Palo Alto sees quarterly revenue above estimates

May 20 (Reuters) - Palo Alto Networks PANW.O forecast fourth-quarter revenue above Wall Street estimates on Tuesday, on expectations of a surge in demand for the company's cybersecurity solutions to tackle rising online threats.

The growing risk of high-profile online hacks and data breaches has boosted the demand for digital protection services, such as those provided by Palo Alto.

Analysts believe that the cybersecurity sector is benefiting from the AI revolution. Palo Alto is in a good position to capitalize on growing deal activity as more enterprises roll out strategic AI initiatives throughout the year.

Cybersecurity remains largely insulated from the broader spending volatility and will continue to be one of the top investment areas for customers, they have said.

However, shares of the Santa Clara, California-based company were down 3.5% in extended trading as its operating expenses increased 12% in the third quarter and revenue came roughly in line with estimates.

Palo Alto projected fourth-quarter revenue between $2.49 billion and $2.51 billion, compared with analysts' average estimate of $2.49 billion, according to data compiled by LSEG.

For its fiscal 2025, Palo Alto sees revenue in the range of $9.17 billion to $9.19 billion, compared to its prior projection of $9.14 billion to $9.19 billion. Analysts expect $9.17 billion.

Revenue for the third quarter, ended April 30, stood at $2.29 billion. Adjusted profit per share came in at 80 cents, above estimates of 77 cents apiece.