Palo Alto Networks CEO: Cost-cutting customers are coming to us in tough economy

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Palo Alto Networks is seeing tailwinds from prospects seeking to slash prices within the worsening financial system, CEO Nikesh Arora stated Thursday.

“The silver lining within the present atmosphere is that we’re having extra consolidation conversations —as a result of immediately, the primary precedence along with being safe is: ‘Are you able to assist me try this with out me rising prices?'” he informed Jim Cramer.

Brewing macroeconomic uncertainty pushed by persistent inflation, the Federal Reserve’s rate of interest will increase, Russia’s invasion of Ukraine and Covid shutdowns in China have compelled corporations throughout industries to chop prices by implementing layoffs, hiring freezes and lowering different bills.  

The cybersecurity firm, whose inventory is within the Bullpen for Cramer’s Charitable Belief, reported better-than-expected fiscal first-quarter income and per-share earnings Thursday after the bell. Shares of Palo Alto Networks have been up almost 7% in prolonged buying and selling after dipping initially on the report’s launch. In Friday’s buying and selling, the inventory shot up greater than 7%.

Calling corporations’ prioritization of streamlining money outflows a “magic bullet” for Palo Alto Networks, Arora additionally emphasised that prospects have gotten extra discerning with their spending.

“You go in there and say, ‘Hear, I can exchange seven distributors for you. I can get you to a greater safety final result. And I can do it at a decrease price,” he stated, including, “we have got to extend the exercise and the main focus that we have to have out there and hope that our higher execution might help us proper the macro traits that we’re seeing.”

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