Palo Alto CEO: CrowdStrike Outage Prompting 'Conversations'
Palo Alto Networks' fourth-quarter earnings exceeded analysts' expectations.
![Palo Alto CEO Nikesh Arora offered his thoughts on the CrowdStrike and Microsoft outages in a recent earnings call. Palo Alto CEO Nikesh Arora offered his thoughts on the CrowdStrike and Microsoft outages in a recent earnings call.](https://eu-images.contentstack.com/v3/assets/blt10e444bce2d36aa8/bltbd8041818ef18b5a/669ee0c6e6031c8ee6e100d7/outage_2024.jpg?width=1280&auto=webp&quality=95&format=jpg&disable=upscale)
Recent massive IT outages should benefit Palo Alto Networks during its fiscal year 2025.
That’s according to Nikesh Arora, Palo Alto Networks’ chairman and CEO. He addressed recent global IT outages during Monday’s earnings call for Palo Alto Networks’ fourth quarter and fiscal year 2024 earnings.
In July, a global IT outage impacted 8.5 million Windows devices due to a CrowdStrike update. Less than two weeks later, a distributed-denial-of-service (DDoS) attack caused a massive Microsoft Azure cloud services outage.
“I want to reiterate, our product uses an approach that deploys a 1% to 3%-wide sample test cohort to ensure no issues, and then we release content updates in a phased manner," Arora said addressing recent outages.
![Nikesh_Arora_(002).jpg Nikesh_Arora_(002).jpg](https://eu-images.contentstack.com/v3/assets/blt10e444bce2d36aa8/bltee932d9f9e8ab71c/66c3c7cfd3adf7107ff8306f/Nikesh_Arora_(002).jpg?width=700&auto=webp&quality=80&disable=upscale)
Palo Alto's Nikesh Arora
“We have additionally enabled controls so customers can manage the update process and control it,” he said. “The recent outage has caused a number of customers to reevaluate their options. They have initiated conversations with us around extended detection and response (XDR) and XSIAM. This, plus our industry-leading Cortex technology is appealing. As we've talked to everyone we have talked to so far, we think it has potential to further drive our Cortex momentum.”
Palo Alto Networks’ Products ‘Constantly Improving’
Arora said when he joined Palo Alto Networks, the top priority was to ensure its products are “constantly improving.”
“They were solving problems for our customers the best way possible and also we are solving new problems,” he said. “In other words, our success would depend on our product portfolio and product quality. I continue to be excited about our continued growing leadership position in cybersecurity categories. With our products, customers adopt best-of-breed offerings and eventually evolve to a platform approach.”
Fourth quarter revenue grew 12% year over year to $2.2 billion. Fiscal year 2024 revenue grew 16% year over year to $8 billion. Next-generation security annual recurring revenue (ARR) grew 43% year over year to $4.2 billion.
For the fourth quarter, Palo Alto Networks’ profit totaled $522.2 million compared to $482.5 million for the year-ago quarter. For the full year, profit totaled $2.58 billion compared to $440 million for the previous year.
Positive Outlook
For the fiscal first quarter of 2025, Palo Alto Networks expects $2.1 billion to $2.13 billion in total revenue, representing year-over-year growth of between 12% and 13%. For the full year, it expects $9.10 billion to $9.15 billion in total revenue, representing year-over-year growth of between 13% and 14%.
"We finished off the year with strong execution on our platformization strategy in Q4," Arora said. "As we look forward to fiscal year 2025 and beyond, we are focused on scaling our next-generation security business through continued innovation and execution."
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