Palo Alto lifts annual forecasts on resilient cybersecurity spending

:Palo Alto Networks Inc raised its annual forecasts for revenue and adjusted profit on Tuesday as enterprise customers shift to one-stop shops for their cybersecurity needs in a bid to reduce costs.

Shares of the Santa Clara, California-based company gained 4 per cent to $197.2 in volatile trading after the bell.

A rise in cyber crime and the growing digital presence of businesses and governments have fed demand for cybersecurity software, helping soften the impact from technology budgets shrinking in the face of high interest rates and inflation.

"The market is tough and definitely more challenging than when we started the year," the company said during its earnings call. "We are fortunate to be focused upon a technology market that is more resilient."

It is also working on embedding generative AI, the technology behind chatbot sensation ChatGPT, into products and workflows.

"Raised guidance for Q4 billings growth gives us more confidence to expect demand headwinds to ease incrementally as we set up for stronger performance in FY24," said Janice Quek, equity analyst at CFRA Research.

Palo Alto, which counts Accenture and Salesforce among its clients, now expects 2023 adjusted net income per share of $4.25 to $4.29, from $3.97 to $4.03 estimated earlier.

It increased the lower end of its full-year revenue outlook to between $6.88 billion and $6.91 billion, compared with a prior forecast of $6.85 billion to $6.91 billion.

The company also forecast fourth-quarter revenue between $1.94 billion and $1.97 billion, compared with analysts' estimates of $1.95 billion, according to Refinitiv data.