Palo Alto Networks Beats Expectations and Announces 2-for-1 Stock Split

Key Highlights:

Palo Alto Networks (PANW) surpassed analysts' estimates for first-quarter fiscal 2025 revenue and profit.

The cybersecurity giant raised its full-year revenue and adjusted EPS guidance.

A 2-for-1 stock split was announced, set to take effect in December.

Earnings Overview

Palo Alto Networks delivered strong first-quarter fiscal 2025 results, reporting revenue of $2.14 billion, a 14% year-over-year increase from $1.88 billion and slightly ahead of analysts’ $2.12 billion consensus estimate compiled by Visible Alpha. Net profit soared over 80% to $350.7 million, significantly exceeding expectations of $272.1 million.

CEO Nikesh Arora credited the company’s success to its "platformization" strategy, which focuses on bundling and consolidating services. He described this approach as a “game changer” for improving security solutions and driving enhanced AI outcomes.

Wedbush analysts maintained their “outperform” rating and $400 price target for the stock, emphasizing that Palo Alto’s platformization efforts are just beginning to gain momentum. They noted that cloud penetration remains a key growth driver, providing a steady pipeline of platform deals.

Stock Split Announcement

Joining the ranks of other prominent companies like Walmart, Chipotle, and Nvidia, Palo Alto Networks announced a 2-for-1 stock split. The move aims to make its shares more accessible to a broader base of investors and potentially boost trading volume.

The split will double the company’s existing share count. Shareholders of record by Dec. 12 will receive one additional share for each share they own after the market closes on Dec. 13. The new shares will trade at half the current price starting Dec. 16.

Upgraded Fiscal 2025 Outlook

The company also raised its guidance for the full fiscal year:

Revenue: Now projected at $9.12 billion to $9.17 billion, up slightly from the previous range of $9.10 billion to $9.15 billion.

Adjusted EPS: Revised to $6.26 to $6.39, compared to earlier estimates of $6.18 to $6.31.

Stock Performance

As of Thursday, Palo Alto shares were trading 1.4% higher at $398.46, reflecting a year-to-date increase of approximately 35%. The company’s strong financial performance and strategic initiatives continue to bolster investor confidence in its long-term growth trajectory