Two things are happening at Palo Alto Networks: it is losing less cash, and the latest exec to reside in the head shed is rubbing his hands together at the prospect of selling more tech as a service.
The enterprise networking security biz reported a loss of $2.3m for its fourth quarter of fiscal 2018, ended 31 July, compared to a $38m loss in the same quarter a year ago. This was on $658.1m in sales, up $150m year-on-year and beating analysts' consensus forecasts of $634m.
Product sales were $267.6m, up 26 per cent and stuff sold as a subscription jumped more than 31 per cent to $390.5m.
Chief bean counter Kathy Bonanno told analysts on the earnings conference call:
Our primary driver of growth continues to be expansion within our existing customer base and trying to drive that lifetime value higher... We've seen pretty consistent contract lengths or durations... and we've been adding more and more of our revenue base from subscriptions as more and more of our new offerings tend to be in subscription format.
Chief exec Nikesh Arora, a former Google exec that rocked up at Palo Alto in June, and who seemed at pains to say on the call that he had been with the firm for exactly 90 days, chipped in:
"I think the whole cloud space is a huge opportunity and I think it's still early because people are just beginning to move their workloads and mass to the cloud and trying to understand what their internal operating infrastructure looks like.
"And I think there are a lot of tools which need to be created which don't exist and which are not going to come from your native cloud providers. So they're going to be looking for third party like us or others to provide those capabilities."
Earlier this year Palo Alto raised $1.5bn for not-exactly-clear purposes. In response to a Morgan Stanley analyst's questions about this, Arora would only say: "You will hear the word integration from Palo Alto Networks, but never the word consolidation."
In other words, the firm wants to buy out competitors and swallow them, Star Trek Borg-style. ®