Palo Alto Networks Reports Record Revenue on 70 Percent Year-over-Year Revenue Growth in its Fiscal Second Quarter 2013
Total revenue for the fiscal second quarter grew 70 percent year-over-year to
"Our growth continues to prove that
Commenting on the company's financial results,
Recent Highlights
- Designated as a Leader in the
Gartner 2013 Magic Quadrant for Enterprise Network Firewalls. - Expanded our partnership with Big Data market leader
Splunk and initiated partnerships with information security leaders Mandiant and Bit9. - Awarded the Network Innovation Award for Next Gen Firewalls by the readers and editorial staff of
TechTarget , a leading worldwide technology publication.
Conference Call Information
Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding continued revenue growth and overall 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™ is the network security company. Its innovative platform allows enterprises, service providers, and government entities to secure their networks and safely enable the increasingly complex and rapidly growing number of applications running on their networks. The core of
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 |
Six Months Ended |
||||
2013 |
2012 |
2013 |
2012 |
||
Revenue: |
|||||
Product |
$ 61,944 |
$ 38,638 |
$ 117,458 |
$ 81,499 |
|
Services |
34,555 |
18,045 |
64,975 |
32,297 |
|
Total revenue |
96,499 |
56,683 |
182,433 |
113,796 |
|
Cost of revenue: |
|||||
Product |
16,636 |
10,248 |
31,052 |
20,558 |
|
Services |
10,982 |
5,265 |
20,756 |
9,795 |
|
Total cost of revenue |
27,618 |
15,513 |
51,808 |
30,353 |
|
Total gross profit |
68,881 |
41,170 |
130,625 |
83,443 |
|
Operating expenses: |
|||||
Research and development |
15,495 |
8,514 |
28,807 |
16,362 |
|
Sales and marketing |
45,796 |
25,612 |
88,403 |
47,980 |
|
General and administrative |
9,747 |
5,768 |
18,703 |
10,925 |
|
Total operating expenses |
71,038 |
39,894 |
135,913 |
75,267 |
|
Operating income (loss) |
(2,157) |
1,276 |
(5,288) |
8,176 |
|
Interest income |
116 |
2 |
214 |
4 |
|
Other expense, net |
(60) |
(566) |
(230) |
(1,030) |
|
Income (loss) before income taxes |
(2,101) |
712 |
(5,304) |
7,150 |
|
Provision for income taxes |
512 |
288 |
824 |
2,610 |
|
Net income (loss) |
$ (2,613) |
$ 424 |
$ (6,128) |
$ 4,540 |
|
Net income (loss) attributable to |
$ (2,613) |
$ - |
$ (6,128) |
$ - |
|
Net income (loss) per share attributable to |
$ (0.04) |
$ 0.00 |
$ (0.09) |
$ 0.00 |
|
Weighted-average shares used to compute |
67,651 |
17,192 |
67,225 |
16,948 |
|
Palo Alto Networks, Inc. |
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Reconciliation of GAAP to Non-GAAP Financial Measures - Fiscal Quarter |
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(In thousands, except per share amounts) |
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(Unaudited) |
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Three Months Ended January 31, 2013 |
Three Months Ended January 31, 2012 |
||||||||||
GAAP |
Adjustments |
Non-GAAP |
GAAP |
Adjustments |
Non-GAAP |
||||||
Net income (loss) |
$ (2,613) |
$ 6,503 |
(a) |
$ 3,890 |
$ 424 |
$ 2,047 |
(c) |
$ 2,471 |
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Net income (loss) attributable to common stockholders: |
|||||||||||
Basic |
$ (2,613) |
$ 6,503 |
(a) |
$ 3,890 |
$ - |
$ 695 |
(e) |
$ 695 |
|||
Diluted |
$ (2,613) |
$ 6,503 |
(a) |
$ 3,890 |
$ - |
$ 837 |
(e) |
$ 837 |
|||
Net income (loss) per share attributable to common stockholders: |
|||||||||||
Basic |
$ (0.04) |
$ 0.10 |
(a) |
$ 0.06 |
$ 0.00 |
$ 0.04 |
(e) |
$ 0.04 |
|||
Diluted |
$ (0.04) |
$ 0.09 |
(a) |
$ 0.05 |
$ 0.00 |
$ 0.04 |
(e) |
$ 0.04 |
|||
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders: |
|||||||||||
Basic |
67,651 |
- |
67,651 |
17,192 |
- |
17,192 |
|||||
Diluted |
67,651 |
9,833 |
(f) |
77,484 |
17,192 |
5,335 |
(f) |
22,527 |
|||
Six Months Ended January 31, 2013 |
Six Months Ended January 31, 2012 |
||||||||||
GAAP |
Adjustments |
Non-GAAP |
GAAP |
Adjustments |
Non-GAAP |
||||||
Net income (loss) |
$ (6,128) |
$ 12,966 |
(b) |
$ 6,838 |
$ 4,540 |
$ 3,493 |
(d) |
$ 8,033 |
|||
Net income (loss) attributable to common stockholders: |
|||||||||||
Basic |
$ (6,128) |
$ 12,966 |
(b) |
$ 6,838 |
$ - |
$ 788 |
(e) |
$ 788 |
|||
Diluted |
$ (6,128) |
$ 12,966 |
(b) |
$ 6,838 |
$ - |
$ 957 |
(e) |
$ 957 |
|||
Net income (loss) per share attributable to common stockholders: |
|||||||||||
Basic |
$ (0.09) |
$ 0.19 |
(b) |
$ 0.10 |
$ 0.00 |
$ 0.05 |
(e) |
$ 0.05 |
|||
Diluted |
$ (0.09) |
$ 0.18 |
(b) |
$ 0.09 |
$ 0.00 |
$ 0.04 |
(e) |
$ 0.04 |
|||
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders: |
|||||||||||
Basic |
67,225 |
- |
67,225 |
16,948 |
- |
16,948 |
|||||
Diluted |
67,225 |
10,430 |
77,655 |
16,948 |
5,459 |
(f) |
22,407 |
||||
(a) To eliminate share-based compensation expense of $8,754 offset by related tax effect of share-based compensation of $2,251 for the three months ended January 31, 2013 |
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(b) To eliminate share-based compensation expense of $17,096 offset by related tax effect of share-based compensation of $4,130 for the six months ended January 31, 2013 |
|||||||||||
(c) To eliminate share-based compensation expense of $2,050 offset by related tax effect of share-based compensation of $3 for the three months ended January 31, 2012 |
|||||||||||
(d) To eliminate share-based compensation expense of $3,499 offset by related tax effect of share-based compensation of $6 for the six months ended January 31, 2012 |
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(e) Includes the effect of participating securities under the two-class method for determining net income (loss) attributable to common stockholders |
|||||||||||
(f) Difference between weighted-average shares outstanding on a diluted basis under GAAP and non-GAAP due to application of the treasury stock method for dilutive shares |
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Palo Alto Networks, Inc. |
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Preliminary Condensed Consolidated Balance Sheets |
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(In thousands) |
||
(Unaudited) |
||
January 31, |
July 31, |
|
2013 |
2012 |
|
Assets |
||
Current assets: |
||
Cash and cash equivalents |
$ 187,924 |
$ 322,642 |
Short-term investments |
149,520 |
- |
Accounts receivable, net of allowance for doubtful accounts |
68,586 |
45,642 |
Prepaid expenses and other current assets |
20,644 |
13,373 |
Total current assets |
426,674 |
381,657 |
Property and equipment, net |
25,980 |
20,979 |
Long-term investments |
30,871 |
- |
Other assets |
6,624 |
5,168 |
Total assets |
$ 490,149 |
$ 407,804 |
Liabilities and stockholders' equity |
||
Current liabilities: |
||
Accounts payable |
$ 10,769 |
$ 9,214 |
Accrued liabilities |
16,567 |
15,189 |
Accrued compensation |
24,223 |
11,307 |
Deferred revenue |
117,437 |
86,296 |
Total current liabilities |
168,996 |
122,006 |
Deferred revenue – non-current |
70,746 |
49,512 |
Other long-term liabilities |
6,887 |
7,215 |
Stockholders' equity: |
||
Preferred stock |
- |
- |
Common stock |
7 |
7 |
Additional paid-in capital |
329,680 |
309,092 |
Accumulated other comprehensive loss |
(11) |
- |
Accumulated deficit |
(86,156) |
(80,028) |
Total stockholders' equity |
243,520 |
229,071 |
Total liabilities and stockholders' equity |
$ 490,149 |
$ 407,804 |
Palo Alto Networks, Inc. |
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Preliminary Condensed Consolidated Statements of Cash Flows |
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(In thousands) |
||
(Unaudited) |
||
Six Months Ended |
||
2013 |
2012 |
|
Cash flows from operating activities |
||
Net income (loss) |
$ (6,128) |
$ 4,540 |
Adjustments to reconcile net income (loss) to |
||
Depreciation and amortization |
4,468 |
2,474 |
Amortization of investment premiums, net of accretion of purchase discounts |
822 |
- |
Share-based compensation for equity based awards |
17,030 |
3,499 |
Excess tax benefit from share-based compensation |
(106) |
- |
Change in fair value of preferred stock warrants |
- |
958 |
Changes in operating assets and liabilities: |
||
Accounts receivable, net |
(22,944) |
5,604 |
Prepaid expenses and other assets |
(7,290) |
(5,094) |
Accounts payable |
1,716 |
(1,165) |
Accrued and other liabilities |
17,640 |
5,657 |
Deferred revenue |
52,375 |
30,653 |
Reimbursement of leasehold improvements |
- |
577 |
Net cash provided by operating activities |
57,583 |
47,703 |
Cash flows from investing activities |
||
Purchase of property, equipment, and other assets |
(10,236) |
(7,063) |
Purchase of investments |
(252,633) |
- |
Proceeds from sales of investments |
13,491 |
- |
Proceeds from maturities of investments |
57,150 |
- |
Net cash used in investing activities |
(192,228) |
(7,063) |
Cash flows from financing activities |
||
Excess tax benefit from share-based compensation |
106 |
- |
Changes in restricted cash |
- |
1,221 |
Proceeds from exercise of stock options |
2,554 |
469 |
Proceeds from settlement of note receivable |
- |
38 |
Repurchase of restricted common stock from employees |
(35) |
(63) |
Payments of initial public offering costs |
(2,698) |
- |
Net cash provided by (used in) financing activities |
(73) |
1,665 |
Net increase (decrease) in cash and cash equivalents |
(134,718) |
42,305 |
Cash and cash equivalents - beginning of period |
322,642 |
40,517 |
Cash and cash equivalents - end of period |
$ 187,924 |
$ 82,822 |
SOURCE
Media, Mike Haro, Director of Corporate Communications, Palo Alto Networks, 408-438-8628, mharo@paloaltonetworks.com; or Investor Relations, Chris Danne/Maria Riley, The Blueshirt Group, 415-217-7722, ir@paloaltonetworks.com