(Bloomberg) — Cybersecurity firm Palo Alto Networks Inc. After forecasting stronger bills for the year than Wall Street expected, easing concerns that slowing demand could affect results.
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The company expects billings for the fiscal year to range from $10.9 billion to $11 billion, compared to the average analyst estimate of $10.8 billion. However, the company’s quarterly and annual revenue forecasts fell short of analysts’ estimates.
The Palo Alto outlook is a potential bright spot for the cybersecurity industry. Companies such as Fortinet Inc. and Check Point Software Technologies Ltd. had reported earnings pointing to a slowdown across the space, hit by a broader slump in technology spending and a shaky economy.
“The company’s strategy resonates with a growing number of our customers, which is driving continued consolidation,” Palo Alto CEO Niksh Arora said in a statement. He also noted that the Santa Clara, California-based company was “thrilled” at the reception of its AI-based security platform.
The stock was up 10% at $228.29 in late trading as of 4:30pm New York time.
In a departure from the company’s usual deadlines, the results came in after the closing bell on Friday, fueling speculation that the outlook may not be as promising. The stock has fallen about 20% since that announcement, with “pure fear” spreading among investors.
At the top of the earnings call, Arora apologized for what he said was the company’s “unique concern” about its decision to hold its earnings call late Friday afternoon, saying it was due to its desire to give enough time to one-on-one conversations with Analysts ahead of the start of the sales conference on Sunday.
Total revenue for the fiscal fourth quarter was $1.95 billion, just short of analyst estimates of $1.96 billion.
Arora argued that the cybersecurity industry needs to shift more to solutions that can stop attacks in real time rather than the four to six days he said it takes now.
“This is not acceptable,” he said. “This thing should be down to minutes.” Arora cited one reason for the acceleration of cyber-resolves: a new rule by the US Securities and Exchange Commission that would require publicly listed companies to disclose cyber breaches within four days of determining they are material.
He said AI, which can help deliver such autonomous solutions in real time, will require more investment, but added that it has a “dark side” that the industry needs to address to prevent abuse. He said Palo Alto Networks has “quadrupled” to make sure accurate AI is deployed in every product.
(Updates with additional information begin in the eighth paragraph. An earlier version of the story was corrected to reflect that forecast for the full year in the second paragraph.)
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