What happened

Shares of Palo Alto Networks (PANW -1.77%) climbed 9.7% on Friday after the cybersecurity leader reported impressive sales growth metrics and raised its full-year profit projections. 

So what

Palo Alto Networks' revenue rose 29% year over year to $1.4 billion in its fiscal 2022 third quarter, which ended on April 30. CEO Nikesh Arora said during a conference call with analysts that "increased macroeconomic volatility and geopolitical uncertainty" were boosting demand for effective cybersecurity solutions. 

The company's billings -- a key metric that includes subscription and support sales – surged 40% to $1.8 billion. "This is the highest billings growth we have reported looking back over the past four years and was driven both by strong demand for our next-generation security offerings and strong customer commitments to our network security business," Arora said.

People monitoring cybersecurity software.

Image source: Getty Images.

The revenue gains helped Palo Alto Networks' net loss narrow to $73.2 million from $145.1 million in the year-ago quarter. On an adjusted basis, its net income jumped 38% to $193.1 million, or $1.79 per share. That beat Wall Street's estimates, which called for adjusted earnings of $1.68 per share. 

Now what

These strong results and encouraging ongoing sales trends prompted Palo Alto Networks to lift its full-year financial forecast. Management now expects total revenue to grow by roughly 29% to $5.5 billion in fiscal 2022. The company also guided for adjusted earnings per share of $7.43 to $7.46, up from a prior target of $7.23 to $7.30. 

"Our drive to deliver strong total shareholder return in Q3 was headlined by our revenue growth, while we also balanced operating margin expansion and free cash flow conversion," chief financial officer Dipak Golechha said. "We look forward to continuing this balance as we close out the year and look to FY23."