The company is betting on its "platformization" strategy to drive growth. However, that drove an increase in bookings with payments deferred over the term of the purchase instead of upfront, as clients grappled with higher borrowing costs, a trend Palo Alto expects will continue.
The company projected fourth-quarter billings to be between $3.43 billion and $3.48 billion, the mid-point of which was largely in line with LSEG estimate of $3.45 billion.
"Clearly investors had been hopeful for more, as the stock price crept up since early April in anticipation of earnings," analysts at Bernstein said in a client note.
Palo Alto's shares had gained about 11% this month through Monday's close.
Still, analysts remained optimistic as new AI products and a deal with IBM (IBM.N) to deliver AI-powered security are expected to accelerate performance at the company.
"We continue to believe the company remains well-positioned to consolidate security spend and to maintain above-peer growth," analysts at RBC Capital Markets said.
