Cyber security company Palo Alto Networks forecast current-quarter profit below analysts' estimates on Wednesday, largely due to expenses related to its recent acquisitions and a hit from tariffs, sending its shares down 5 per cent.
The company forecast adjusted fourth-quarter profit in the range of US$1.41 per share to US$1.42 per share, below analysts' estimates of US$1.54, according to IBES data from Refinitiv.
The outlook includes an about US$2.5 million, or 2 cents per share, hit from tariffs, the company said.
Palo Alto has doubled down on acquisitions, particularly in cloud security. The company said on Wednesday it would buy Israel-based cyber security firms Twistlock for US$410 million in cash and PureSec for an undisclosed amount.
The company in March completed its acquisition of US-Israeli information security firm Demisto.
Palo Alto forecast current-quarter revenue of US$795 million to US$805 million, while analysts' were expecting US$797.4 million.
The disappointing forecast overshadowed a third-quarter revenue and profit beat.
Palo Alto's services revenue, which includes revenue from contract-based subscriptions for its security offerings, surged 28 per cent to US$448.2 million in the quarter.
The company's net loss narrowed to US$20.2 million, or 21 cents per share, in the three months ended April 30, from US$40.4 million, or 44 cents per share, a year earlier.
Excluding items, the company earned US$1.31 per share, beating the average analyst estimate of US$1.25.
Total revenue rose 28 per cent to US$726.6 million. Analysts on average had expected revenue of US$704 million.
(Reporting by Akanksha Rana in Bengaluru; Editing by Sriraj Kalluvila)