Tag Archives: pfpt

Palo Alto Networks Q2 Beats Amid Market Share Gains

Palo Alto Networks ( PANW ) stock rocketed Thursday as the cybersecurity firm’s model of providing a simplified product boosted market-share gains and helped fiscal Q2 results as well as Q3 sales guidance top projections. For its fiscal Q2 ended Jan. 31, Palo Alto’s earnings per share soared 110.5% to 40 cents, beating estimates by a penny. Sales jumped 54% to $334.7 million, above views of $318.3 million. Both measures, however, decelerated for the second consecutive quarter. Shares closed up 9.7% and rallied another 4% in after-hours trading. Customers aren’t interested in puzzle-piecing together their security solution, CEO Mark McLaughlin said on a conference call. That platform focus drove Palo Alto to add 2,000 new customers to its 30,000-strong client base. He also noted a “paradigm shift” from reactive security to the platform. ‘Buying All Elements’ “People are not interested in adding one more agent onto the endpoint,” he said. “So simplified on the endpoint is a driver and it’s very analogous to when people say, ‘Hey, I don’t want firewall and plus, plus, plus (more products).” Billings also surged 62% to $459 million during Q2 as customers began “buying all elements of our platform,” CFO Steffan Tomlinson said on the call. Subscription revenue of $84.3 million grew 68% vs. the year-ago quarter. “We’re seeing customers standardizing on our platform,” McLaughlin said. And with that, “they’re adopting a lot more subscription services than they have in the past.” Current-quarter sales guidance for $335 million-$339 million topped analyst forecasts for $334.9 million, but Palo Alto’s EPS ex items outlook for 41-42 cents missed Wall Street expectations for 45 cents. The company’s Q3 sales would be up 44% at the midpoint of guidance, and EPS ex items would rise 80% at the midpoint. But both metrics would also decelerate for the third consecutive quarter. On a seasonal basis, Q1 and Q3 tend to be weaker, Tomlinson said. While McLaughlin said security remains a top priority globally, IBD’s 41-company Computer Software-Security group has fallen 20% year to date. Over the same time period, Palo Alto Networks stock has lost 26%. McLaughlin acknowledged the stock shake-up — likely related to disappointing guidance from tech firms like Tableau ( DATA ) and LinkedIn ( LNKD ) — but said there’s nothing to indicate the macro environment will play out along stock market lines. Taking Market Share Palo Alto also appears to be swiping market share from Cisco ( CSCO ), Check Point Software Technology ( CHKP ), Fortinet ( FTNT ) and Juniper Networks ( JNPR ), McLaughlin said. Of the $300 million in added 2015 revenue across the five vendors, Palo Alto accounted for $120 million. “The average is $58 million,” he said. “I think it’s very obvious we’re taking share from everyone in the space for the math to work out that way.” During Q2, Palo Alto also announced a data-sharing partnership with Proofpoint ( PFPT ), similar to a deepened IBM ( IBM )-Check Point alliance unveiled Thursday. The Palo Alto-Proofpoint alliance will drive automated and coordinated protection across Palo Alto’s platform, Proofpoint’s targeted attack protection and SocialPatrol. The Big Picture Customers are fed up with cybersecurity vendors that try to monetize data threat intelligence, McLaughlin said. “The big picture is the way we monetize intelligence is in the platform itself,” he told analysts. “The more intelligence we have in the platform, the better job we do. And we have an insatiable desire for platform intelligence.” He added: “You better be able to take intelligence and put it in your platform, and do something with it. That’s where the value will lie.”

IBM Cements Security Standing With Redoubled Check Point Alliance

Tech giant IBM ( IBM ) is solidifying its cybersecurity standing by deepening ties to No. 1 pure player Check Point Software Technology ( CHKP ) to pool research and integrate systems, the companies were scheduled to announce Thursday. It’s the most recent in a series of IBM moves to publicly step-up its cybersecurity initiatives. In 2015, IBM drew in $2 billion in cybersecurity sales , just 2.4% of total revenue. But that dollar mark easily topped total sales for Palo Alto Networks ( PANW ), Proofpoint ( PFPT ), Fortinet ( FTNT ) and FireEye ( FEYE ), and 12% year-over-year growth outstripped that of Symantec ( SYMC ) and Check Point. By combining forces, IBM and Check Point aim to thwart what the United Nations estimates is the $445 billion cybercrime underworld. Check Point’s and IBM Security’s researchers will be free to cross company borders to discuss threat data. And several Check Point applications will be folded into IBM technology, Check Point’s vice president of security services, Avi Rembaum, told IBD. The alliance redoubles an 18-year relationship between IBM and Check Point. IBM manages security offerings for clients across the globe, and those implementations sometimes include Check Point products. The two companies have partnered in that regard for the past 18 years. Thus, IBM is keenly apprised of Check Point’s software. Under the new accord, Check Point will further school IBM on its tech. “Tightening the relationship means we’ll be giving IBM very deep guidance around exactly what fields they should be looking for and how systems integrate,” Rembaum said. The new alliance centers on four main keys. Check Point and IBM will combine research forces to create “a gigantic pool of security researchers,” Rembaum said. Doing so will expand the potential threat intelligence-gathering net, but also lend credibility to potential discoveries. “When we conduct research, it’s nice to have another leading organization with which we can provide notes,” he said. “It’s helpful to have a pool of researchers to validate assumptions. . . . When two sources say it’s true, it makes it more relevant and more critical.” But what’s more compelling is the integrated threat-prevention and analytics technologies, Rembaum says. Check Point will fold its SmartConsole application into the IBM Security App Exchange for integration with IBM’s Security QRadar Intelligence Platform. Together, the systems can tackle the entire security gamut — analyzing, blocking and mitigating attacks. The integration also means that a customer can operate within an IBM space but still access Check Point functions, Rembaum said. IBM customers will also be allowed to manage Check Point Mobile Threat Prevention within IBM’s MaaS360 enterprise-mobility management system, a software used to remove malicious apps and do quick security rollouts. Mobile is “the most critical space” for customers to protect, he said. “(Smartphones) are an always-on and always-connected vehicle for employees,” he said. “And they operate outside the corporate security perimeter.” The expanded alliance also allows IBM to manage Check Point’s entire suite of products for clients, Rembaum said. Check Point will expand the number of tools IBM supports. “So IBM can be there in lockstep with us when we offer services,” he said.

Palo Alto Networks Nabs Cisco, Juniper Market Share … Again

Palo Alto Networks ( PANW ) last quarter again nabbed market share from rivals  Cisco Systems ( CSCO ), Check Point Software Technologies ( CHKP ) and Juniper Networks ( JNPR ), a Piper Jaffray analyst wrote Monday ahead of Palo Alto’s fiscal Q2 earnings late Thursday. In a survey of third parties selling Palo Alto products, half said Palo Alto is most consistently beating out Check Point, Piper Jaffray’s Andrew Nowinski wrote in a research report. “Cisco, Check Point and Juniper have consistently been called out by resellers as the vendors most frequently losing to Palo Alto,” he wrote. “These are also the top vendors in the firewall market, suggesting Palo Alto continues to gain share at the expense of all the major vendors in the space.” That’s sure to rile Cisco, which last week  unveiled a next-generation firewall in direct competition with Palo Alto, Check Point, Fortinet ( FTNT ) and Intel ( INTC )-owned McAfee. It was also the first time that Check Point was cited as the vendor Palo Alto beats most often, Nowinski wrote. Nowinski retained his rating on Palo Alto Networks stock to overweight, with a 208 price target. At least three other analysts, however, cut their price target on Palo Alto stock Monday ahead of the Thursday earnings report. Sales, EPS Seen Decelerating Palo Alto stock was up 1% in afternoon trading on the stock market today , but rival  FireEye ( FEYE ) was up 9%. FireEye announced Hewlett Packard Enterprise ( HPE ) as its global alliance partner of the year. For fiscal Q2 ended in January, Palo Alto Networks is expected to report $318.3 million in sales and 39 cents earnings per share ex items, up 46% and 105%, respectively, vs. the year-earlier quarter. It would be its first quarter eclipsing the $300 million-mark. But sales and EPS minus items are expected to decelerate for the second consecutive quarter, according to the consensus of 40 analysts polled by Thomson Reuters. The consensus model is in line with Palo Alto’s earlier guidance for $314 million to $318 million and 38 cents to 39 cents. Palo Alto stock is down 28% this year, slightly worse than IBD’s 25-company Computer-Software Security industry group, which is 24% off its 2015 closure. Cybersecurity stocks were pounded in January on a perceived slowdown in spending after gloomy reports from firms like Tableau Software ( DATA ) and LinkedIn ( LNKD ). Neither Nowinski nor Dougherty analyst Catharine Trebnick see that slowdown for Palo Alto. Trebnick maintained her buy rating and 215 price target on Palo Alto stock. She urged investors to compare Palo Alto to direct next-generation firewall vendors. Firewall Vendors Outperform Peers Barracuda Networks ( CUDA ), CyberArk Software ( CYBR ), Proofpoint ( PFPT ), Imperva ( IMPV ), Rapid7 ( RPD ), Qualys ( QLYS ), Splunk ( SPLK ) and FireEye “have provided a seemingly negative read-through for Palo Alto Networks,” Trebnick wrote in a research report. “Unlike elsewhere in security, next-generation firewall vendors that cater to enterprises have all managed to produce good enough results for investors.” Trebnick expects Palo Alto to beat consensus expectations. Wildfire and Traps are driving higher attach rates, she wrote. Wildfire is Palo Alto’s cloud-based malware-analysis system, which competes with FireEye. Traps is an endpoint-security product. Over the past 12-16 months, Palo Alto has expanded its suite of products to seven from four, Trebnick wrote. Together, Palo Alto touts them as a “next-generation security platform.” “Our sources have indicated that they are now seeing increased success from this approach as enterprises are broadening their purchases to include more of the auxiliary software subscriptions,” she wrote. Trebnick and Nowinski alike see a strong April-quarter pipeline for Palo Alto. Nowinski said he expects a 3%-4% upside to Q3 guidance despite typical seasonal weakness.