In re Palo Alto Networks, Inc. Securities Litigation

I. BACKGROUND

1 A. Factual Background 2 Palo Alto Networks is a multinational cybersecurity company that offers enterprise 3 cybersecurity platforms for network security, cloud security, and various cloud-delivered 4 security. Schlaegel Compl. (dkt. 1) ¶ 2. After the market closed on February 20, 2024, 5 Palo Alto Networks announced its financial results for the second quarter of 2024. Id. ¶ 4. 6 As part of that announcement, it lowered both its third quarter and full-year billings and 7 revenue projections. Id. On the same day, Defendant Nikesh Arora, the Chief Executive 8 Officer (“CEO”), explained in an earnings call that the change in projections was “a 9 consequence of us driving a shift in our strategy in wanting to accelerate both our 10 platformization and consolidation and activating our AI leadership.” Id. He also told 11 investors that several deals with the United States federal government for “large projects” 12 did not close and resulted in “a significant shortfall in our U.S. federal government 13 business.” Id. He noted that he expected the shortfall to continue through the rest of 2024. 14 Id. He also said that “[t]he situation started off towards…