Palo Alto Networks Drops 7% on Soft Billing Outlook

Palo Alto Networks (NASDAQ:PANW) experienced a 7% decline in its shares intra-day today, following the release of strong first-quarter results but providing billing guidance for the second quarter and full year that fell short of expectations.

The company announced a 20% year-over-year increase in total revenue for the first quarter, reaching $1.9 billion and surpassing the $1.84 billion consensus. Its non-GAAP net income rose to $1.38 per share, up from $0.83 in the same period last year and above the expected $1.16.

For the upcoming second quarter, Palo Alto Networks forecasts revenue between $1.955 billion and $1.985 billion, compared to the $1.97 billion consensus. The projected total billings for the quarter are set to be in the range of $2.335 billion to $2.385 billion, which is below the consensus estimate of $2.43 billion. The company anticipates non-GAAP net income per share to be between $1.29 and $1.31, which is above the consensus of $1.25.

Looking at the full fiscal year, the company expects revenue to be between $8.15 billion and $8.20 billion, compared to the Street estimate of $8.18 billion. The total billings for the year are anticipated to be between $10.7 billion and $10.8 billion, revised from the previous estimate of $10.9 billion to $11 billion and below the consensus of $10.96 billion.