Palo Alto Networks (PANW) will report fiscal 2017 second quarter results after the bell.
The cybersecurity bellwether has lagged peers after reporting disappointing Q1 results in November when the company missed sales estimates for the first time since fiscal 3Q13. Management cited an elongated sales cycle, with some large deals slipping into the second quarter and no change in the competitive environment.
However, the company also offered revenue guidance below consensus for the second straight quarter.
Palo Alto Networks guided for Q2 non-GAAP EPS of $0.61-0.63 with revenue up 27-29% to $426-432 mln. Consensus was $0.63 and $439 million at the time.
The company expects FY17 non-GAAP EPS of $2.75-2.80 with revenue up 30-31% to $1.79-1.81 bln. Revenue growth has slowed after growing nearly 49% in fiscal 20916.
Billings grew 33% in the first quarter, but that was down from 45% growth in prior quarter. Second quarter billings are expected to grow 28% to ~$586 million after growing 62% last year.
Cybersecurity has been in the spotlight and remains a top priority among IT managers.
The onus is squarely on Palo Alto now as pretty much every cybersecurity peer has reported strong results so far this year.
The cybersecurity ETF (HACK) broke out of resistance at the beginning of the month.
Palo Alto is the third largest ‘pure-play' cybersecurity company -- behind Symantec (SYMC) and Checkpoint (CHKP) -- with $14.5 billion market cap. The stock also has one of the highest valuations in the group with a price to sales multiple of ~8x multiple.