Jitters Hit PANW Stock on Palo Alto Margins and Slowing Contracts, Despite Solid Q1
Palo Alto Networks improved its Q4 profit projection and exceeded top- and bottom-line expectations for Q3, but it also reported a narrower.
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Last updated: Wednesday, June 4, 2025
Quick overview
- Palo Alto Networks reported Q3 earnings that exceeded expectations, with adjusted EPS of 80 cents on revenue of $2.29 billion, reflecting a 15% year-over-year growth.
- Despite the positive earnings report, PANW shares fell 4% in after-hours trading due to concerns over a narrower-than-expected gross margin of 76%.
- The company's guidance for Q4 earnings was slightly above analyst estimates, but slowing growth in remaining performance obligations raised skepticism among investors.
- Palo Alto Networks is navigating a challenge of balancing growth through discounts with maintaining healthy profit margins, leading to mixed investor sentiment.
Palo Alto Networks improved its Q4 profit projection and exceeded top- and bottom-line expectations for Q3, but it also reported a narrower-than-expected gross margin, which caused analysts to react differently. As a result, PANW shares plummeted 4%.
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Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst.
Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
