Cost-cutting customers come to us in a tough economy

Palo Alto Networks Chief Executive Niksh Arora said Thursday that he is seeing a tailwind from customers looking to cut costs in a flagging economy.

“The silver lining in the current environment is that we’re having more merger talks — because suddenly, the number one priority in addition to security is: ‘Can you help me do this without increasing costs?’” .

Brewing macroeconomic uncertainty due to persistent inflation, the Fed’s interest rate hike, Russia’s invasion of Ukraine, and the COVID shutdown in China have forced companies across industries to cut costs by implementing layoffs, hiring freezes, and cutting expenses. other.

The cybersecurity firm, whose stock is in the bullpen for Cramer’s Charitable Trust, reported better-than-expected first-quarter financial revenue and earnings per share Thursday after the bell. Shares of Palo Alto Networks are up nearly 7% in extended trading after initially falling when the report was released. In Friday trading, the stock was up more than 7%.

Calling the companies’ priorities to streamline cash flow a “magic bullet” for Palo Alto Networks, Arora also emphasized that customers are becoming more mindful of their spending.

He said, “You go in there and say, ‘Listen, I can trade seven salesmen for you. ‘” I can get you to a better security conclusion. And I can do that at a lower cost,” he said, adding, “We have to increase the activity and focus we need in the market and hopefully better execution will help us correct the macro trends that we’re seeing.”

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