Palo Alto Networks Q2 Adj Profit Meet View, But Revenues Top

(RTTNews) - Network security provider Palo Alto Networks, Inc. (PANW) reported Monday a loss for the fourth quarter that sharply widened from last year, despite strong double-digit revenue growth, reflecting a surge in expenses and higher income tax provisions. However, excluding items, the company reported a profit which matched analysts' expectations.

Palo Alto Networks competes with the likes of Cisco Systems, Inc. (CSCO), Juniper Networks, Inc. (JNPR), and Check Point Software Technologies Ltd. (CHKP). The company provides network security technologies that helps prevent hacking and other security threats. The company also completed its first year as a publicly traded company.

"Demand was strong in the fourth quarter across all theaters and verticals resulting in 11 percent sequential revenue growth and 49 percent year-over-year growth," President and CEO Mark McLaughlin said in a statement.

Palo Alto Networks revealed that it continues to significantly outpace the competition and cement its position as the global leader in next generation security.

The Santa Clara, California-based company reported a net loss of $15.84 million or $0.22 per share for the fourth quarter, wider than $4.60 million or $0.18 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $4.71 million or $0.06 per share, compared to $1.95 million or $0.03 per share in the year-ago quarter.

On average, twenty-seven analysts polled by Thomson Reuters expected the company to report earnings of $0.06 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenue for the quarter surged 49 percent to a record $112.39 million from $75.64 million in the same quarter last year, and topper twenty-four Wall Street analysts' consensus estimate of $108.98 million.

Revenue growth was attributable to increasing demand for the company's appliances and contribution from its recurring subscription and maintenance services. Palo Alto Networks also added over 1,000 new end-customers in the quarter.

Total operating expenses for the quarter increased to $89.01 million from $58.32 million in the prior-year quarter. Provision for income taxes were $8.96 million, compared to $0.29 million last year.

For fiscal 2013, the company reported a net loss of $29.25 million or $0.43 per share, compared to breakeven results in the prior year. Excluding items, adjusted net income for the year was $16.03 million or $0.21 per share, compared to $14.65 million or $0.14 per share in the year ago. Analysts expected the company to report earnings of $0.21 per share for fiscal 2013.

Total revenues for the full year surged 55 percent to $396.11 million from $255.14 million in the previous year. Street was looking for full-year 2013 revenues of $392.65 million.

Deferred revenue soared 84 percent year-over-year to reach $249.2 million at the end of fiscal 2013 with the company's hybrid SaaS revenue model contributing to the strong growth.

PANW closed Monday's regular trading session at $46.84, up $2.04 or 4.55% on a volume of 2.98 million shares. The stock gained a further $1.21 or 2.58% in after-hours trading.