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Full Revenue:$ 2.26 billion, grew 14 % year-over-year.
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Product Income Development: 8 % increase.
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Services Revenue Growth: 16 % increase, with subscription revenue up 20 % and support revenue up 8 %.
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Geographical Revenue Growth: Americas up 13 %, EMEA up 18 %, JPAC up 17 %.
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Gross Margin: 76.6 %.
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Operating Margin: Back of domestic targets, assistance raised for the year.
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Non-GAAP EPS:$ 0.81.
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GAAP EPS:$ 0.38.
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Adjusted Free Cash Flow: Over$ 509 million.
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Remaining Performance Obligation ( RPO ):$ 13 billion, grew 21 %.
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Recent Recruitment:$ 6.1 billion, grew 17 %.
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Next-Generation Security Annual Recurring Revenue ( NGS ARR ):$ 4.78 billion, grew 37 %.
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Large Deals: 74 accounts with transactions over$ 5 million, 32 accounts with transactions over$ 10 million.
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Guidance for Fiscal Year 2025: Revenue$ 9.14 billion to$ 9.19 billion, NGS ARR$ 5.52 billion to$ 5.57 billion, Operating Margin 28 % to 28.5 %, Non-GAAP EPS$ 3.18 to$ 3.24, Free Cash Flow Margin 37 % to 38 %.
Release Date: February 13, 2025
Satisfy refer to the full profits call record for the entire text of the earnings call.
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Palo Alto Networks Inc ( NASDAQ: PANW) outperformed both top and bottom-line expectations for Q2 2025, with strong revenue and operating margin results.
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The business saw significant growth across its portfolio as a result of important international deals and solid SASE, software firewall, and XIM performance.
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Performance activities, including AI efforts, have allowed PANW to increase its operating margin and EPS guidance for the year.
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The company achieved a 37 % rise in NGS ARR, driven by power across advanced membership, SASE, and Cortex.
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With a notable increase in large platformization deals and customer adoption, Palo Alto Networks Inc. ( NASDAQ: PANW) has made significant progress in its platformization strategy.
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Due to the impact of more recent SaaS offerings and one-time inventory costs, total margins were significantly lower.
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Despite good trends in large platformization deals, there was a not-unique decline in online new Val growth over the previous two quarters.
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Deferred payments, which have increased significantly over the past several years, are a problem that the business has to deal with.
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Some of the newer SaaS products have yet to achieve scale, impacting overall revenue.
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Balanced cash flow efficiency is challenging as more large transactions change to delayed payments.
Q: Can you explain the factors that are responsible for the high free cash flow rates projected for governmental 2027? A: Nikesh Arora, CEO, highlighted that the company’s range and performance in software discounts contribute to better success. Larger offers travel savings in sales, selling, and customer support. The transition to delayed payments, according to Dipak Golechha, CFO, has given more insight into cash flow, with considerable progress being now made in this area.
Q: How does the spread of AI, especially with DeepSeek, influence Palo Alto Networks and the protection landscape? A: Nikesh Arora, CEO, noted that DeepSeek represents a pivotal time for AI, driving research across industries. He argued that it is crucial to secure AI deployments using firewalls and ensuring data safety, adding that advances in AI will continue to increase need for security solutions.
Q: How is AI being used across the Palo Alto Networks program to improve safety benefits, especially in cloud safety? A: Lee Klarich, Chief Product Officer, explained that AI is used to boost detection and prevention in cloud surveillance, enabling real-time safety procedures. The inclusion of AI across the platform improves security outcomes and administrative efficiency, resulting in better win prices over level solution providers.
Q: What factors are there when selling with multi-year billings and leasing options? A: Dipak Golechha, CFO, stated that delayed payments are typically requested in higher-end talks, while smaller purchases and equipment discounts are often paid upfront. With guardrails in place to manage the change and help platformization at scale, the decision is a part of the sales bargaining process.
Q: How does the inclusion of CNAPP with Cortex promote system adoption and integration? A: Lee Klarich, Chief Product Officer, emphasized the importance of integrating CNAPP for real-time sky surveillance and Stack features. This integration improves safety posture, improves security, and improves customer experience, resulting in more organized offerings and better context for automatic actions.
Satisfy refer to the full profits call record for the entire text of the earnings call.
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