The Reinvention of Palo Alto Networks
Palo Alto Networks (PANW) is a business that has been substantially reinvented in the last five years and that is what is driving the strong share price performance.
Our Q4 revenue grew 26pc, marking our 12th consecutive quarter revenue growth north of 20pc. Our billings grew 18pc against a very strong 44pc growth in Q4 a year ago, and RPO [remaining performance obligations] grew 30pc, ahead of our revenue growth. Our Q4 operating margins expanded by 760 basis points, driving $1.44 in non-GAAP earnings per share, and we achieved 39pc adjusted free cash flow margins for the year. Our performance in Q4 did not come as a surprise to us. We've been investing in our next-generation security portfolio for some time now to position ourselves in a leadership position for the future of the cybersecurity market.
It is this next-gen portfolio driving that is our growth transformation and enabling our leverage. Lee and his team will expand on this in the forward-looking portion of our program. We achieved several important milestones in this quarter, especially in our software and cloud-based businesses this year. Our combined SASE [secure access service edge], Cortex, and cloud bookings were north of $1bn in Q4. Our Cortex platform surpassed $1bn in annual bookings last quarter, and we achieved the same milestone with SASE this quarter.
We also exceeded $500m in Prisma Cloud ARR [annual recurring revenue]. These product performances have all contributed to the strong growth we continue to enjoy in NGS [next generation security] ARR. Remember that our NGS business is largely a capability new to us in the last five years and is primarily cloud-delivered. This quarter, we added more net new ARR than any other pure-play cybersecurity company. Our platformization is continuing to drive large-deal momentum.
Nikesh Arora, CEO, Palo Alto Networks, Q4 2023, 25 August 2023
No surprise that CEO, Nikesh Aurora, took over the top job in 1 June 2018, when the shares were around $67.
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