06:32 AM EDT, 05/21/2024 (MT Newswires) -- Palo Alto Networks ( PANW ) shares dropped early Tuesday after the cybersecurity firm tightened its full-year billings guidance, even though it recorded better-than-expected fiscal third-quarter results.

Billings, which consist of revenue plus deferred revenue, are now pegged at $10.13 billion to $10.18 billion for fiscal 2024 versus the company's prior projections of $10.1 billion to $10.2 billion, it said late Monday. Analysts on Visible Alpha currently estimate $10.16 billion in billings. The stock fell 7.8% in premarket activity.

"We continue to expect platformization-related drivers, both larger deals with associated cost of money impacts and acceleration in platformization programs will impact our billings over a total of a 12- to 18-month period," Chief Financial Officer Dipak Golechha said during an earnings call, according to a Capital IQ transcript. "We expect that this will persist through fiscal year 2025 as we anniversary the rollout of these programs and resulting in lower billings and to a lesser degree, revenue."

Still, Palo Alto lifted its fiscal full-year adjusted earnings outlook to $5.56 to $5.58 a share from the previous forecast of $5.45 to $5.55. Revenue is set to come in between $7.99 billion and $8.01 billion, compared with the previous guidance of $7.95 billion to $8 billion. The consensus on Capital IQ is for normalized EPS of $5.53 and revenue of $8 billion.

For the quarter ended April 30, adjusted EPS advanced to $1.32 from $1.10, topping the Street's view for $1.25. Revenue climbed 15% to $1.98 billion, just ahead of analysts' $1.97 billion estimate. Subscription and support revenue advanced to $1.59 billion from $1.33 billion, while product sales rose to $391 million from $388.1 million. Billings grew 3% to $2.33 billion year-on-year, according to an investor presentation.

"As we have explained to you over the last year, with an increase in factors impacting payment terms on a quarterly basis, there's been significant volatility in our billings," Golechha told analysts. "With this volatility in mind, we've been increasingly focused on driving high-quality bookings, which add to (remaining performance obligations) and maximize our (next-gen security annualized recurring revenue) in contracts."

For the ongoing three-month period, Palo Alto anticipates billings of $3.43 billion to $3.48 billion, while Visible Alpha has a current estimate of $3.45 billion. Adjusted EPS is seen at $1.40 to $1.42 and revenue is to be in a range of $2.15 billion to $2.17 billion. The Street's view is for normalized EPS of $1.42 and revenue of $2.16 billion.

Price: 299.30, Change: -24.47, Percent Change: -7.56