Palo Alto Networks reported better-than-expected second quarter results and indicated that demand was helped by the need for AI-driven cybersecurity and enterprises consolidating platforms.

The company reported second quarter net income of $300 million, or 38 cents a share, on revenue of $2.3 billion, up 14% from a year ago. Non-GAAP earnings were 81 cents a share.

Wall Street was expecting Palo Alto Networks to report non-GAAP earnings of 78 cents a share on revenue of $2.24 billion.

CEO Nikesh Arora said performance "was fueled by customers adopting technology driven by the imperative of AI, including cloud investment and infrastructure modernization." The company said it had 75 platformization deals in the second quarter, up 45% from a year ago. A year ago, Palo Alto launched its platform play to consolidate cybersecurity.

The company also said it is on track to halve contract labor to support IT processes due to AI and 80% of engineers are using a coding copilot.

Palo Alto Networks also raised its outlook for the third quarter and fiscal 2025. For the third quarter, Palo Alto Networks projected revenue of $2.26 billion to $2.29 billion, up 14% to 15% from a year ago. Non-GAAP earnings will be between 76 cents a share to 77 cents a share. Next-gen security annual recurring revenue will grow between 33% and 34%.

For fiscal 2025, Palo Alto Networks projected revenue between $9.14 billion and $9.19 billion, up 14% from fiscal 2024. Non-GAAP earnings for fiscal 2025 will be $3.18 to $3.24 a share.

Separately, the company announced two new board members. Helle Thorning-Schmidt, former prime minister of Denmark, and Ralph Hamers, former chief executive officer of UBS Group AG and ING Group, will join the company's expanded board of directors.

Palo Alto Networks also launched Cortex Cloud, which is the combination of the company's Prisma Cloud and Cortex CDR. The platform will use AI to prioritize and automate remediation and improve a new user experience.

Cortex Cloud includes application security, risk management tools with AI, the ability to stop attacks in real time and a security operations center. Existing Prisma Cloud customers will be upgraded to Cortex Cloud.

Shortlists that include Palo Alto Networks:

Business Research Themes

Data to Decisions, Digital Safety, Privacy, and Cybersecurity

Roles

Chief Information Officer, Chief Information Security Officer

Tags

AI CyberSecurity, Palo Alto Networks, #AI #artificialintelligence #generativeAI