Palo Alto Networks Gets A Big Boost From Work-From-Home
Given that the world has changed so much in the last two months, Palo Alto Networks' (NYSE: PANW) third quarter of fiscal 2020 (the three months ended April 30, 2020) was going to be chock-full of information. The company didn't disappoint, producing strong financial results and providing lots of details on the direction it's headed, the future of cybersecurity, and how technology continues to play an increasingly dominant role in our lives.
Palo Alto Networks' Q3 revenue was $869 million, 20% higher than a year ago and representing much higher growth than management had forecast earlier in the year. Billings (revenue collected in the period) increased 24% to $1.0 billion, and deferred revenue (revenue sitting on the balance sheet for which service has not yet been rendered) increased 28% to $3.4 billion. The acquisition of software-defined network security leader CloudGenix closed on April 21, which contributed some to the results, but it's been Palo Alto's aggressive cloud-based security-vendor purchasing over the last two years that accounted for most of the big jump.
As for the bottom-line, adjusted net income was $115 million, down 12% from a year ago. Free cash flow (basic profitability measured as revenue minus cash operating and capital expenses) declined 70% to $83.6 million, mostly due to a $51.7 million charge related to its headquarters expansion and another $50 million in litigation settlement. Free cash flow should rally from here on out. Guidance for full-year 2020 was also upgraded, and revenue is now expected to grow 16% to 17% from 2019.
Source Fool.com
