Palo Alto Networks Reports Record Fourth Quarter and Fiscal Year 2013 Financial Results
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Total revenue for the fiscal fourth quarter grew 49 percent year-over-year to a record
"Demand was strong in the fourth quarter across all theaters and verticals resulting in 11 percent sequential revenue growth and 49 percent year-over-year growth," said
For fiscal year 2013, total revenue grew 55 percent to
Commenting on the company's financial results in the fiscal fourth quarter,
Recent Highlights
- We introduced the Palo Alto Networks WF-500 appliance, the industry's first platform designed to deliver a private cloud solution for timely and thorough detection, analysis, and prevention of advanced persistent threats (APTs).
- We announced that WildFire is capable of analyzing Android applications to identify advanced threats in Android applications running on smartphones and tablets.
- At VMworld, we announced support for the VMware NSX network virtualization platform which will allow organizations to unlock all the benefits of the software-defined data center, from operational efficiencies to greater agility, without compromising security.
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. |
|||||
Preliminary Condensed Consolidated Statements of Operations |
|||||
(In thousands, except per share data) |
|||||
(Unaudited) |
|||||
Three Months Ended |
Year Ended |
||||
2013 |
2012 |
2013 |
2012 |
||
Revenue: |
|||||
Product |
$ 65,456 |
$ 49,439 |
$ 243,707 |
$ 174,462 |
|
Services |
46,929 |
26,203 |
152,400 |
80,676 |
|
Total revenue |
112,385 |
75,642 |
396,107 |
255,138 |
|
Cost of revenue: |
|||||
Product |
16,505 |
12,533 |
63,412 |
44,615 |
|
Services |
13,753 |
9,034 |
46,344 |
25,938 |
|
Total cost of revenue |
30,258 |
21,567 |
109,756 |
70,553 |
|
Total gross profit |
82,127 |
54,075 |
286,351 |
184,585 |
|
Operating expenses: |
|||||
Research and development |
17,627 |
11,746 |
62,482 |
38,570 |
|
Sales and marketing |
59,635 |
37,721 |
199,771 |
115,917 |
|
General and administrative |
11,748 |
8,852 |
42,719 |
26,207 |
|
Total operating expenses |
89,010 |
58,319 |
304,972 |
180,694 |
|
Operating income (loss) |
(6,883) |
(4,244) |
(18,621) |
3,891 |
|
Interest income |
137 |
11 |
484 |
18 |
|
Other expense, net |
(132) |
(77) |
(519) |
(1,110) |
|
Income (loss) before income taxes |
(6,878) |
(4,310) |
(18,656) |
2,799 |
|
Provision for income taxes |
8,958 |
289 |
10,590 |
2,062 |
|
Net income (loss) |
$ (15,836) |
$ (4,599) |
$ (29,246) |
$ 737 |
|
Net income (loss) attributable to common stockholders, basic and diluted |
$ (15,836) |
$ (4,599) |
$ (29,246) |
$ - |
|
Net income (loss) per share attributable to common stockholders, basic and diluted |
$ (0.22) |
$ (0.18) |
$ (0.43) |
$ 0.00 |
|
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders, basic and diluted |
70,936 |
25,919 |
68,682 |
19,569 |
Palo Alto Networks, Inc. |
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Reconciliation of GAAP to Non-GAAP Financial Measures |
|||||||
(In thousands, except per share amounts) |
|||||||
(Unaudited) |
|||||||
Three Months Ended July 31, |
Twelve Months Ended July 31, |
||||||
2013 |
2012 |
2013 |
2012 |
||||
GAAP Net income (loss) |
$ (15,836) |
$ (4,599) |
$ (29,246) |
$ 737 |
|||
Share-based compensation expense |
14,146 |
6,552 |
43,876 |
13,925 |
|||
Share-based payroll tax expense |
152 |
- |
1,287 |
- |
|||
Loss on facility sublease |
262 |
- |
262 |
- |
|||
Income tax related to the above |
(4,801) |
(4) |
(10,933) |
(10) |
|||
Other tax adjustments [a] |
10,785 |
- |
10,785 |
- |
|||
Non-GAAP net income |
$ 4,708 |
$ 1,949 |
$ 16,031 |
$ 14,652 |
|||
GAAP net income (loss) per share, diluted |
$ (0.22) |
$ (0.18) |
$ (0.43) |
$ - |
|||
Share-based compensation expense |
0.20 |
0.21 |
0.62 |
0.14 |
|||
Share-based payroll tax expense |
- |
- |
0.02 |
- |
|||
Loss on facility sublease |
- |
- |
- |
- |
|||
Income tax related to the above |
(0.07) |
- |
(0.16) |
- |
|||
Other tax adjustments [a] |
0.15 |
- |
0.16 |
- |
|||
Non-GAAP net income per share, diluted |
$ 0.06 |
$ 0.03 |
$ 0.21 |
$ 0.14 |
|||
GAAP Weighted-average shares used to compute net income (loss) per share, diluted |
70,936 |
25,919 |
68,682 |
19,569 |
|||
Weighted-average effect of potentially dilutive securities: Employee stock options |
5,739 |
9,602 |
8,768 |
6,737 |
|||
Non - GAAP Weighted-average shares used to compute net income per share, diluted |
76,675 |
35,521 |
77,450 |
26,306 |
[a] |
Other tax adjustments are related to the valuation allowance on deferred tax assets and interim tax cost associated with the implementation of the international structure. |
Palo Alto Networks, Inc. |
||
Preliminary Condensed Consolidated Balance Sheets |
||
(In thousands) |
||
(Unaudited) |
||
July 31, |
July 31, |
|
2013 |
2012 |
|
Assets |
||
Current assets: |
||
Cash and cash equivalents |
$ 310,614 |
$ 322,642 |
Short-term investments |
109,007 |
- |
Accounts receivable, net |
87,461 |
45,642 |
Prepaid expenses and other current assets |
22,617 |
13,373 |
Total current assets |
529,699 |
381,657 |
Property and equipment, net |
32,086 |
20,979 |
Long-term investments |
17,314 |
- |
Other assets |
6,507 |
5,168 |
Total assets |
$ 585,606 |
$ 407,804 |
Liabilities and stockholders' equity |
||
Current liabilities: |
||
Accounts payable |
$ 15,544 |
$ 9,214 |
Accrued and other liabilities |
14,609 |
15,189 |
Accrued compensation |
22,004 |
11,307 |
Deferred revenue |
153,945 |
86,296 |
Total current liabilities |
206,102 |
122,006 |
Deferred revenue – non-current |
95,285 |
49,512 |
Other long-term liabilities |
11,799 |
7,215 |
Stockholders' equity: |
||
Common stock |
7 |
7 |
Additional paid-in capital |
381,703 |
309,092 |
Accumulated other comprehensive loss |
(16) |
- |
Accumulated deficit |
(109,274) |
(80,028) |
Total stockholders' equity |
272,420 |
229,071 |
Total liabilities and stockholders' equity |
$ 585,606 |
$ 407,804 |
Palo Alto Networks, Inc. |
||
Preliminary Condensed Consolidated Statements of Cash Flows |
||
(In thousands) |
||
(Unaudited) |
||
Year Ended July 31, |
||
2013 |
2012 |
|
Cash flows from operating activities |
||
Net income (loss) |
$ (29,246) |
$ 737 |
Adjustments to reconcile net income (loss) to |
||
Depreciation and amortization |
9,892 |
6,134 |
Amortization of investment premiums, net of accretion of purchase discounts |
1,943 |
- |
Share-based compensation for equity based awards |
43,704 |
13,837 |
Loss on facility sublease |
262 |
- |
Excess tax benefit from share-based compensation |
(6,762) |
(215) |
Change in fair value of preferred stock warrants |
- |
958 |
Changes in operating assets and liabilities: |
||
Accounts receivable, net |
(41,819) |
(15,965) |
Prepaid expenses and other assets |
(8,865) |
(11,063) |
Accounts payable |
5,830 |
3,779 |
Accrued and other liabilities |
26,158 |
9,912 |
Deferred revenue |
113,422 |
68,553 |
Reimbursement of leasehold improvements |
- |
701 |
Net cash provided by operating activities |
114,519 |
77,368 |
Cash flows from investing activities |
||
Purchase of property, equipment, and other assets |
(22,442) |
(14,565) |
Purchase of investments |
(345,324) |
- |
Proceeds from sales of investments |
13,491 |
- |
Proceeds from maturities of investments |
202,710 |
- |
Net cash used in investing activities |
(151,565) |
(14,565) |
Cash flows from financing activities |
||
Proceeds from initial public offering, net of offering costs |
- |
215,375 |
Excess tax benefit from share-based compensation |
6,762 |
215 |
Changes in restricted cash |
- |
1,221 |
Proceeds from exercise of stock options |
14,765 |
1,956 |
Proceeds from employee stock purchase plan |
6,267 |
- |
Proceeds from settlement of note receivable |
- |
637 |
Payments of initial public offering costs |
(2,698) |
- |
Repurchase of restricted common stock from terminated employees |
(78) |
(82) |
Net cash provided by financing activities |
25,018 |
219,322 |
Net increase (decrease) in cash and cash equivalents |
(12,028) |
282,125 |
Cash and cash equivalents - beginning of period |
322,642 |
40,517 |
Cash and cash equivalents - end of period |
$ 310,614 |
$ 322,642 |
SOURCE
Jennifer Jasper Smith, Head of Corporate Communications, Palo Alto Networks, 408-638-3280, jjsmith@paloaltonetworks.com; or Investor Relations, Chris Danne/Maria Riley, The Blueshirt Group, 415-217-7722, ir@paloaltonetworks.com