We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Palo Alto Networks (PANW) Q2 Loss Widens, Revenues Miss
Read MoreHide Full Article
Continuing with its dismal performance, Palo Alto Networks Inc. (PANW - Free Report) again reported lower-than-expected second-quarter of fiscal 2017 results.
Palo Alto Networks reported adjusted loss per share (excluding amortization and other one-time items but including stock-based compensation), on a proportionate tax basis, of 58 cents. The figure was significantly wider than the Zacks Consensus Estimate of a loss of 38 cents.
The stock has gone down roughly 15.6%, underperforming the Zacks categorized IT Services industry’s gain of 17.4% in the past one year.
Quarter Details
Though Palo Alto Networks’ revenues of $422.6 million surged 26.3% year over year, it missed the Zacks Consensus Estimate of $430 million. Moreover, the quarterly revenues came below the guided range of $426 million to $432 million, primarily due to weak go-to-market execution.
Product revenues decreased a marginal 0.6% to $168.8 million. The company saw a 54% surge in subscription and support revenues ($253.8 million). SaaS-based subscription revenues climbed 59% from the year-ago period. Support revenues increased 48% year over year.
Geographically, on a year-over-year basis, revenues from the Americas increased 28% and represented 69% of total revenue. Europe, the Middle East and Africa (EMEA) went up 27%, accounting for 19% of total revenue. Asia-Pacific was up 14% and brought in the balance.
Also, customer wins coupled with expansion of the existing customer base supported quarterly revenues. Moreover, billings jumped 22% year over year to $561.6 million during the quarter.
Palo Alto Networks’ gross margin increased 130 basis points (bps) on a year-over-year basis to 71.9%, primarily backed by growth in both recurring subscription and support gross margins.
The company reported an adjusted operating loss of $42 million, which widened from a loss of $40 million suffered a year ago. GAAP operating loss during the quarter came in at $54.4 million compared with a loss of $50.1 million reported in the year-ago quarter. Higher operating expenses (up approximately 25% year over year) also impacted operating results.
The company’s non-GAAP net loss was $59.6 million, wider than a loss of $39.5 million reported last year. On a GAAP basis, net loss was $60.6 million compared with a loss of $57.3 million reported in the year-ago quarter.
Palo Alto Networks exited the second quarter with cash, cash equivalents and short-term investments of approximately $1.354 billion compared with $1.390 billion in the previous quarter.
Receivables were $386.1 million compared with $346.5 million in the last quarter. Palo Alto Networks’ balance sheet does not have any long-term debt. The company reported cash flow from operations of $214.3 million during the quarter. Free cash flow came in at $169.6 million during the quarter. During the quarter, the company repurchased 900k shares worth $132 million.
Guidance
For the third quarter of fiscal 2017, Palo Alto Networks expects revenues in a range of $406 million to $416 million, up 17% to 20% year over year. The Zacks Consensus Estimate is pegged at $453 million. The company expects non-GAAP earnings per share within 54 cents to 56 cents (excluding stock-based compensation expenses but including the impact of LightCyberacquisition).
The company continues to expect fiscal 2017 non-GAAP earnings per share in a range of $2.45 to $2.50.
Recent Activities
Palo Alto Networks recently announced the buyout of LightCyber for $105 million. The acquisition will expand the company’s Next-Generation Security Platform. We believe that this acquisition will not only increase its capabilities but the customer base as well.
Our Take
Palo Alto Networks allows firms, service providers and government bodies to impose tighter security measures through its network security platform. The company reported wider-than-expected loss in the second quarter. Revenues also missed the Zacks Consensus Estimate. The company also provided a tepid revenue guidance for the forthcoming quarter.
Nonetheless, revenue growth seems to be steady, aided by strength across all its geographical regions and business segments. Also, customer wins coupled with expansion of the existing customer base are the other positives. We believe that the company’s product refreshes and acquisitions synergies will boost revenues, going forward.
The company is also keen on expanding its cloud exposure. Nevertheless, a volatile spending environment and competition from Cisco Systems, Inc. (CSCO - Free Report) and Check Point Software Technologies Ltd. (CHKP - Free Report) remain concerns.
Seagate has a long-term expected earnings per share growth rate of 8.17%.
Everything You Need to Know About Snapchat BEFORE It Goes Public
You may be curious about the buzz surrounding Snap Inc.'s IPO on March 2. With the company expected to be valued around $22 billion, it is expected to be the largest IPO since 2014. But should you snap up this tech stock on Day 1?
In the 2017 IPO Watch List, you'll get an inside look at Snap's exciting prospects and potential challenges. You'll also learn about 4 other exciting tech companies with
jaw-dropping growth. Each could go public in the coming months.
Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the latest scoop. Download this IPO Watch List today for free >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Palo Alto Networks (PANW) Q2 Loss Widens, Revenues Miss
Continuing with its dismal performance, Palo Alto Networks Inc. (PANW - Free Report) again reported lower-than-expected second-quarter of fiscal 2017 results.
Palo Alto Networks reported adjusted loss per share (excluding amortization and other one-time items but including stock-based compensation), on a proportionate tax basis, of 58 cents. The figure was significantly wider than the Zacks Consensus Estimate of a loss of 38 cents.
The stock has gone down roughly 15.6%, underperforming the Zacks categorized IT Services industry’s gain of 17.4% in the past one year.
Quarter Details
Though Palo Alto Networks’ revenues of $422.6 million surged 26.3% year over year, it missed the Zacks Consensus Estimate of $430 million. Moreover, the quarterly revenues came below the guided range of $426 million to $432 million, primarily due to weak go-to-market execution.
Product revenues decreased a marginal 0.6% to $168.8 million. The company saw a 54% surge in subscription and support revenues ($253.8 million). SaaS-based subscription revenues climbed 59% from the year-ago period. Support revenues increased 48% year over year.
Geographically, on a year-over-year basis, revenues from the Americas increased 28% and represented 69% of total revenue. Europe, the Middle East and Africa (EMEA) went up 27%, accounting for 19% of total revenue. Asia-Pacific was up 14% and brought in the balance.
Also, customer wins coupled with expansion of the existing customer base supported quarterly revenues. Moreover, billings jumped 22% year over year to $561.6 million during the quarter.
Palo Alto Networks’ gross margin increased 130 basis points (bps) on a year-over-year basis to 71.9%, primarily backed by growth in both recurring subscription and support gross margins.
The company reported an adjusted operating loss of $42 million, which widened from a loss of $40 million suffered a year ago. GAAP operating loss during the quarter came in at $54.4 million compared with a loss of $50.1 million reported in the year-ago quarter. Higher operating expenses (up approximately 25% year over year) also impacted operating results.
The company’s non-GAAP net loss was $59.6 million, wider than a loss of $39.5 million reported last year. On a GAAP basis, net loss was $60.6 million compared with a loss of $57.3 million reported in the year-ago quarter.
Palo Alto Networks exited the second quarter with cash, cash equivalents and short-term investments of approximately $1.354 billion compared with $1.390 billion in the previous quarter.
Receivables were $386.1 million compared with $346.5 million in the last quarter. Palo Alto Networks’ balance sheet does not have any long-term debt. The company reported cash flow from operations of $214.3 million during the quarter. Free cash flow came in at $169.6 million during the quarter. During the quarter, the company repurchased 900k shares worth $132 million.
Guidance
For the third quarter of fiscal 2017, Palo Alto Networks expects revenues in a range of $406 million to $416 million, up 17% to 20% year over year. The Zacks Consensus Estimate is pegged at $453 million. The company expects non-GAAP earnings per share within 54 cents to 56 cents (excluding stock-based compensation expenses but including the impact of LightCyberacquisition).
The company continues to expect fiscal 2017 non-GAAP earnings per share in a range of $2.45 to $2.50.
Recent Activities
Palo Alto Networks recently announced the buyout of LightCyber for $105 million. The acquisition will expand the company’s Next-Generation Security Platform. We believe that this acquisition will not only increase its capabilities but the customer base as well.
Our Take
Palo Alto Networks allows firms, service providers and government bodies to impose tighter security measures through its network security platform. The company reported wider-than-expected loss in the second quarter. Revenues also missed the Zacks Consensus Estimate. The company also provided a tepid revenue guidance for the forthcoming quarter.
Nonetheless, revenue growth seems to be steady, aided by strength across all its geographical regions and business segments. Also, customer wins coupled with expansion of the existing customer base are the other positives. We believe that the company’s product refreshes and acquisitions synergies will boost revenues, going forward.
The company is also keen on expanding its cloud exposure. Nevertheless, a volatile spending environment and competition from Cisco Systems, Inc. (CSCO - Free Report) and Check Point Software Technologies Ltd. (CHKP - Free Report) remain concerns.
Currently, Palo Alto Networks has a Zacks Rank #2 (Buy). A better-ranked stock in the technology sector is Seagate Technology plc (STX - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Seagate has a long-term expected earnings per share growth rate of 8.17%.
Everything You Need to Know About Snapchat BEFORE It Goes Public
You may be curious about the buzz surrounding Snap Inc.'s IPO on March 2. With the company expected to be valued around $22 billion, it is expected to be the largest IPO since 2014. But should you snap up this tech stock on Day 1?
In the 2017 IPO Watch List, you'll get an inside look at Snap's exciting prospects and potential challenges. You'll also learn about 4 other exciting tech companies with
jaw-dropping growth. Each could go public in the coming months.
Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the latest scoop. Download this IPO Watch List today for free >>