Palo Alto Networks Q1 Tops View; Shares Surge - Update

(RTTNews) - Network security software maker Palo Alto Networks Inc. (PANW), Monday reported a first-quarter loss that widened from a year ago, hurt mainly by higher expenses notwithstanding a surge in revenues.

Nevertheless, adjusted profit for the quarter nearly doubled from last year, beating Street expectations by a penny, as revenues soared 49 percent. Following the news, shares of Palo Alto Networks rallied eight percent in the extended trading hours.

Santa Clara, California-based Palo Alto's first-quarter loss widened to $7.86 million or $0.11 per share from $3.52 million or $0.05 per share last year.

On an adjusted basis, earnings for the period rose to $0.08 per share from $0.05 per share last year. On average, 24 analysts polled by Thomson Reuters expected earnings of $0.07 per share for the quarter. Analysts' estimates typically exclude special items.

Palo Alto, which provides network security technologies, said revenues for the first quarter grew 49 percent to $128.18 million from $85.93 million last year. Twenty-one analysts had a consensus revenue estimate of $120.80 million for the quarter.

Product revenues for the quarter grew to $75.5 million from $55.5 million, while subscription and services revenue grew 73 percent year-over-year to $52.7 million.

Operating expenses for the quarter rose to $101.4 million from $64.9 million a year ago.

Commenting on the results, CFO Steffan Tomlinson said, "Strong product revenue growth was complemented by 73 percent year-over-year growth of our recurring subscriptions and services revenue. The rapid growth of our SaaS recurring revenue stream is a testament to the power of our hybrid business model and was a major driver of record deferred revenue, which increased by 74 percent year-over-year."

PANW closed Monday's trading at $46.10, up $0.80 or 1.77%, on the NYSE. The stock further gained $3.90 or 8.46% in after hours trade.