Q4/21 of $161.9 million, or $1.60 per diluted share, compared to non-GAAP net income of $144.9 million, or $1.48 per diluted share in Q4/20.

The company added that for FY/21 total revenue grew by 25% to $4.256 billion, compared to $3.408 billion during FY/20.

The firm listed that for FY/21 it posted a GAAP net loss of $498.9 million, of a loss of $5.18 per diluted share, compared to a GAAP net loss of $267 million, or a loss of $2.76 per diluted share for FY/20. The company indicated additionally in the report that on a non-GAAP basis, it posted net income of $6,137 million, or $6.14 per diluted share, versus non-GAAP net income of $484.6 million, or $4.88 per diluted share during FY/20.

Palo Alto Network’s Chairman and CEO Nikesh Arora commented, “Our strong Q4 performance was the culmination of executing on our strategy throughout the year, including product innovation, platform integration, business model transformation, and investments in our go-to-market organization…In particular, we saw notable strength in large customer transactions with strategic commitments across our Strata, Prisma, and Cortex platforms.”

The company’s CFO Dipak Golechha stated, “We are pleased to deliver strength across all the key total shareholder return drivers — top line, operating margin, and free cash flow conversion…We look forward to updating investors on our long-term goals at our upcoming analyst day on September 13th”.

Palo Alto provided some forward guidance and advised that for Q1/22, it expects that total billings will increase between 19-21% to a range of $1.29-$1.31 billion. The company stated that it expects total revenue of $1.19-1.21 billion in Q1/22, which represents a 26-28% increase versus Q1/21. The firm added that based on an estimated 101-103 million shares outstanding, it expects to earn diluted non-GAAP net income $1.55-1.58 per share.

For FY/22, Palo Alto anticipates that total billings will be in the range of $6.60-6.65 billion, which it stated would represent a 21-22% YoY increase. Total revenue is expected to increase by 24-25% YoY to between $5.275-5.325 billion. The firm added that based on an estimated 104 to 106 million shares outstanding, it expects to earn diluted non-GAAP net income $7.15-7.25 per share

The company mentioned that following the end of Q4/21, the company’s Board of Directors authorized an additional $676.1 million in share repurchase. The firm noted that this raises the total dollar amount of shares that the company can repurchase to $1.0 billion.

Palo Alto Networks claimed that it is “the global cybersecurity leader that is shaping the cloud-centric future with technology that is transforming the way people and organizations operate.” The company listed that its products and platform employ artificial intelligence, automation, analytics, and orchestration to address the world’s greatest security challenges. The firm’s products and services protect tens of thousands of companies’ and organizations’ networks, mobile devices, and cloud storage.

Palo Alto Networks began the day with a market cap of around $36.3 billion with approximately 97.39 million shares outstanding and a short interest of about 5.2%. PANW shares opened almost 14% higher today at $423.65 (+$51.08, +13.71%) over yesterday’s $372.57 closing price and reached a new 52-week high price this morning of $446.9093. The stock traded today between $419.40 and $446.9093 per share and closed at $441.87 (+$69.30, +18.60%).

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