| Palo Alto Networks (NASDAQ: PANW), the global cybersecurity leader, announced today financial results for its fiscal first quarter 2025, ended October 31, 2024. |
| Total revenue for the fiscal first quarter of 2025 grew 14% year over year to $2.1 billion, compared with total revenue of $1.9 billion for the fiscal first quarter of 2024. GAAP net income for the fiscal first quarter of 2025 was $350.7 million, or $0.99 per diluted share, compared with GAAP net income of $194.2 million, or $0.56 per diluted share, for the fiscal first quarter of 2024. |
| Non-GAAP net income for the fiscal first quarter of 2025 was $544.9 million, or $1.56 per diluted share, compared with non-GAAP net income of $466.3 million, or $1.38 per diluted share, for the fiscal first quarter of 2024. A reconciliation between GAAP and non-GAAP information is contained in the tables below. |
| "Our Q1 results reinforced our conviction in our differentiated platformization strategy," said Nikesh Arora, chairman and CEO of Palo Alto Networks. "We see a growing market realization that platformization is the game changer that will solve security and enable better AI outcomes. I expect this will be a multiyear trend for which we are best positioned to deliver to our customers." |
| "Our platformization progress continued in Q1, driving strong financial results," said Dipak Golechha, chief financial officer of Palo Alto Networks. "As a result, we are raising our NGS ARR, revenue and non-GAAP EPS guidance for the year." |
| Stock Split |
| Palo Alto Networks announced that its board of directors has approved a two-for-one forward stock split of the company's outstanding shares of common stock. The stock split is to be effected through an amendment to the company's restated certificate of incorporation, which will also effect a proportionate increase in the number of authorized shares of common stock from 1.0 billion to 2.0 billion. Each stockholder of record as of the close of trading on December 12, 2024 (the "record date"), will receive, after the close of trading on December 13, 2024, one additional share for every share held on the record date. Trading is expected to begin on a split-adjusted basis on December 16, 2024. |
| Financial Outlook |
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Palo Alto Networks provides guidance based on current market conditions and expectations. |
| For the fiscal second quarter 2025, we expect: |
- Next-Generation Security ARR of $4.70 billion to $4.75 billion, representing year-over-year growth of between 35% and 36%.
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- Remaining performance obligation of $12.9 billion to $13.0 billion, representing year-over-year growth of between 20% and 21%.
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- Total revenue in the range of $2.22 billion to $2.25 billion, representing year-over-year growth of between 12% and 14%.
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- Diluted non-GAAP net income per share in the range of $1.54 to $1.56, using 350 million to 352 million shares outstanding.
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| For the fiscal year 2025, we expect: |
| Next-Generation Security ARR of $5.52 billion to $5.57 billion, representing year-over-year growth of between 31% and 32%. |
- Remaining performance obligation of $15.2 billion to $15.3 billion, representing year-over-year growth of between 19% and 20%.
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- Total revenue in the range of $9.12 billion to $9.17 billion, representing year-over-year growth of 14%.
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- Non-GAAP operating margin in the range of 27.5% to 28.0%.
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- Diluted non-GAAP net income per share in the range of $6.26 to $6.39, using 350 million to 354 million shares outstanding.
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- Adjusted free cash flow margin in the range of 37% to 38%.
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| Guidance for non-GAAP financial measures excludes share-based compensation-related charges, including share-based payroll tax expense, acquisition-related costs, including change in fair value of contingent consideration liability, amortization expense of acquired intangible assets, litigation-related charges, non-cash charges related to convertible notes, and income tax and other tax adjustments related to our long-term non-GAAP effective tax rate, along with certain non-recurring expenses and certain non-recurring cash flows. We have not reconciled non-GAAP operating margin guidance to GAAP operating margin, diluted non-GAAP net income per share guidance to GAAP net income per diluted share or adjusted free cash flow margin guidance to GAAP net cash from operating activities because we do not provide guidance on GAAP operating margin, GAAP net income or net cash from operating activities and would not be able to present the various reconciling cash and non-cash items between GAAP and non-GAAP financial measures because certain items that impact these measures are uncertain or out of our control, or cannot be reasonably predicted, including share-based compensation expense, without unreasonable effort. The actual amounts of such reconciling items will have a significant impact on the company's GAAP net income per diluted share and GAAP net cash from operating activities. |
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| Palo Alto Networks |
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