Palo Alto gained 3,000 new customers during its fourth quarter, bringing its total number of customers to 42,500 worldwide. “This was by far the strongest quarter for new customer adds in our history…” said Mark McLaughlin, Palo Alto Networks CEO, according to a Seeking Alpha transcript.
Examples of the company’s customer wins in the quarter include a number of competitive displacements. For example, it won an eight-figure deal replacing Cisco equipment at “one of the world’s largest pharmaceutical companies,” McLaughlin said. Additionally, the company won deals replacing Check Point security equipment as well as McAfee endpoints.
McLaughlin attributed the customer wins to better sales execution and a general move toward security platforms.
Additionally, the company introduced a number of new products. Its GlobalProtect cloud service allows customers to extend the reach of Palo Alto security to remote networks and mobile users. The company also introduced a new application framework that enables users to build cloud-based security services through a suite of application programming interfaces (APIs). Lastly, the company introduced a logging service, which allows customers to collect analytics generated from its platform.
It is also worth noting that Palo Alto CFO Steffan Tomlinson announced his plans to retire from the company once a replacement has been found.
Running the Numbers
For its fourth quarter 2017, Palo Alto reported revenues of $509.1 million — a 27 percent increase year-over-year.
Non-GAAP net income for its fourth quarter 2017 was $85.5 million, or $0.92 per diluted share, compared to $60.3 million, or $0.66 per diluted share for the same period last year.
Looking to its first quarter 2018, the company expects revenues to be in the range of $482 million to $492 million, representing year-over-year growth between 21 percent and 24 percent. Additionally, the company expects product revenue for its first quarter of 2018 to be in the range of $170 million to $173 million, representing a year-over-year increase of 4 to 6 percent.