Palo Alto Networks Inc. (NYSE:PANW)’s cybersecurity solutions are eliciting strong demand in the wake of a string of cyber-attacks propagated by Russia-linked hackers. A solid second-quarter earnings report all but affirm the strong demand signaling what could turn out to be a blockbuster year for the cybersecurity firm.
Record Sales
The company clocked the $1 billion mark in sales as clients flocked to bolster their network defenses. A 25% to $1.02 billion marked the biggest year-over-year increase in sales in the company’s history. Analysts were expecting the company to report revenues of $985.68 million.
According to Chief Executive Officer, Nikesh Arora momentum in business remains strong, driven by execution across the board. With the company well-positioned to protect customers from events like the SolarStorm attack, it should be able to generate significant revenues in 2021.
Palo Alto Network generated a net income of $154.2 million or $1.55 a share during the quarter compared to a net profit of $120.3 million or $1.13 a share reported in the second quarter of 2020. Net income topped analysts’ estimates of $1.43 a share.
For the third quarter, the company expects total billings to range between $1.22 billion and $1.24 billion, representing a 20% to 22% growth.
2021 Outlook
Revenue, on the other hand, is expected to range between $1.05 billion and $1.06 billion, representing a 21% to 22% year over year growth. The company expects a third-quarter net income per share of between $1.27 and $1.29 a share.
For the full year, the Palo Alto Network projects total billings of between 5.13 billion and $5.18 billion, with total revenue expected to range between $4.15 billion and $4.20 billion. Diluted net income should range between $5.80 and $5.90 a share.
Palo Alto networks have been on an impressive run ever since, bottoming out from one-year lows of $125 a share. The stock has rallied by more than 120% powering to record highs of $403 a share. While the stock has pulled lower in recent weeks, the pullback appears to be a minor correction pending further upside action supported by solid fundamentals.