CEO says Palo Alto Networks didn't lower its guidance due to lack of demand: 'There is no cybersecurity abyss'

• Palo Alto Networks CEO Nikesh Arora reviewed the cybersecurity company's recent earnings report with CNBC's Jim Cramer, saying product demand is not an issue.
• Palo Alto managed to beat Wall Street's earnings expectations, but it lowered its full-year guidance, which sent its stock plummeting in after-hours trading.

Palo Alto Networks CEO Nikesh Arora told CNBC's Jim Cramer the company didn't lower revenue guidance because it expects a lack of demand for cybersecurity products.

"There is no cybersecurity abyss. I think this is a reshaping of our demand curve so that we can grow faster in the longer term," Arora said. "We want to go ahead and platformize our customers, we want to be able to execute with them as they want right now so we can drive this business to a bigger number in the future years."

Palo Alto reported earnings Tuesday after close, and although it managed to beat Wall Street analyst expectations, it cut its full-year guidance for revenue and billings. The move sent its stock plummeting a little over 20% in after-hours trading. In a conference call with analysts, Arora attributed the guidance change to a "shift" in strategy, "wanting to accelerate growth, our platform migration and consolidation and activating AI leadership."

According to Arora, cyber criminals are as plentiful as ever, and the company's conversations with enterprise leaders about its services are "at an all-time high." However, he admitted that customers are experiencing "fatigue" when it comes to cybersecurity processes: dealing with and integrating multiple cybersecurity vendors, slower legacy infrastructure.

Customers aren't decreasing their cybersecurity spending, he said, they just want more bang for their buck. He added that he feels Palo Alto is more prepared than its competitors to meet these demands.

"Sometimes you have to consolidate to go out and double from there. I'm not worried about the stock price," he said. "Let's go back to the basics, our business is strong, demand is strong."

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Disclaimer The CNBC Investing Club Charitable Trust holds shares of Palo Alto Networks.

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