Palo Alto Networks Q2 Revenue Rises 15%, EPS Beat Overshadowed by Soft Guidance
Palo Alto Networks reported Q2 revenue of $2.59 billion (up 15% y/y) and adjusted EPS of $1.03, surpassing expectations, while remaining performance obligations rose 23% to $16 billion and next-generation security ARR climbed 33% to $6.3 billion. However, shares fell over 8% in after-hours trading after management guided Q3 adjusted EPS of $0.78–$0.80, below the consensus $0.92, and cut full-year EPS to $3.65–$3.70, despite raising revenue outlook to $11.28–$11.31 billion.
1. Q2 Financial Performance
Palo Alto Networks delivered Q2 revenue of $2.59 billion, up 15% year-over-year, and adjusted EPS of $1.03, beating forecasts. Remaining performance obligations rose 23% to $16 billion and next-generation security ARR jumped 33% to $6.3 billion, driven by platform consolidation and AI demand.
2. Guidance Update
Management guided Q3 adjusted EPS of $0.78–$0.80, below the $0.92 consensus, while forecasting revenue of approximately $2.94 billion. Full-year revenue outlook was raised to $11.28–$11.31 billion even as full-year adjusted EPS forecast was trimmed to $3.65–$3.70.
3. Stock Reaction
Shares closed down 2.07% at $163.50 and plunged 8.4% in after-hours trading to $149.75. The stock has traded between $144.14 and $223.61 over the past 52 weeks, reflecting investor concerns over earnings trajectory.