(Reuters) – Palo Alto Networks on Wednesday forecast second-quarter billings below market expectations and said its billings were “impacted by the cost of money”, sending the cybersecurity company’s shares down about 6% after the bell.
Clients are cutting back on digital spending as inflation remains stubborn and borrowing costs increase.
Peer Fortinet also projected downbeat quarterly revenue as it grapples with stiff competition and tightening consumer budgets.
Santa Clara, California-based Palo Alto forecast second-quarter billings in the range of $2.34 billion to $2.39 billion, compared with analysts’ expectations of $2.42 billion, according to LSEG data.
The company expects its annual billings to be between $10.7 billion and $10.8 billion, compared with its prior forecast range of $10.9 billion to $11 billion.
Growing threats of cyber crimes, privacy concerns and high-profile hacks have in the past year supported the demand for cybersecurity products.
Palo Alto posted a 20% rise in its first-quarter revenue to $1.88 billion, higher than average analysts’ estimate of $1.84 billion.
On an adjusted basis, it earned $1.38 per share in the three months ended Oct. 31, versus LSEG estimates of a profit of $1.16 per share.
The company expects its annual adjusted profit to be between $5.40 and $5.53 per share, compared with its prior range of $5.27 to $5.40 per share.
Palo Alto earlier this month announced its intention to buy Israeli startup Talon Cyber Security as it looks to beef up its cyber security offerings to enterprises.
(Reporting by Zaheer Kachwala in Bengaluru; Editing by Shilpi Majumdar)
