Palo Alto Networks Inc (NYSE:PANW) saw its two-month-long rally stall out Tuesday evening thanks to a mixed bag in its fiscal-fourth-quarter earnings report. PANW stock was down 2%, cutting short a roughly 15% run since July 1.
Palo Alto’s Q4 revenues came in 41% higher to $400.8 million to top estimates of $389.7 million. And while the company widened its net loss to $54.5 million, adjusted earnings of 50 cents per share were up nearly 80% to come in line with analyst expectations.
Guidance was disappointing, however. Palo Alto expects Q1 profits of 51 cents to 53 cents per share on $396 million to $402 million in sales. Wall Street is looking for 56 cents per share of PANW stock on revenues of $402.23 million.
Costs of revenue continued to head higher as well. Q4’s total cost of revenue reached $101.7 million … but total gross margins of 74.6% marked another quarterly improvement. Operating expenses rose as much as revenue, however. That led to an 18% expansion in the company’s net loss.
Nonetheless, CEO Mark McLaughlin focused on the positives:
“Fourth quarter 2016 was a very strong finish to yet another record fiscal year. Revenue for the year was $1.4 billion, up 49 percent year over year, our customer base expanded to approximately 34,000 customers, we extended our platform capabilities both with new offerings and strategic partnerships, and we established new routes to market while driving significant growth across our partner ecosystem.”
PANW shares had been recovering rapidly from their late June lows, but with Tuesday evening’s losses, the stock now sits about 20% in the red for the year-to-date.
