Palo Alto Networks Tops Estimates, Announces Stock Split

• Palo Alto Networks reported better revenue and profit than expected for the first quarter of fiscal 2025.

• The cybersecurity company lifted its projections for full-year revenue and adjusted earnings per share (EPS).

• Palo Alto Networks also said it will undergo a 2-for-1 stock split next month.

Palo Alto Networks (PANW) posted better-than-expected fiscal 2025 first-quarter results and announced a 2-for-1 stock split after the bell Wednesday.

The cybersecurity company reported $2.14 billion in revenue for the quarter, up from $1.88 billion a year ago and just above the $2.12 billion consensus estimate of analysts compiled by Visible Alpha. Profit of $350.7 million jumped more than 80% and easily topped the expected $272.1 million.

Chief Executive Officer (CEO) Nikesh Arora said the company notes that its customers are realizing its “platformization” strategy of consolidating and bundling services to boost sales is “the game changer that will solve security and enable better AI outcomes.”

Wedbush analysts, while maintaining an “outperform” rating and $400 price target, said they believe the company’s “efforts on platformization are just beginning to hit its stride as it generates a more stable pipeline of platformization deals with cloud penetration still acting as a major driver going forward.”

Palo Alto Networks also announced a stock split that will make it the latest company to do so this year, joining the likes of Walmart (WMT), Chipotle Mexican Grill (CMG), and Nvidia (NVDA). Companies perform stock splits for a variety of reasons, including making their share price more accessible to a wider range of investors and increasing trading activity on their stock.

Palo Alto Networks soon will double its existing number of shares with a 2-for-1 split, meaning shareholders of record as of Dec. 12 will receive an additional share for each one they own after the market closes Dec. 13. The new number of shares and halved price will take effect Dec. 16.

The company also lifted its full-year outlook for fiscal 2025, with revenue expected between $9.12 billion to $9.17 billion, up from $9.10 billion to $9.15 billion previously. Adjusted earnings per share (EPS) are seen between $6.26 to $6.39, up from $6.18 to $6.31.

Palo Alto shares recently were up 1.4% at $398.46 Thursday, roughly 35% above where they started the year.