Palo Alto Networks’ revenue grew 29% year over year to $1.4 billion for the fiscal third quarter of 2022, and its CEO Nikesh Arora attributed the growth to strong cybersecurity market demand and its “unique three-platform approach.” 

Arora noted that 48% of the security giant’s global 2000 customers have transacted on all three of its major platforms — Strata, Prisma, and Cortex in the earnings call.

During the quarter, Palo Alto Networks rolled out the Prisma Cloud Supply Chain Security product that wraps several of the vendor’s existing security features into a single software platform. The vendor also announced its partnership with Amazon Web Services (AWS) to natively integrate its next-generation firewall into the public cloud for the first time.

“We announced our second partnership with a hyperscaler to embed our network security into the fabric of their cloud,” Arora said. “This relationship with AWS follows the launch of Cloud IDS on the Google Cloud Platform last July.”

The vendor’s firewall as a platform billings jumped 25% year over year in the quarter and the hybrid workforce bolstered its firewall hardware sales.

“One of the misunderstandings with the move to the cloud is that everyone thought that would be the death of hardware,” Chief Product Officer Lee Klarich argues. “But the reality is, you have all of these users that need to now reach applications running in the cloud.”

This triggers the urge to upgrade their firewall to secure higher bandwidth connectivity, he added. “It actually is a positive trend toward hardware sales and hardware requirements, especially as we come out of the pandemic and more and more companies are moving back toward a hybrid workforce.”

“Despite us moving to the cloud, we've had to upgrade our firewalls in our headquarters,” Arora echoed. 

Arora noted the impact of the increased macroeconomic volatility and geopolitical uncertainty in the call, but he didn't consider the current inflation concerns as a big hurdle to the vendor.

“About 2.5 years ago, two years ago when the pandemic hit, believe it or not, there were more industries impacted by the pandemic than are impacted right now by inflation concerns,” he said.

“So we're not seeing the pressure from an inflation or reduced economic activity perspective,” Arora said, adding that instead, “You're seeing way more security awareness and concern more than I've ever seen.”

However, like everyone else in the industry, the vendor faces supply chain issues. “The cost pressures are really all within the supply chain area,” CFO Dipak Golechha said. 

Arora expects the supply chain challenges “are likely to persist for yet another year.”