Palo Alto Networks revenue, profit beat Street estimates

(Reuters) - Cybersecurity company Palo Alto Networks Inc topped Wall Street estimates for revenue and profit on Tuesday, aided by better-than-expected growth in its product business, sending its shares up 6 percent.

Revenue in the segment, which includes firewall protection software Panorama, soared nearly 33 percent to $271.6 million, beating estimates of $243.1 million, according to IBES data from Refinitiv.

Services revenue, which includes revenue from contract-based subscriptions for its security offerings, surged 29 percent to $439.6 million in the second quarter. Analysts on average were expecting $438.4 million from the segment, which generates more than half of the company’s total revenue.

Cybersecurity companies have benefited as organizations worldwide raise budgets to shield against rising cyber crimes. To tap into the growing market and expand portfolio, Palo Alto has been investing on acquisitions. The company said last week it would buy U.S.-Israeli information security firm Demisto Inc for $560 million in cash and stock.

The company forecast current-quarter revenue between $697 million and $707 million, while analysts had expected $697 million.

Net loss narrowed to $2.6 million, or 3 cents per share, in the quarter ended Jan. 31, from $25.6 million, or 28 cents per share, a year earlier.

Excluding items, the company earned $1.51 per share, ahead of analysts’ expectation of $1.22.

Total revenue rose 30 percent to $711.2 million, beating estimates of $682.1 million.

The company also said it would repurchase $1 billion of its shares.

Reporting by Akanksha Rana in Bengaluru; Editing by Shinjini Ganguli