What does it mean that Palo Alto Networks is an "emerging growth company"?

As an "emerging growth company" under the JOBS Act, Palo Alto Networks can take advantage of certain exemptions from reporting requirements for public companies. This includes reduced disclosure obligations for executive compensation and exemption from Sarbanes-Oxley Section 404 auditor attestation requirements. However, the company chose to adopt new accounting standards promptly, unlike some other emerging growth companies.

How much money did Palo Alto Networks raise in its IPO, and how is it being used?

The IPO in July 2012 resulted in total gross proceeds of $299.5 million. After deducting underwriting fees, expenses, and proceeds to selling shareholders, Palo Alto Networks received approximately $215.4 million in net proceeds. The company states there has been no material change in the planned use of these proceeds from what was outlined in their final prospectus.

Are there any corporate governance provisions that investors should be aware of?

Yes, the company's charter documents include provisions designed to deter takeover attempts. These include a classified board of directors with staggered three-year terms, which could make it more difficult for shareholders to change the majority of the board quickly. These structures could also make it harder for shareholders to elect directors not nominated by the current board.

PANW 10-Q Quarterly Report Q2 FY2013 — Revenue, Net Income, EPS

Summary

This 10-Q filing from Palo Alto Networks (PANW) for the period ending January 30, 2013, primarily focuses on disclosures related to its status as an "emerging growth company" and the use of proceeds from its Initial Public Offering (IPO). The company is leveraging certain exemptions available under the JOBS Act, such as reduced executive compensation disclosures and not being subject to auditor attestation requirements for internal controls (Section 404). While choosing to comply with new accounting standards on the standard timeline, investors should be aware of the implications of these exemptions on the attractiveness and potential volatility of the stock. Furthermore, the filing confirms that the planned use of IPO proceeds has not materially changed since the final prospectus was filed. The IPO, which closed in July 2012, raised approximately $215.4 million in net proceeds for the company after deducting expenses. This section also highlights potential risks related to analyst coverage and internal corporate governance structures, such as a classified board of directors, which could deter takeover attempts and entrench management.

Financial Highlights

48 data points

Beta

Revenue

$96.50M

0.7% Gross Margin

Net Income

-$2.61M

-0.0% Net Margin

EPS (Diluted)

$-0.01

Total Assets

$490.15M

Cash & Equivalents

$187.92M

Free Cash Flow

$34.51M

Financial Statements

Beta

Revenue	$96.50M
Cost of Revenue	$27.62M
Gross Profit	$68.88M
R&D Expenses	$15.49M
Operating Expenses	$71.04M
Operating Income	-$2.16M
Interest Expense	$7K
Net Income	-$2.61M
EPS (Basic)	$-0.01
EPS (Diluted)	$-0.01
Shares Outstanding (Basic)	405.91M

Key Highlights

1Palo Alto Networks is operating as an "emerging growth company" and is utilizing JOBS Act exemptions, which may impact investor perception.
2The company has opted out of the extended transition period for new or revised accounting standards, committing to early adoption.
3No material change in the planned use of IPO proceeds as disclosed in the July 20, 2012 prospectus.
4The IPO, completed in July 2012, generated approximately $215.4 million in net proceeds for the company.
5Potential risks associated with lack of or inaccurate analyst coverage are noted, which could affect stock price and trading volume.
6Corporate governance provisions, including a classified board, are in place that could discourage takeover attempts.

Palo Alto Networks Inc Quarterly Report (Amendment) for Q2 Ended Jan 31, 2013

Summary

Financial Highlights

Key Highlights

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