Palo Alto Networks Reports 54 Percent Year-over-Year Revenue Growth in its Fiscal Third Quarter 2013
(Logo: http://photos.prnewswire.com/prnh/20130508/SF04701LOGO)
Total revenue for the fiscal third quarter grew 54 percent year-over-year to
"In our fiscal third quarter, we continued to gain market share, rapidly acquire new customers and extend our penetration within existing customers," said
Commenting on the company's financial results,
Recent Highlights
- Achieved Common Criteria Evaluation Assurance Level 4 (EAL 4+) certification; this expands our market opportunity by addressing the stringent certification requirements commonly demanded by certain federal, carrier, and financial organizations.
- Announced availability of the GlobalProtect app for iOS in the App Store™ and for Android™ Mobile OS in GooglePlay™, empowering enterprise customers to extend next-generation firewall security policies to mobile users.
- Published the inaugural publication of the Modern Malware Review, the first industry report to examine the behavior and lifecycle of bleeding-edge new malware, providing the industry and
Palo Alto Networks customers' valuable insights that are key to improving their cybersecurity posture. - Added
Carl Eschenbach , President and Chief Operating Officer ofVMware , to our Board of Directors.
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 |
Nine Months Ended |
||||
2013 |
2012 |
2013 |
2012 |
||
Revenue: |
|||||
Product |
$ 60,793 |
$ 43,524 |
$ 178,251 |
$ 125,023 |
|
Services |
40,496 |
22,176 |
105,471 |
54,473 |
|
Total revenue |
101,289 |
65,700 |
283,722 |
179,496 |
|
Cost of revenue: |
|||||
Product |
15,855 |
11,524 |
46,907 |
32,082 |
|
Services |
11,835 |
7,109 |
32,591 |
16,904 |
|
Total cost of revenue |
27,690 |
18,633 |
79,498 |
48,986 |
|
Total gross profit |
73,599 |
47,067 |
204,224 |
130,510 |
|
Operating expenses: |
|||||
Research and development |
16,048 |
10,462 |
44,855 |
26,824 |
|
Sales and marketing |
51,733 |
30,216 |
140,136 |
78,196 |
|
General and administrative |
12,268 |
6,430 |
30,971 |
17,355 |
|
Total operating expenses |
80,049 |
47,108 |
215,962 |
122,375 |
|
Operating income (loss) |
(6,450) |
(41) |
(11,738) |
8,135 |
|
Interest income |
133 |
3 |
347 |
7 |
|
Other expense, net |
(157) |
(3) |
(387) |
(1,033) |
|
Income (loss) before income taxes |
(6,474) |
(41) |
(11,778) |
7,109 |
|
Provision (benefit) for income taxes |
808 |
(837) |
1,632 |
1,773 |
|
Net income (loss) |
$ (7,282) |
$ 796 |
$ (13,410) |
$ 5,336 |
|
Net income (loss) attributable to |
|||||
Basic |
$ (7,282) |
$ 43 |
$ (13,410) |
$ 40 |
|
Diluted |
$ (7,282) |
$ 53 |
$ (13,410) |
$ 49 |
|
Net income (loss) per share attributable to |
|||||
Basic |
$ (0.10) |
$ 0.00 |
$ (0.20) |
$ 0.00 |
|
Diluted |
$ (0.10) |
$ 0.00 |
$ (0.20) |
$ 0.00 |
|
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders: |
|||||
Basic |
69,575 |
18,459 |
67,980 |
17,238 |
|
Diluted |
69,575 |
24,888 |
67,980 |
23,020 |
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) |
|||||||||||
(Unaudited) |
|||||||||||
Three Months Ended April 30, 2013 |
Three Months Ended April 30, 2012 |
||||||||||
GAAP |
Adjustments |
Non-GAAP |
GAAP |
Adjustments |
Non-GAAP |
||||||
Net income (loss) |
$ (7,282) |
$ 11,767 |
(a) |
$ 4,485 |
$ 796 |
$ 3,874 |
(c) |
$ 4,670 |
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Net income (loss) attributable to |
|||||||||||
Basic |
$ (7,282) |
$ 11,767 |
(a) |
$ 4,485 |
$ 43 |
$ 1,355 |
(e) |
$ 1,398 |
|||
Diluted |
$ (7,282) |
$ 11,767 |
(a) |
$ 4,485 |
$ 53 |
$ 1,654 |
(e) |
$ 1,707 |
|||
Net income (loss) per share attributable to |
|||||||||||
Basic |
$ (0.10) |
$ 0.16 |
(a) |
$ 0.06 |
$ 0.00 |
$ 0.08 |
(e) |
$ 0.08 |
|||
Diluted |
$ (0.10) |
$ 0.16 |
(a) |
$ 0.06 |
$ 0.00 |
$ 0.07 |
(e) |
$ 0.07 |
|||
Weighted-average shares used to |
|||||||||||
Basic |
69,575 |
- |
69,575 |
18,459 |
- |
18,459 |
|||||
Diluted |
69,575 |
8,466 |
(f) |
78,041 |
24,888 |
- |
24,888 |
||||
Nine Months Ended April 30, 2013 |
Nine Months Ended April 30, 2012 |
||||||||||
GAAP |
Adjustments |
Non-GAAP |
GAAP |
Adjustments |
Non-GAAP |
||||||
Net income (loss) |
$ (13,410) |
$ 24,733 |
(b) |
$ 11,323 |
$ 5,336 |
$ 7,367 |
(d) |
$ 12,703 |
|||
Net income (loss) attributable to |
|||||||||||
Basic |
$ (13,410) |
$ 24,733 |
(b) |
$ 11,323 |
$ 40 |
$ 2,073 |
(e) |
$ 2,113 |
|||
Diluted |
$ (13,410) |
$ 24,733 |
(b) |
$ 11,323 |
$ 49 |
$ 2,530 |
(e) |
$ 2,579 |
|||
Net income (loss) per share attributable to |
|||||||||||
Basic |
$ (0.20) |
$ 0.37 |
(b) |
$ 0.17 |
$ 0.00 |
$ 0.12 |
(e) |
$ 0.12 |
|||
Diluted |
$ (0.20) |
$ 0.35 |
(b) |
$ 0.15 |
$ 0.00 |
$ 0.11 |
(e) |
$ 0.11 |
|||
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders: |
|||||||||||
Basic |
67,980 |
- |
67,980 |
17,238 |
- |
17,238 |
|||||
Diluted |
67,980 |
9,752 |
(f) |
77,732 |
23,020 |
- |
23,020 |
||||
(a) To eliminate share-based compensation expense of $12,634 and share-based payroll tax of $1,135 offset by related income tax effect of $2,002 for the three months ended April 30, 2013 |
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(b) To eliminate share-based compensation expense of $29,730 and share-based payroll tax of $1,135 offset by related income tax effect of $6,132 for the nine months ended April 30, 2013 |
|||||||||||
(c) To eliminate share-based compensation expense of $3,874 offset by related income tax effect of $0 for the three months ended April 30, 2012 |
|||||||||||
(d) To eliminate share-based compensation expense of $7,373 offset by related income tax effect of $6 for the nine months ended April 30, 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 |
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(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 |
Palo Alto Networks, Inc. |
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Preliminary Condensed Consolidated Balance Sheets |
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(In thousands) |
||
(Unaudited) |
||
April 30, |
July 31, |
|
2013 |
2012 |
|
Assets |
||
Current assets: |
||
Cash and cash equivalents |
$ 213,664 |
$ 322,642 |
Short-term investments |
148,033 |
- |
Accounts receivable, net of allowance for doubtful accounts |
91,489 |
45,642 |
Prepaid expenses and other current assets |
19,538 |
13,373 |
Total current assets |
472,724 |
381,657 |
Property and equipment, net |
29,500 |
20,979 |
Long-term investments |
29,767 |
- |
Other assets |
6,786 |
5,168 |
Total assets |
$ 538,777 |
$ 407,804 |
Liabilities and stockholders' equity |
||
Current liabilities: |
||
Accounts payable |
$ 12,810 |
$ 9,214 |
Accrued liabilities |
15,578 |
15,189 |
Accrued compensation |
19,662 |
11,307 |
Deferred revenue |
133,968 |
86,296 |
Total current liabilities |
182,018 |
122,006 |
Deferred revenue – non-current |
85,336 |
49,512 |
Other long-term liabilities |
7,542 |
7,215 |
Stockholders' equity: |
||
Preferred stock |
- |
- |
Common stock |
7 |
7 |
Additional paid-in capital |
357,289 |
309,092 |
Accumulated other comprehensive income |
23 |
- |
Accumulated deficit |
(93,438) |
(80,028) |
Total stockholders' equity |
263,881 |
229,071 |
Total liabilities and stockholders' equity |
$ 538,777 |
$ 407,804 |
Palo Alto Networks, Inc. |
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Preliminary Condensed Consolidated Statements of Cash Flows |
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(In thousands) |
||
(Unaudited) |
||
Nine Months Ended |
||
2013 |
2012 |
|
Cash flows from operating activities |
||
Net income (loss) |
$ (13,410) |
$ 5,336 |
Adjustments to reconcile net income (loss) to |
||
Depreciation and amortization |
7,221 |
4,193 |
Amortization of investment premiums, net of accretion of purchase discounts |
1,445 |
- |
Share-based compensation for equity based awards |
29,608 |
7,350 |
Excess tax benefit from share-based compensation |
(177) |
- |
Change in fair value of preferred stock warrants |
- |
958 |
Changes in operating assets and liabilities: |
||
Accounts receivable, net |
(45,847) |
(9,119) |
Prepaid expenses and other assets |
(5,991) |
(9,251) |
Accounts payable |
3,347 |
5,079 |
Accrued and other liabilities |
13,097 |
3,834 |
Deferred revenue |
83,496 |
49,397 |
Reimbursement of leasehold improvements |
- |
701 |
Net cash provided by operating activities |
72,789 |
58,478 |
Cash flows from investing activities |
||
Purchase of property, equipment, and other assets |
(16,595) |
(11,281) |
Purchase of investments |
(310,683) |
- |
Proceeds from sales of investments |
13,491 |
- |
Proceeds from maturities of investments |
117,150 |
- |
Net cash used in investing activities |
(196,637) |
(11,281) |
Cash flows from financing activities |
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Excess tax benefit from share-based compensation |
177 |
- |
Changes in restricted cash |
- |
1,221 |
Proceeds from exercise of stock options |
11,195 |
1,477 |
Proceeds from employee stock purchase plan |
6,267 |
- |
Proceeds from settlement of note receivable |
- |
637 |
Repurchase of restricted common stock from employees |
(71) |
(63) |
Payments of initial public offering costs |
(2,698) |
(703) |
Net cash provided by financing activities |
14,870 |
2,569 |
Net increase (decrease) in cash and cash equivalents |
(108,978) |
49,766 |
Cash and cash equivalents - beginning of period |
322,642 |
40,517 |
Cash and cash equivalents - end of period |
$ 213,664 |
$ 90,283 |
SOURCE
Jennifer Jasper Smith, Head of Corporate Communications, Palo Alto Networks, +1-408-638-3280, jjsmith@paloaltonetworks.com, or Investor Relations Contact, Chris Danne/Maria Riley, The Blueshirt Group, +1-415-217-7722, ir@paloaltonetworks.com