How Palo Alto Crushed Q4 Earnings

By Chris Lange Updated Jan 12, 8:35AM EST · Published Sep 1, 8:40AM EDT

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How Palo Alto Crushed Q4 Earnings — © Thinkstock

When Palo Alto Networks Inc. (NYSE: PANW) reported its fiscal fourth-quarter earnings results after the markets closed on Thursday, the firm said that it had $0.92 in earnings per share (EPS) and $509.1 million in revenue. Consensus estimates had called for $0.79 in EPS and revenue of $486.5 million.

During the quarter, the company said it added 3,000 new customers, and it reported record revenues, an increase of 27% from last year. It also delivered record deferred revenue and billings, while generating cash flow from operations of $240 million and free cash flow of $190 million.

In terms of the guidance for the fiscal first quarter, management is calling for EPS in the range of $0.67 to $0.69 and revenues between $482 million and $492 million. The consensus estimates are EPS of $0.68 and $489.76 million in revenue for the current quarter.

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On the books, Palo Alto Networks cash, cash equivalents and short-term investments totaled $1.38 billion, up from $1.29 billion in the same period from last year.

Mark McLaughlin, CEO of Palo Alto Networks, commented:

We are pleased to have ended fiscal 2017 with a record fourth quarter, including market-leading revenue growth and the highest number of new customer additions recorded in a single quarter by the company. For the fiscal year, revenue was $1.8 billion, up 28 percent year over year; our customer base grew to more than 42,500; and we delivered the largest product and features launch in our history. Also, Steffan Tomlinson, our chief financial officer, has informed me of his intent to retire from his position. I would like to thank Steffan for his contributions to Palo Alto Networks and his leadership role in guiding the company through a period of tremendous growth and market share gains. We are initiating a search for his replacement, and Steffan will remain in his current position until the search is completed.

Shares of Palo Alto Networks closed Thursday at $132.69, with a consensus analyst price target of $150.58 and a 52-week range of $107.31 to $165.69. They were up about 8% at $143.74 in early trading indications Friday.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.