What happened

Shares of cybersecurity company Palo Alto Networks (NYSE:PANW) jumped on Friday following a better-than-expected fiscal fourth-quarter report. Palo Alto beat analyst estimates for both revenue and earnings, posting double-digit sales and adjusted earnings growth. The stock was up 11.5% at noon.

So what

Palo Alto reported fourth-quarter revenue of $509.1 million, up 27% year over year and nearly $22 million higher than the average analyst estimate. Product revenue jumped 11.1% to $212.3 million, while subscription and support revenue soared 41.5% to $296.8 million. Billings grew 17% year over year to $670.8 million, while deferred revenue surged 43% to $1.8 billion.

The PA-7080 firewall.

The PA-7080 firewall. Image source: Palo Alto Networks.

Non-GAAP earnings per share came in at $0.92, up from $0.66 in the prior-year period and $0.13 better than analysts expected. On a GAAP basis, Palo Alto posted a net loss of $0.42 per share, worse than a net loss of $0.35 per share during the fourth quarter of last year. Stock-based compensation, as well as a charge related to the relocation of corporate headquarters, was responsible for the discrepancy.

Palo Alto CEO Mark McLaughlin summed up fiscal 2017: "We are pleased to have ended fiscal 2017 with a record fourth quarter, including market-leading revenue growth and the highest number of new customer additions recorded in a single quarter by the company. For the fiscal year, revenue was $1.8 billion, up 28 percent year over year; our customer base grew to more than 42,500; and we delivered the largest product and features launch in our history."

Now what

Palo Alto expects to produce first-quarter revenue between $482 million and $492 million, up 21% to 24% year over year, along with non-GAAP EPS between $0.67 and $0.69. Fiscal 2018 revenue is expected between $2.125 billion and $2.165 billion, up 21% to 23%, and non-GAAP EPS is expected between $3.24 and $3.34.

With both revenue and adjusted earnings coming in ahead of analyst expectations, and with guidance calling for continued double-digit growth in fiscal 2018, investors had plenty of reasons to bid up the stock.

Timothy Green has no position in any of the stocks mentioned. The Motley Fool recommends Palo Alto Networks. The Motley Fool has a disclosure policy.