Palo Alto Networks Builds Through Acquisition To Take On Competition

Cybersecurity player Palo Alto Networks (NYSE: PANW) recently announced its third-quarter results that surpassed market expectations. The company continues to build its portfolio through acquisitions within the highly fragmented industry. It is focused on securing the cloud environments for its enterprise customers as it builds its arsenal to take on big competitors like Cisco in the space.

Palo Alto Network’s Financials
Palo Alto Network’s third-quarter revenues grew 28% over the year to $726.6 million, ahead of the market’s forecast of $704 million. Adjusted earnings of $1.31 were up 26% and surpassed the Street’s forecast of $1.25.

By segment, Product revenues grew 28% to $278.4 million and Subscription and Support revenues grew 28% to $448.2 million. SaaS-based Subscription revenues rose 35% to $258.8 million and Support revenues increased 21% to $189.9 million. Billings grew 13% to $821.9 million.

For the current quarter, Palo Alto Networks expects revenues of $795-$805 million with an adjusted EPS of $1.41-$1.42. The market was looking for revenues of $793.5 million with an EPS of $1.55 for the quarter.

Palo Alto Network’s Acquisitions

Palo Alto Networks has continued to add to its portfolio through acquisitions. Earlier last month, it announced the acquisition of container security company Twistlock and serverless security company PureSec.

Portland, Oregon-based Twistlock was founded in 2015 by Ben Bernstein and Dima Stopel. Twistlock is an automated and scalable container cybersecurity platform that provides precise, actionable vulnerability management for run-time protection and firewalls. Its services help protect applications across the development lifecycle and into production. Twistlock has been built for containers, serverless, and other leading technologies and provides developers with the speed they want and the technology offices with the control they need.

Prior to the acquisition, Twistlock was privately held and had raised $63 million from investors including Dell Technologies Capital, Rally Ventures, ICONIQ Capital, YL Ventures, Polaris Partners, TenEleven Ventures, and Rally Ventures. Its annual revenue is estimated to be $2.5 million. The $410 million acquisition of Twistlock will help Palo Alto expand within the container security segment and provide access to over 400 customers.

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