By early afternoon, shares had added 5% to $77.32.
The IT security company posted quarterly net income of 10 cents a share, a penny higher than analysts surveyed by Thomson Reuters had expected.
Total sales of $141.1 million came in 46.2% higher than a year earlier and beat estimates by $5.5 million.
"We reported very good Q2 results, driven by strong customer demand for our integrated and automated enterprise security platform," said CEO Mark McLaughlin in a statement.
"Our business model is benefitting from higher attach rates of our SaaS-based subscription services, which, combined with continued strong product growth, contributed to record billings, revenue and deferred revenue," added CFO Steffan Tomlinson.
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TheStreet Ratings team rates PALO ALTO NETWORKS INC as a Hold with a ratings score of C-. The team has this to say about their recommendation:
"We rate PALO ALTO NETWORKS INC (PANW) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and feeble growth in the company's earnings per share."