Palo Alto Networks, Inc. (NYSE: PANW) on Wednesday reported fiscal third quarter revenue that topped analysts’ estimates, sending the stock up more than 16 percent.
The security software company said total revenue rose 25 percent to $431.8 million in the fiscal third quarter, compared with $345.8 million a year earlier. Analysts polled by Thomson Reuters had projected revenue of $411.9 million.
Net income rose to $57.1 million, or 61 cents per share, in the quarter ended April 30. The result also beat analysts’ estimate of 55 cents per share.
The company said the better-than-expected result was boosted by its Next-Generation Security Platform and the company added more customers during the quarter. This eased investors’ concerns that the cyber security industry is slowing down.
"We reported record revenue of $432 million in our fiscal third quarter and added the second highest number of new customers in the company's history," said Mark McLaughlin, chief executive officer of Palo Alto Networks. "The integrated and highly automated prevention capabilities of our Next-Generation Security Platform continue to differentiate us in the market as we help our customers protect our digital way of life."
"Expansion within our existing customer base and new customer acquisitions in the quarter drove growth in revenue, billings and deferred revenue," commented Steffan Tomlinson, chief financial officer of Palo Alto Networks. "In addition, we continue to balance growth and profitability, as cash flow from operations totaled $211.2 million in the quarter, free cash flow totaled $162.6 million, and we ended the quarter with cash, cash equivalents and investments of $2.1 billion."
Palo Alto shares rose as much as 15.3 percent to $136.53 in the early trading. The stock was down 5 percent this year before the earnings.