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.
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.
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."
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.