Palo Alto Networks' (PANW) stock plunged 5.14% in after-hours trading on Thursday after the cybersecurity firm reported mixed fiscal second-quarter results and cut its full-year earnings guidance, overshadowing a revenue beat.

While revenue grew 14% year-over-year to $2.26 billion, exceeding Wall Street's expectations of $2.24 billion, adjusted earnings per share of $0.73 missed analysts' consensus estimate of $0.78. The company attributed the revenue growth to customers adopting its AI-driven technology amid cloud investments and infrastructure modernization.

However, Palo Alto Networks lowered its full-year earnings guidance, now forecasting non-GAAP net income per diluted share in the range of $3.18 to $3.24, down from its prior outlook of $6.26 to $6.39. The company also narrowed its revenue forecast to between $9.14 billion and $9.19 billion, compared to the previous range of $9.12 billion to $9.17 billion.

Analysts cited disappointing growth in remaining performance obligations, a key metric for bookings, as a primary concern. While the company reported $13.0 billion in remaining performance obligations for the quarter, roughly in line with expectations, the lack of a significant raise in its full-year outlook for the metric weighed on investor sentiment.

Palo Alto Networks is in the midst of a "platformization" strategy, which involves offering some products for free to drive broader adoption of its suite. According to CFO Dipak Golechha, this strategy fueled the Q2 results, but it has also impacted margins and bookings in the near term, as noted by analysts.