Palo Alto Networks (NYSE:PANW) just reported fiscal first-quarter 2016 results, and as per usual, the network security-specialist didn't disappoint. In fact, Palo Alto exceeded expectations for the sixth quarter in a row, and demonstrated its growth engines have arguably never been stronger.

Let's take a closer look at what Palo Alto accomplished in its latest quarter.

Palo Alto Networks results: The raw numbers

Metric

Fiscal Q1 2016 Actuals

Fiscal Q1 2015 Actuals

Growth (YOY)

Revenue

 $297.2 million

 $192.3 billion

 54.6%

Adjusted Net Income

 $31.6 million

 $12.8 million

 146.9%

Adjusted EPS

 $0.35

 $0.15

 133.3%

Data source: Palo Alto Networks.

What happened with Palo Alto Networks this quarter?

  • Each figure easily beat Palo Alto's guidance (provided three months ago), which called for lower revenue of $280 million to $284 million, and adjusted EPS of $0.31 to $0.32.
  • Revenue included a 45.5% increase in product sales to $147.7 million, and 64.6% growth from services to $149.5 million.
  • Deferred revenue grew 71% to $804.5 million.
  • Billings -- or revenue plus the change in deferred revenue -- rose 61.3% year over year to $388 million.
  • As Palo Alto focuses on investing for growth and taking market share, keep in mind it remains unprofitable based on generally accepted accounting principles.
    • GAAP net loss widened to $38.7 million, or $0.45 per share, from $30.1 million, or $0.38 per share in the same year-ago period.
  • But Palo Alto is cash-flow positive: Cash flow from operations rose 95.9% to $146.7 million.
  • Free cash flow climbed 84.3% to $127.2 million.
  • Launched Aperture, a security-as-a-service product that helps organizations implement and strengthen security for software-as-a-service applications like Box, Dropbox, Google Drive, and Salesforce.
  • Announced commercial availability of AutoFocus, a threat intelligence cloud service to help users better understand which attacks require immediate response and prevent future attacks.
  • Signed strategic alliances with Telefonica and Trustwave, designed to bring next-gen managed security services to multi-national businesses and government agencies.

What management had to say 
Palo Alto CEO Mark McLaughlin stated:

We had a very strong start to fiscal year 2016 that included achieving our highest fiscal first quarter revenue and billings year-over-year growth rates since going public. We believe that our success is due to our unwavering commitment to solving our customers' most complex security challenges with the industry's most innovative technology. Security remains a strategic consideration for companies globally, and it is clear from our results that our natively integrated and automated next-generation platform is resonating very well as the long-term strategic answer for customers' security needs.

Palo Alto CFO Steffan Tomlinson elaborated that record fiscal first-quarter revenue was driven by a combination of "robust" growth in new customers and expansion within Palo Alto's existing customer base, which in turn resulted in strong demand for both hardware applications and subscription services. 

"As the business scales," Tomlinson added, "the power of our hybrid-SaaS model is becoming increasingly evident."

Looking forward 
For the current quarter, Palo Alto anticipates revenue of $314 million to $318 million, representing year-over-year growth of roughly 44% to 46%. That should translate to adjusted earnings per share of $0.38 to $0.39.

Given Palo Alto's propensity for under-promising and over-delivering, however, it seems fair to assume Wall Street will likely ratchet up its own expectations accordingly ahead of Palo Alto's next report three months from now. In the meantime, this continued strong performance should leave Palo Alto investors with plenty of reasons to celebrate.

Steve Symington has no position in any stocks mentioned. The Motley Fool recommends Palo Alto Networks and Salesforce.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.