By Connor Hart

Palo Alto Networks is scheduled to report fiscal third-quarter results after the market closes Tuesday. Here is what you need to know.

PROFIT: The cybersecurity company is expected to post a profit of $264.9 million, or 36 cents a share, according to analysts polled by FactSet. In the same quarter last year, the company reported a profit of $278.8 million, or 79 cents a share. Palo Alto Network's board approved a 2-for-1 stock split late last year, doubling its number of authorized shares of common stock.

ADJUSTED EARNINGS: Stripping out certain one-time items, the Santa Clara, Calif., company is projected to notch adjusted earnings of $543.9 million, or 77 cents a share, compared with adjusted earnings of $454.9 million, or $1.32 a share, last year.

SALES: Revenue is modeled to rise to $2.28 billion from $1.98 billion a year earlier, according to analysts.

The stock has declined 3.1% in the past three months and was recently trading at $194.10.

WHAT TO WATCH:

--Wedbush analysts expect Palo Alto Networks to report strong cybersecurity deal activity across enterprises, generating a more stable pipeline of platformization deals with cloud penetration. "We have seen stronger deal flow in the field over the past few months and believe (Palo Alto Networks) is generating solid momentum for cybersecurity customer deployments on its platform now front and center," they write. Investors will be looking to see how many deals the company inked during the recent quarter.

--Chief Executive Nikesh Arora said during the company's fiscal 2Q report that the company benefited from customers spending on technology improvements, such as cloud investments and infrastructure modernizations, ahead of implementing new artificial-intelligence products. Investors will be looking to see whether AI spend has remained strong, or if recent market volatility has caused customers to pullback on new technology investments.

--Palo Alto Networks recently launched its own suite of AI products, and investors are awaiting updates on how quickly these products are being adopted by customers. "With the company going all-in on its platformization strategy to become a top player across the (security information and event management) space, we believe that the key focus of the conference call will be deal metrics and commentary from Nikesh to determine the success of its platform approach with programs rolling out across industries and geographies," Wedbush analysts say.

Write to Connor Hart at connor.hart@wsj.com

(END) Dow Jones Newswires

May 19, 2025 14:48 ET (18:48 GMT)

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