Why did Palo Alto Networks shares fall?

Palo Alto Networks shares fell more than 5% in extended trading after the company released a forecast for adjusted earnings that was weaker than anticipated.

What is Palo Alto Networks' updated revenue forecast?

The company expects full-year revenue of $11.28 billion to $11.31 billion, beating Wall Street estimates.

What is the significance of Palo Alto Networks acquiring Koi?

Palo Alto Networks acquired Koi, an Israeli cybersecurity firm, to provide better visibility into threats against AI software.

Home / Business and Economy / Palo Alto Networks Slashes Earnings Forecast, Shares Tumble

Palo Alto Networks Slashes Earnings Forecast, Shares Tumble

18 Feb

Summary

Company shares dropped over 5% in after-hours trading.
Full-year revenue forecast exceeds analyst expectations.
Acquisition of Israeli firm Koi aims to boost AI security visibility.

Palo Alto Networks Slashes Earnings Forecast, Shares Tumble

Palo Alto Networks Inc. saw its shares decline more than 5% in extended trading after issuing a subdued adjusted earnings forecast for the year. The cybersecurity firm adjusted its full-year earnings per share projection to a range of $3.65 to $3.70.

For the third quarter, the company projected adjusted earnings per share between 78 cents and 80 cents. This comes after reporting second-quarter adjusted earnings per share of $1.03, surpassing analyst expectations of 94 cents.

The company also revised its revenue outlook, now anticipating full-year revenue between $11.28 billion and $11.31 billion, surpassing the $10.5 billion estimated by Wall Street.

In a strategic move to bolster its AI security capabilities, Palo Alto Networks announced the acquisition of Koi, an Israeli cybersecurity firm. This acquisition is intended to provide enhanced visibility into threats targeting AI software, although terms of the deal were not disclosed.

CEO Nikesh Arora highlighted the accelerating trend of platformization driven by AI and the strong adoption of AI security, expecting these to be long-term drivers. The company's strategy focuses on consolidating cybersecurity solutions, replacing point products with integrated offerings in cloud security, end-point protection, and security operations.

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