Palo Alto Networks (PANW) Tops Q2 EPS by 18c, Beats on Revenues; Offers FY18 EPS/Revenue Above Consensus

Palo Alto Networks (NYSE: PANW) reported Q2 EPS of $0.97, $0.18 better than the analyst estimate of $0.79. Revenue for the quarter came in at $542.4 million versus the consensus estimate of $524.98 million.

Financial Outlook

Palo Alto Networks provides guidance based on current market conditions and expectations.

Fiscal third quarter 2018 and fiscal year 2018 guidance includes the company\'s new non-GAAP effective tax rate under the Tax Cuts and Jobs Act. The new quarterly non-GAAP effective tax rate is 22 percent, a reduction from our previously guided non-GAAPeffective tax rate of 31 percent.

For the fiscal third quarter 2018, we expect:

• Total revenue in the range of $538 to $548 million, representing year-over-year growth between 25 percent and 27 percent. Product revenue in the range of $193 to $196 million, representing year-over-year growth between 18 percent and 19 percent.
• Total billings in the range of $665 to $680 million, representing year-over-year growth between 22 percent and 25 percent.
• Diluted non-GAAP net income per share in the range of $0.94 to $0.96 using 94.5 to 96.5 million shares; this includes an approximately $0.11 benefit from the new non-GAAP effective tax rate of 22 percent.

For the fiscal year 2018, we expect:

• Total revenue in the range of $2.190 to $2.220 billion, representing year-over-year growth between 24 percent and 26 percent. Product revenue in the range of $810 to $820 million, representing year-over-year growth between 14 percent and 16 percent.
• Total billings in the range of $2.715 to $2.770 billion, representing year-over-year growth between 18 percent and 21 percent.
• A full-year weighted average non-GAAP effective tax rate of approximately 24 percent, which includes fiscal first quarter 2018 at the prior non-GAAP effective tax rate of 31 percent and the remainder of the year at the new, lower non-GAAP effective tax rate of 22 percent.
• Using this tax range, diluted non-GAAP net income per share in the range of $3.84 to $3.91 using 94 to 96 million shares; this includes an approximately $0.36 benefit from the new full-year non-GAAP effective tax rate.

GUIDANCE:

Palo Alto Networks sees FY2018 EPS of $3.84-$3.91, versus the consensus of $3.40. Palo Alto Networks sees FY2018 revenue of $2.19-2.22 billion, versus the consensus of $2.17 billion.

For earnings history and earnings-related data on Palo Alto Networks (PANW) click here.

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