The stock fell 7.92% to $230.45 a share after-hours on Monday, after having gained 1.36% in regular hours.
Adjusted earnings per share came in at $1.05 for its quarter ended October, beating analysts estimates of $1.03. Revenue was $771.9 million, beating Wall Street estimates of $768 million and growing 18% year-over-year.
However, management slightly reduced its full year fiscal 2020 revenue guidance, forecasting revenue of between $3.44 billion and $3.48 billion, just below its previous forecast of between $3.45 billion and $3.48 billion. Adjusted EPS is expected in the range of $4.90 to $5.00, lower than the initial forecast of between $5 and $5.10. But total billings for the year are expected at between $4.105 billion and $4.165 billion, higher than the previous expectations of $4.083 billion and $4.152 billion.
For the October quarter, Services revenue was $540.7 million, beating expectations of $512 million and growing 30%. Product revenue, which refers to the company's hardware business, was $231 million, missing estimates of $256 million and shrinking over last year's result of $240 million.
"Palo Alto Networks' multi-platform approach to security is clearly resonating with our customers," said Nikesh Arora, chairman and CEO. "Our Next-Gen Security offerings performed extremely well in our first fiscal quarter, bolstering our confidence in our long-term prospects for Prisma and Cortex. At our recent Ignite conference, we introduced significant product enhancements, including Cortex XDR 2.0, SD-WAN and DLP capabilities for Prisma Access and the integration of Twistlock and PureSec into Prisma Cloud, that should sustain this momentum."
The stock is up 36% year-to-date.