Palo Alto Networks Beats Estimates as AI Threats Lift Demand

Fourth Quarter Results

Palo Alto Networks, an American cybersecurity company, beat estimates for its fiscal fourth quarter as demand grew for tools that defend against artificial intelligence driven attacks, CNBC reported.

Revenue rose 34% from $2.54 billion a year earlier. The company reported a net loss of $282 million, or 35 cents per share, compared with net income of $254 million, or 36 cents per share, in the same quarter last year.

Shares slipped about 2% in extended trading after falling 5% during the regular session. CNBC reported that the stock has nearly doubled this year.

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Guidance Above Wall Street

The company forecast revenue of $3.30 billion to $3.31 billion for the first quarter, ahead of an analyst estimate of $3.22 billion.

For the full year it guided to revenue of $14.10 billion to $14.20 billion and adjusted earnings per share of $4.16 to $4.19, against forecasts of $13.79 billion and $4.11.

Bloomberg reported that the profit outlook exceeded Wall Street's average estimate of $4.11 and that next generation security annual recurring revenue also came in higher than expected. Bloomberg said the statement was issued on Tuesday.

AI Demand and Acquisitions

Chief Executive Nikesh Arora told CNBC that the acceleration of AI attacks is pushing customers to build faster defences, and that the effect will be spread over years rather than quarters. "This is a long-term tailwind," he said. "It will not happen in one quarter, and it will not happen in two."

Arora said the company has held more than 2,000 customer briefings, up from roughly 1,200 disclosed the previous quarter, following the launch of Anthropic's Mythos model. CNBC linked wider concern about autonomous attacks to breaches such as the OpenAI and Hugging Face hack.

Palo Alto announced the acquisition of the AI startup Console. CNBC reported that its largest deals to date are the $25 billion purchase of identity security firm CyberArk and the nearly $3.4 billion purchase of Chronosphere.

Palo Alto is not the only company benefiting. CNBC reported that CrowdStrike and Okta both rose last week on strong earnings and guidance. The sources do not say how much Console cost or when the deal will close.