Shares of Palo Alto Networks were dropping during extended sessions on Monday after the company posted its results for the second quarter that missed Wall Street analysts' projections for the period.
Palo Alto registered a second quarter revenue of $817 million, rising 16 percent compared to the previous year, with a net loss of around $74 million, or 75 cents per share. The company's Non-GAAP sales for same period were $1.18 per share. Analysts were projecting a second quarter revenue of $844 million with non-GAAP earnings of $1.12 per share.
According to Palo Alto chief executive officer Nikesh Arora, the company's fiscal profits for the second quarter were below their estimates mainly as a result of the impact of incentives connected to the company's next-generation security products. "We've made big progress to address this issue, Arora said, adding that they have imposed several measures to "boost our firewall sales growth."
The Santa Clara, California-headquartered cyber security solutions provider also expects a third quarter revenue between $836 million and $851 million, which equates to a year on year growth between 16 percent and 18 percent. Analysts anticipate Palo Alto Networks to post $875 million revenue in the current quarter.
Palo Alto Networks unveiled the Cortex XSOAR, an extended security system and response platform. Cortex XSOAR was designed in part using the latest technology from Demisto, a company that it bought last year.
Demisto is one of the six security companies that Palo Alto Networks has acquired since the start of 2019 to bolster its product lineup. The company combined several of those firms' solutions into a new system dubbed as Prisma Cloud that was launched in November 2019.
Cortex XSOAR, which is the newest replacement for the Demisto platform, includes high-tech tools for security use as well as response alerts and threat intelligence data monitoring from multiple sources and platforms.
The company also disclosed that its board has given the green light for a $1 billion accelerated stock repurchase program to be imposed in the third quarter this year, on top of the $802 million that remains on a $1 billion share repurchase plan approved in February last year.
Over the last four quarters, Palo Alto Networks has beat consensus earnings per share estimates in four major occasions. The company, which belongs to the Zacks Security category, reported total sales of $817 million for the period ended January 2020, missing the Zacks Consensus Estimate by 3.15 percent. Palo Alto has surpassed consensus revenue projections three times in the last year.
In 2014, Palo Alto Networks established the Cyber Threat Alliance with Fortinet, Mcafee, and Symantec, a non-profit organization whose main objective is to improve cybersecurity by encouraging cooperation between cybersecurity companies.
