(Reuters) - Palo Alto Networks (NASDAQ:PANW) beat Wall Street expectations for first-quarter revenue and profit on Wednesday, owing to healthy spending for its cybersecurity services amid a rise in digital threats.
However, shares of the Santa Clara, California-based company fell over 5% in extended trading. Palo Alto forecast second quarter as well as annual revenue largely in line with analysts' expectations.
The company also announced a two-for-one stock split of its outstanding shares of common stock. Trading on a split-adjusted basis is expected to begin on Dec. 16.
Palo Alto raised its fiscal 2025 revenue outlook to between $9.12 billion and $9.17 billion, while analysts expected $9.13 billion, as per data compiled by LSEG.
A rise in cyber crimes and hacks has spurred companies to invest heavily into cybersecurity, benefiting large firms that provide a wide range of security services, such as Palo Alto.
The company has been attempting to get its clients to adopt a new "platformization" approach to security by consolidating individual tools into one platform and simplifying management.
"Our platformization progress continued in Q1, driving strong financial results," said Dipak Golechha, Palo Alto's finance chief.
Palo Alto reported revenue of $2.14 billion for the first quarter, beating estimates of $2.12 billion.
On an adjusted basis, the company earned $1.56 per share, compared with estimates of $1.48 apiece.
It forecast second-quarter revenue between $2.22 billion and $2.25 billion, compared with estimates of $2.23 billion.
The company also raised its forecast for adjusted net income per share to a range of $6.26 to $6.39 per share, from $6.18 to $6.31 per share it expected earlier.