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Monday morning, Palo Alto Networks Inc. (NYSE: PANW) reported record-breaking Q2 2014 earnings, sending shares flying more than 6.41% as of 10:50 a.m. EST.
Total revenue for the company's second quarter grew 46% year over year to a record $141.1 million, beating Wall Street estimates of $135.6 million. Revenue is up $44.6 million compared to the same quarter in 2013, and deferred revenue grew 72% year over year to reach a record $324.6 million.
That's not the end of PANW's record-breaking numbers this quarter. Billings grew 50% year over year to reach record $186.7 million. Additionally, recurring subscription and services revenue grew 74% year over year to reach a record $60.2 million.
The company posted earnings per share (EPS) of $0.10 per share, up from $0.05 the year before, beating Wall Street estimates by $0.01.
The secret to Palo Alto Networks' success isn't actually very secret, but it's an urgent priority in 2014 for companies, governments, private citizens, and investors alike...
Quality Cybersecurity Is a Must
The growing threat of cyber attacks is of significant concern in 2014.
Attacks on companies increased 42% in 2012 from a year before, and businesses are projected to spend $67 billion on information security this year, according to tech research firm Gartner. Security spending will increase by around 39%, to $93 billion, by 2017.
Note: The $67 billion cybersecurity industry is poised for a boom - and you can get in before it takes off. Here are the best cybersecurity stocks to buy now.
So far in 2014:
- On Jan. 11, luxury retailer Neiman Marcus confirmed that hackers gained access to their customer service database and made unauthorized charges throughout the holiday season. The company first reported that suspicious activity started in mid-December, but more recent reports say it started in July 2013 and was not fully contained until Jan. 12.
- On Jan. 13, retail giant Target Corp. (NYSE: TGT) issued a written apology for a cybersecurity breach that included payment data for around 40 million customers who had used credit or debit cards at their retail outlets between Nov. 27 and Dec. 15. Target discovered in January that the breach also included home addresses, phone numbers, email addresses, and names for at least 70 million customers, meaning roughly 110 million customers were impacted overall.
- And on Jan. 14, JPMorgan Chase & Co. (NYSE: JPM) Chief Executive Officer Jamie Dimon said that the bank is replacing around 2 million debit and credit cards because of the large number of recent cybersecurity attacks.
And Palo Alto Networks is in the perfect position to capitalize on these developments...
Palo Alto (NYSE: PANW) to Soar in 2014
Palo Alto Networks provides a network security platform that allows enterprises, service providers, and government entities to secure their networks.
Since going public in July 2012 at $42 per share, its stock climbed to more than $72 per share by September that same year. Then it slid all the way back to its opening price as competitor technology and numbers began catching up.
But on Friday, the stock posted an all-time high of $74.28 per share, and during the day's trading today it reached as high as $79.99.
"We reported very good Q2 results, driven by strong customer demand for our integrated and automated enterprise security platform," Palo Alto Networks president and CEO Mark McLaughlin said at earnings release. "Enterprises around the world are accelerating their investments in security to enable them to improve their business and protect them against the risks stemming from cyber attacks. We see evidence of this in continued new customer adoption and rapid expansion of our platform among existing customers."
The company did not publish any guidance today with earnings release, but consensus estimates for Q3 2014 call for EPS of $0.11 on revenue of $142.01 million. For the full fiscal year, EPS is expected to show $0.42 on revenue of $560.01 million.
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- Palo Alto Networks:
Second Quarter 2014 Financial Results