Palo Alto Networks, Inc. (NYSE: PANW) reported its fiscal first quarter financial results after the markets closed on Monday. The company had $0.35 in earnings per share (EPS) on $297.2 million in revenue compared to consensus estimates from Thomson Reuters that call for $0.32 in EPS on $284.40 million in revenue. The same period from the previous year had $0.15 in EPS on $192.35 million in revenue.
Total revenue for the fiscal first quarter grew 55% from the previous year to a record level.
During this quarter, the company introduced Aperture which is a new security-as-a-service (SaaS) offering that helps organizations safely enable and strengthen security for sanctioned SaaS applications, such as Box, Dropbox, Google Drive, and Salesforce.
In terms of guidance the company expects EPS in the range of $0.38 to $0.39 and total revenue in the range of $314 to $318 million in the fiscal second quarter. The consensus estimates call for $0.38 in EPS on $310.58 million in revenue.
Mark McLaughlin, President and CEO of Palo Alto Networks, commented on earnings:
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. We believe that our success is due to our unwavering commitment to solving our customers’ most complex security challenges with the industry’s most innovative technology. Security remains a strategic consideration for companies globally, and it is clear from our results that our natively integrated and automated next-generation platform is resonating very well as the long-term strategic answer for customers’ security needs.
Steffan Tomlinson, CFO, added:
We reported record revenue in the fiscal first quarter as robust new customer acquisition and expansion within our existing customer base drove strong demand for our appliances and subscription services. As the business scales, the power of our hybrid-SaaS model is becoming increasingly evident. Deferred revenue grew 71 percent year-over-year to $804.5 million, and we improved non-GAAP operating leverage both sequentially and year-over-year. This resulted in cash flow from operations of $146.7 million and free cash flow of $127.2 million.
On the books, cash, equivalents, and short-term investments totaled $761.3 million compared to $789.0 at the end of the previous fiscal year.
Shares of Palo Alto closed Monday up 6% at $172.02, with a consensus analyst price target of $201.63 and a 52-week trading range of $110.53 to $200.55. Following the release of the earnings report, shares of Palo Alto were initially down 0.3% at $171.50 in the after-hours trading session.
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