news/CRWD/2023.02.21/Palo Alto Networks boosts profit view on resilient cybersecurity demand.txt

Feb 21 (Reuters) - Cybersecurity company Palo Alto
Networks Inc raised its annual profit forecast on
Tuesday and said it will control costs by limiting headcount,
after rounding off a quarter that showed demand had stayed
strong in the face of a turbulent economy.Shares of the company rose more than 7% in extended trading
and lifted rival Crowdstrike Holdings Inc.The earnings burnished the view that cybersecurity spending
is essential for businesses and governments expanding their
digital presence, even as rising interest rates and high
inflation weigh on technology budgets."We've always maintained that we expect cybersecurity to be
resilient, and we continue to see evidence of that," Chief
Executive Officer Nikesh Arora said on a post-earnings call.Still, the company has sharpened its focus on efficiencies
amid the weakening economy and its headcount growth in 2023 is
expected to be lower than any of the past three years, Arora
said, adding that Palo Alto Networks was working to manage its
stock-based compensation to bring it down as percent of its
revenue.Adjusted net income for the full year is now expected to be
between $3.97 and $4.03 per share, compared with its previous
forecast of $3.37 to $3.44 a share."In an environment where investors have become more
profitability-focused, PANW's guidance ... is icing on the
cake," said Janice Quek, an analyst at CFRA Research.Its revenue grew 26% to $1.7 billion in the second quarter
ended Jan. 31, beating analysts' expectation of $1.65 billion,
according to Refinitiv data.Excluding items, the company earned a net income per share
of $1.05, higher than analysts' expectations of $0.78.Palo Alto Networks also reported its third straight
quarterly profit on a GAAP basis and said it expects to be GAAP
profitable for the fiscal year 2023."We believe we now meet the criteria for inclusion in the
S&P 500", said finance chief Dipak Golechha.(Reporting by Vansh Agarwal in Bengaluru; Editing by Shinjini
Ganguli and Uttaresh.V)