On June 4, Palo Alto Networks declined 3.01% overnight, trading at $272.0/share, with trading volume of $115,700. The stock continued to slide following its fiscal Q3 earnings release despite results that broadly exceeded expectations.

The company reported Q3 revenue of $3.0 billion, up 31% year-over-year and above the $2.94 billion consensus estimate, while adjusted EPS of $0.85 beat the $0.80 expectation. Full-year guidance was raised to $114.15-$114.25 billion in revenue and $3.77-$3.79 in adjusted EPS, both above Street forecasts. Next-Generation Security ARR surged 60% to $8.1 billion. However, investors flagged that approximately $1.6 billion in ARR stemmed from acquisitions of CyberArk and Chronosphere, narrowing the organic beat and raising questions about underlying growth quality. The company also lacked clear organic vs. inorganic guidance for Q4.

The sell-off reflects classic profit-taking pressure after the stock had surged approximately 57% over the prior month to all-time highs. The broader systems software sector also weighed, with CrowdStrike falling 10.65%, Oracle down 4.01%, and ServiceNow declining 2.74%.

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