Palo Alto Networks Reports Fiscal First Quarter 2014 Financial Results
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Total revenue for the fiscal first quarter grew 49 percent year-over-year to a record
"Demand was strong across a wide range of theaters and verticals, resulting in 14 percent sequential revenue growth in our fiscal first quarter. We added over 1,000 new customers, steadily increased penetration of our existing customer base and made clear market share gains," said
Commenting on the company's financial results in the fiscal first quarter,
Conference Call Information
Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding continued momentum in the company's business. There are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including:
Additional risks and uncertainties that could affect
Non-GAAP Financial Measures
Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures, and should be read only in conjunction with the company's consolidated financial statements prepared in accordance with GAAP. A reconciliation of the company's non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included in this press release, and investors are encouraged to review the reconciliation.
Non-GAAP net income and diluted net income per share.
About
Palo Alto Networks, Inc. |
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Preliminary Condensed Consolidated Statements of Operations |
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(In thousands, except per share data) |
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(Unaudited) |
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Three Months Ended |
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2013 |
2012 |
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Revenue: |
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Product |
$ 75,485 |
$ 55,514 |
|
Services |
52,695 |
30,420 |
|
Total revenue |
128,180 |
85,934 |
|
Cost of revenue: |
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Product |
17,954 |
14,416 |
|
Services |
15,853 |
9,774 |
|
Total cost of revenue |
33,807 |
24,190 |
|
Total gross profit |
94,373 |
61,744 |
|
Operating expenses: |
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Research and development |
19,893 |
13,312 |
|
Sales and marketing |
67,366 |
42,607 |
|
General and administrative |
14,125 |
8,956 |
|
Total operating expenses |
101,384 |
64,875 |
|
Operating loss |
(7,011) |
(3,131) |
|
Interest income |
160 |
98 |
|
Other income (expense), net |
237 |
(170) |
|
Loss before income taxes |
(6,614) |
(3,203) |
|
Provision for income taxes |
1,247 |
312 |
|
Net loss |
$ (7,861) |
$ (3,515) |
|
Net loss attributable to common stockholders, basic and diluted |
$ (7,861) |
$ (3,515) |
|
Net loss per share attributable to common stockholders, basic and diluted |
$ (0.11) |
$ (0.05) |
|
Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted |
71,681 |
66,813 |
Palo Alto Networks, Inc. |
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Reconciliation of GAAP to Non-GAAP Financial Measures |
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(In thousands, except per share amounts) |
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(Unaudited) |
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Three Months Ended October 31, |
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2013 |
2012 |
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GAAP net loss |
$ (7,861) |
$ (3,515) |
|
Share-based compensation expense |
14,411 |
8,342 |
|
Share-based payroll tax expense |
265 |
- |
|
Litigation expense [a] |
1,889 |
649 |
|
Income tax related to the above |
(2,534) |
(2,155) |
|
Non-GAAP net income |
$ 6,170 |
$ 3,321 |
|
GAAP net loss per share, diluted |
$ (0.11) |
$ (0.05) |
|
Share-based compensation expense |
0.20 |
0.12 |
|
Share-based payroll tax expense |
- |
- |
|
Litigation expense [a] |
0.03 |
0.01 |
|
Income tax related to the above |
(0.04) |
(0.03) |
|
Non-GAAP net income per share, diluted |
$ 0.08 |
$ 0.05 |
|
GAAP Weighted-average shares used to compute net loss per share, diluted |
71,681 |
66,813 |
|
Weighted-average effect of potentially dilutive securities: Employee stock options |
5,518 |
11,016 |
|
Non - GAAP Weighted-average shares used to compute net income per share, diluted |
77,199 |
77,829 |
|
[a] IP litigation expenses are attributed to ongoing IP litigation with Juniper |
Palo Alto Networks, Inc. |
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Preliminary Condensed Consolidated Balance Sheets |
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(In thousands) |
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(Unaudited) |
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October 31, |
July 31, |
||
2013 |
2013 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
$ 266,182 |
$ 310,614 |
|
Short-term investments |
170,551 |
109,007 |
|
Accounts receivable, net |
91,439 |
87,461 |
|
Prepaid expenses and other current assets |
24,160 |
22,617 |
|
Total current assets |
552,332 |
529,699 |
|
Property and equipment, net |
42,409 |
32,086 |
|
Long-term investments |
33,642 |
17,314 |
|
Other assets |
11,560 |
6,507 |
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Total assets |
$ 639,943 |
$ 585,606 |
|
Liabilities and stockholders' equity |
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Current liabilities: |
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Accounts payable |
$ 15,218 |
$ 15,544 |
|
Accrued and other liabilities |
17,876 |
14,609 |
|
Accrued compensation |
23,618 |
22,004 |
|
Deferred revenue |
171,617 |
153,945 |
|
Total current liabilities |
228,329 |
206,102 |
|
Deferred revenue – non-current |
107,339 |
95,285 |
|
Other long-term liabilities |
14,496 |
11,799 |
|
Stockholders' equity: |
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Common stock |
7 |
7 |
|
Additional paid-in capital |
406,902 |
381,703 |
|
Accumulated other comprehensive income (loss) |
5 |
(16) |
|
Accumulated deficit |
(117,135) |
(109,274) |
|
Total stockholders' equity |
289,779 |
272,420 |
|
Total liabilities and stockholders' equity |
$ 639,943 |
$ 585,606 |
Palo Alto Networks, Inc. |
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Preliminary Condensed Consolidated Statements of Cash Flows |
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(In thousands) |
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(Unaudited) |
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Three Months Ended October 31, |
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2013 |
2012 |
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Cash flows from operating activities |
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Net loss |
$ (7,861) |
$ (3,515) |
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Adjustments to reconcile net loss to |
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Depreciation and amortization |
3,146 |
2,053 |
|
Amortization of investment premiums, net of accretion of purchase discounts |
386 |
316 |
|
Share-based compensation for equity based awards |
14,383 |
8,284 |
|
Excess tax benefit from share-based compensation |
(56) |
- |
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Changes in operating assets and liabilities: |
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Accounts receivable, net |
(3,978) |
(10,727) |
|
Prepaid expenses and other assets |
(1,707) |
(3,830) |
|
Accounts payable |
(205) |
1,076 |
|
Accrued and other liabilities |
5,047 |
4,819 |
|
Deferred revenue |
29,726 |
24,600 |
|
Net cash provided by operating activities |
38,881 |
23,076 |
|
Cash flows from investing activities |
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Purchase of property, equipment, and other assets |
(15,680) |
(4,015) |
|
Purchase of investments |
(122,238) |
(168,475) |
|
Proceeds from maturities of investments |
43,959 |
- |
|
Net cash used in investing activities |
(93,959) |
(172,490) |
|
Cash flows from financing activities |
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Excess tax benefit from share-based compensation |
56 |
- |
|
Proceeds from exercise of stock options |
4,610 |
1,534 |
|
Proceeds from employee stock purchase plan |
5,988 |
- |
|
Repurchase of restricted common stock from terminated employees |
(8) |
(24) |
|
Payments of initial public offering costs |
- |
(265) |
|
Net cash provided by financing activities |
10,646 |
1,245 |
|
Net decrease in cash and cash equivalents |
(44,432) |
(148,169) |
|
Cash and cash equivalents - beginning of period |
310,614 |
322,642 |
|
Cash and cash equivalents - end of period |
$ 266,182 |
$ 174,473 |
SOURCE
Media, Jennifer Jasper Smith, Head of Corporate Communications, Palo Alto Networks, 408-638-3280, jjsmith@paloaltonetworks.com; or Investor Relations, Kelsey Turcotte, Vice President of Investor Relations, 408-753-3872, kturcotte@paloaltonetworks.com, or Chris Danne/Maria Riley, The Blueshirt Group, 415-217-7722, ir@paloaltonetworks.com