Palo Alto Networks, the global leader in cybersecurity solutions, on Friday reported its financial results for the past quarter and full fiscal year, the last four quarters ending July 31, 2023. The company reported impressive fourth quarter revenue growth of 26% year-over-year, representing total revenue of $2 billion. This strong growth continued throughout the fiscal year, with sales increasing by 25% to a total of $6.9 billion. “Billings” also posted a positive performance, with an 18% increase in the fourth quarter to $3.2 billion and a 23% increase for the full fiscal year to $9.2 billion. Billings represent the money that is actually billed to customers in a period.
In addition, the “Remaining performance obligation”, or RPO, increased by an impressive 30% year-on-year to $10.6 billion. In simplified terms, RPO can be thought of as equal to deferred revenue plus backlog.
Nikesh Arora, chairman and CEO of Palo Alto Networks, emphasized the importance of the company’s strategic focus on platformization and AI-based security solutions. The company was particularly pleased with the positive response in the market.
Dipak Golechha, Chief Financial Officer, highlighted strength in revenue consistent with remaining performance liability and next-generation safety ARR. The abbreviation stands for Annual Recurring Revenue. The CFO also highlighted the progress in the company’s financial transformation, which resulted in an increase in operating margins of more than 5% during the year.
The outlook for the upcoming fiscal year 2024 is promising, with expected first quarter revenues of $2.05 billion to $2.08 billion, total revenues of $1.82 billion to $1.85 billion and expected non-GAAP diluted net income per share of $1.15 to $1.17.
For the full fiscal year 2024, the company expects strong growth with revenues of $10.9 billion to $11.0 billion and total revenues of $8.15 billion to $8.20 billion. Expected non-GAAP diluted net income per share is between $5.27 and $5.40, accompanied by an adjusted free cash flow margin of 37% to 38%.
Despite the promising outlook, the company emphasizes the risks and uncertainties given the complex market conditions. But Palo Alto Networks’ recent results underscore its strength in cybersecurity and its ability to operate successfully in a dynamic market environment.