According to a recent market report, the global cybersecurity market is expected to expand 10% annually over the period 2020 to 2027. Security player Palo Alto Networks (NYSE: PANW) recently announced its milestone quarter where it crossed a billion dollars in revenues.

Palo Alto Network’s Financials
Second-quarter revenues grew 25% over the year to $1 billion, significantly ahead of the Street’s estimate of $985.648 million. Net loss was $142.3 million or $1.48 per share compared with a loss of $73.7 million or $0.75 per share a year ago. On an adjusted basis, net income was $1.55 per share compared with a net income of $1.19 per share a year ago. The market was looking for a net income of $1.43 per share.

By segment, Product revenues grew 3.3% to $254.7 million. Subscription and support revenues grew 33.7% to $762.2 million.

Among other metrics, billings improved 22% to $1.2 billion and Deferred revenues grew 30% to $4.2 billion.

For the third quarter of fiscal 2021, Palo Alto expects revenues of $1.05-$1.06 billion with an EPS of $1.27-$1.29. For the year, Palo Alto expects revenues between $4.15-$4.2 billion and an EPS of $5.80-$5.90. The market was looking for revenues of $1.05 billion for the quarter with EPS of $1.28 and revenues of $4.18 billion for the year with an EPS of $5.86.

Palo Alto Network’s Acquisitions

During the quarter, Palo Alto continued its acquisition spree and announced the acquisition of The Crypsis Group for $265 million. Founded in 2015 by Justin Jordan, Virginia-based Crypsis fights cybercrime by defending against and responding to cybersecurity threats. It will integrate Crypsis’s technology to enhance Cortex XDR to further enhance its ability to safeguard organizations. Crypsis’s funding details are not disclosed.

The Crypsis acquisition will allow Palo Alto to strengthen Cortex XDR’s ability to collect rich security telemetry as well as manage breaches and initiate rapid response sequences. It will also be able to fuel Cortex XDR with a continuous feedback loop between incident response engagements.

Besides acquisitions, Palo Alto continued to expand its network security business by shifting toward software and SaaS, making it more predictable and sustainable. Rather than building solutions only as hardware, Palo Alto has chosen to offer security services and software subscriptions. Over the last two years, it has doubled its security subscriptions from four to eight with the introduction of DNS, SD-WAN, IoT, and DLP. It is also seeing significant progress with DNS, which has acquired nearly 5,000 customers since launch. The new subscriptions, coupled with higher-tier support levels have allowed it to increase its next-generation firewall support and security subscription revenue.

Recently, Palo Alto also announced the addition of CloudBlades, a SASE platform, that allows for an API platform for seamless third-party service integration. Prisma Access can now enable access to all applications, deliver best-in-class security to meet enterprise security needs, and provide a user experience that maintains or even improves worker productivity.

Palo Alto’s stock is trading at $358.31 with a market capitalization of $34.8 billion. It was trading at a 52-week high of $403.00 earlier this month. The stock hit a 52-week low of $125.47 in March last year.