What happened

Shares of Palo Alto Networks (PANW 5.33%) charged sharply higher Friday morning, surging by as much as 10.5%. As of 10:35 a.m. ET, the stock was up 8.3%.

The catalyst that sent the cybersecurity specialist higher was the release of its quarterly financial results, which were better than many investors had hoped for -- particularly given the ongoing macroeconomic headwinds.

So what

For its fiscal 2023 first quarter, which ended Oct. 31, Palo Alto Networks generated revenue of $1.6 billion, up 25% year over year, driven by strong momentum from existing customers expanding their relationships with the company. This resulted in adjusted earnings per share of $0.83. On a GAAP basis, the company was profitable for the second consecutive quarter, and it expects to remain profitable for this fiscal year. 

To give those numbers context, analysts' consensus estimates were for revenue of $1.55 billion and earnings per share of $0.69, so Palo Alto Networks easily sailed past expectations.  

For insight into the company's growth potential, investors can look at its total billings -- contractually obligated sales that haven't yet been recorded as revenue. And based on that metric, the future looks promising. In the fiscal first quarter, billings grew to $1.7 billion, up 27% year over year and outpacing revenue growth, which suggests the company will continue to deliver robust results well into the future.

Another positive indicator is the number of clients that spent more than $1 million with Palo Alto over the last 12 months. That figure climbed 23% to 1,262. 

Now what

Palo Alto Networks provided a strong outlook for the current quarter and raised its full-year guidance. For its fiscal second quarter, management is forecasting revenue of between $1.63 billion and $1.66 billion, which would represent year-over-year growth of 25% at the midpoint. The company also expects adjusted earnings per share of $0.77.

For fiscal 2023, management is guiding for revenue to rise by roughly 26% to $6.88 billion. Palo Alto Networks also expects total billings of roughly $9.02 billion at the midpoint of its guidance, which would represent growth of about 21%.

Given its robust results and increased guidance, Palo Alto Networks is well-positioned to continue its strong growth, particularly given the macroeconomic headwinds, which explains why investors are bidding the stock higher.