- Nikesh Arora, CEO of Palo Alto Networks, told CNBC’s Jim Cramer that his company is still seeing strong demand for its cybersecurity services despite weaker-than-expected billing forecasts.
- The company’s share price fell nearly 6% in after-hours trading.
In a Wednesday interview with CNBC’s Jim Cramer, Palo Alto Networks CEO Nikesh Arora said demand remains strong even though the company gave weaker-than-expected billing guidance.
The cybersecurity company reported its first-quarter results after the market closed on Wednesday, beating Wall Street’s revenue targets. However, weak settlement forecasts caused the stock to fall nearly 6% in after-hours trading.
Arora said the market was “a little unsettled” by the guidelines, but added that customers would pay both annually and in advance for several years. Rising interest rates have led to customers having “longer conversations about when to pay us and whether or not we should finance them,” Arora said.
“This only has a cosmetic impact on the billing numbers and hence creates confusion in the market,” Arora said. “But there is no need to be confused, there is huge demand out there, cybersecurity attacks are unfortunately on the rise.”
He also pointed out that the settlement forecast may not be the most important metric that Wall Street should consider.
“We achieve all the profitability and cash flow metrics in the market,” he said. “Billings are an indicator of future revenue, and the better indicator of future revenue is RPO, remaining performance obligations, which we increased by 26%.”
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Disclaimer The CNBC Investing Club Charitable Trust holds shares of Palo Alto Networks.
Originally posted 2023-11-16 05:50:29.