Palo Alto Networks, Inc. (PANW) on Thursday reported a loss for the second quarter as strong revenue growth was more than offset by a surge in expenses. However, excluding items, the company reported a profit for the quarter. In a conference call, the company reportedly forecast earnings and revenue for the third quarter in line with analysts' estimates.
Santa Clara, California-based Palo Alto Networks competes with the likes of Cisco Systems Inc. (CSCO), Juniper Networks Inc. (JNPR), and Check Point Software Technologies Ltd. (CHKP). The company provides network security technologies that helps prevent hacking and other security threats.
The company's total operating expenses for the quarter increased 78 percent to $71.04 million from $39.89 million in the corresponding quarter last year. Research and development expenses surged 82 percent to $15.50 million, sales and marketing expenses rose 79 percent to $45.80 million, and general and administrative expenses increased 69 percent to $9.75 million.
During the second quarter, Palo Alto Networks added over 1,000 new end-customers to reach over 11,000 total end-customers. Deferred revenue grew 92 percent from the year-ago period to reach $188.2 million.
The company's net loss for the second quarter was $2.61 million or $0.04 per share, compared to net income of $0.42 million or break-even per share in the year-ago period.
Adjusted net income was $3.89 million or $0.05 per share, compared with adjusted net income of $2.47 million or $0.04 per share in the prior-year quarter. On average, twenty five analysts polled by Thomson Reuters expected the company to report earnings of $0.04 per share. Analysts' estimates typically exclude special items.
Total revenue for the quarter grew 70 percent to $96.50 million from $56.68 million in the year-ago period. Analysts had a consensus revenue estimate for the quarter of $93.29 million.
Mark McLaughlin, president and chief executive officer of Palo Alto Networks said, "Our growth continues to prove that Palo Alto Networks is transforming the enterprise network security space with high value, disruptive technology. During the quarter, we again added over 1,000 new customers for the fifth consecutive quarter."
The company reportedly said in a conference call that it expects third-quarter earnings per share of about $0.05 and revenues in a range of $100 million to $104 million. Analysts expect the company to report earnings of $0.05 per share for the quarter on revenues of $101.88 million.
PANW closed Thursday's regular trading session at $61.13, up $3.21 or 5.54 percent on a volume of 2.43 million shares. However, in after-hours trading, the stock declined 2.13 or 3.48 percent to $59.00.
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