Shares of cybersecurity company Palo Alto Networks plunged 19% in extended trading Tuesday, after the company reported a beat on the top and bottom lines but lowered its full-year guidance for revenue and billings.

Here’s how the company did compared to LSEG, formerly Refinitiv, estimates:

Earnings per share: $1.46, adjusted, vs. $1.30 expectedRevenue: $1.98 billion vs. $1.97 billion expected

Net income was $1.7 billion for the quarter, or $4.89 per share, compared to $84 million, or $0.25 share, for the fiscal second quarter 2023.

The company is now guiding to full-year total billings between $10.1 and $10.2 billion, compared to its previous guidance of $10.7 and $10.8 billion. Palo Alto Networks also expects full-year revenue to range between $7.95 to $8 billion, compared to its prior guidance of $8.15 to $8.2 billion.

In a conference call with analysts, CEO Nikesh Arora said the lowered guidance was due to a “shift” in strategy, “wanting to accelerate growth, our platform migration and consolidation and activating AI leadership,” adding that the company expected “a difficult customer” as the company shifted stance.

Guidance for the upcoming quarter also fell short of consensus estimates. Analysts surveyed by LSEG expected the company to guide to fiscal third-quarter revenue of $2.04 billion, but Palo Alto Networks now expects revenue to range between $1.95 billion and $1.98 billion.

The new billings guidance represents full-year growth of between 10% and 11% versus previous guidance showing 16% to 17% billings growth. Similarly, Palo Alto Networks now expects full-year revenue growth between 15% and 16%, down from initial guidance showing 18% to 19% growth.

The lowered estimates come even as the AI frenzy sweeps up cybersecurity stocks and the broader technology sector. Arora said that the company would look to activate its “AI leadership strategy” in the earnings release.

This is breaking news. Please check back for updates.

Microsoft said in a Friday regulatory filing that a Russian intelligence group accessed some of the software maker’s top executives’ email accounts. Nobelium, the same group that breached government supplier SolarWinds in 2020, carried out the attack, which Microsoft detected last week, according to the company.

It isn’t the first time Russian hackers have gained entry into Microsoft’s systems. State-sponsored attacks that can result in the dissemination of sensitive data becomes a greater risk during periods of armed conflict, and Russia’s war against Ukraine has been going on for almost two years now. On Thursday, Russia said Ukrainian forces conducted drone strikes in multiple Russian locations.

Microsoft’s announcement comes after new U.S. requirements for disclosing cybersecurity incidents went into effect. A Microsoft spokesperson said that while the company does not believe the attack had a material effect, it still wanted to honor the spirit of the rules.

The Cybersecurity and Infrastructure Security Agency is “closely coordinating with Microsoft to gain additional insights into this incident and understand impacts so we can help protect other potential victims,” CISA executive assistant director for cybersecurity Eric Goldstein said in a statement to CNBC. “As noted in Microsoft’s announcement, at this time we are not aware of impacts to Microsoft customer environments or products.” 

In late November, the group accessed “a legacy non-production test tenant account,” Microsoft’s Security Response Center wrote in the blog post. After gaining access, the group “then used the account’s permissions to access a very small percentage of Microsoft corporate email accounts, including members of our senior leadership team and employees in our cybersecurity, legal, and other functions, and exfiltrated some emails and attached documents,” the corporate unit wrote.

The company’s senior leadership team, including Chief Financial Offer Amy Hood and President Brad Smith, regularly meets with CEO Satya Nadella.

Microsoft said it has not found signs that Nobelium had accessed customer data, production systems or proprietary source code.

The U.S. government and Microsoft consider Nobelium to be part of the Russian foreign intelligence service SVR. The hacking group was responsible for one of the most prolific breaches in U.S. history when it added malicious code to updates to SolarWinds’ Orion software, which some U.S. government agencies were using. Microsoft itself was ensnared in the hack.

Nobelium, also known as APT29 or Cozy Bear, is a sophisticated hacking group that has attempted to breach the systems of U.S. allies and the Department of Defense. Microsoft also uses the name Midnight Blizzard to identify Nobelium.

It was also implicated alongside another Russian hacking group in the 2016 breach of the Democratic National Committee’s systems.

Last year, a vulnerability in Microsoft software allowed China-aligned hackers to access the email accounts of senior government officials, including Commerce Secretary Gina Raimondo, ahead of a critical U.S.-China meeting. The company’s “negligent cybersecurity practices” led to the attack, Sen. Ron Wyden, a Democrat from Oregon, wrote in a letter to CISA director Jen Easterly, and other federal officials.

“We are continuing our investigation and will take additional actions based on the outcomes of this investigation and will continue working with law enforcement and appropriate regulators,” the Microsoft blog post said.

The Federal Bureau of Investigation told CNBC that it knows about the attack and is working with federal partners to help.

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Microsoft-owned Activision Blizzard has agreed to settle a case from a California state agency that alleged the video game publisher discriminated against women, including denying them promotion opportunities and paying them less.

California’s Civil Rights Department said in a statement on Friday that as part of a proposed settlement agreement, Activision Blizzard will pay nearly $55 million to provide relief to female employees and contractors from October 2015 to December 2020 and cover legal fees. About $46 million of the total will go to the fund for affected women, the agency said in the statement.

The news comes almost two years after Activision Blizzard settled a case from the U.S. Equal Employment Opportunity Commission, which pointed to sexual harassment, pregnancy discrimination and retaliation. As a result, the company agreed to form an $18 million fund to pay victims.

In 2021, the agency, then known as the Department of Fair Employment and Housing, filed a suit against the company, presenting allegations of sexual harassment, discrimination and retaliation. Months later, the Wall Street Journal reported that while Activision Blizzard CEO Bobby Kotick was aware of allegations of misconduct inside the company, he didn’t share all relevant information with its board.

Shares fell, and Microsoft subsequently began talks to acquire Activision Blizzard, the maker of Call of Duty.

The $69 billion deal closed in October after regulators in the U.S. and Europe looked carefully at it. The Federal Trade Commission argued in San Francisco appellate court last week that a federal judge made mistakes in rejecting the regulatory agency’s attempt to stop the companies from completing the transaction.

The Los Angeles County Superior Court must approve Activision’s settlement with the state agency, according to the statement. The agency will file a new complaint that excludes prior harassment allegations, according to the proposed settlement agreement, which CNBC viewed.

The agreement would require Activision to keep up efforts around inclusion of underrepresented people in recruiting. Except when compensation is non-negotiable, the company would have to tell job applicants in writing at the start of hiring and promotion processes that they can negotiate their pay.

“We appreciate the importance of the issues addressed in this agreement and we are dedicated to fully implementing all the new obligations we have assumed as part of it,” Activision said in a statement to CNBC.

WATCH: Activision Blizzard CEO Bobby Kotick: We always believed the deal would get through

Shares of SenseTime fell as much as 9.7% on Tuesday after U.S. short seller Grizzly Research alleged the Chinese artificial intelligence firm inflated its revenue.

SenseTime shares pared some of those losses in Hong Kong and closed 4.86% lower in the afternoon.

Grizzly Research alleged in a report on Tuesday that SenseTime engaged in a so-called “revenue round-tripping” program.

“SenseTime either directly or through intermediaries provides funds to customers that in turn are used to purchase goods from SenseTime that might never have been delivered,” Grizzly Research alleged. The short seller said it got this information via two court cases in China that described the scheme.

SenseTime said in a Hong Kong Stock Exchange filing that it is “reviewing the allegations and considering the appropriate course of action to take to safeguard the interests of all shareholders.”

The Chinese firm said it believes Grizzly Research’s report is “without merit and contains unfounded allegations and misleading conclusions and interpretations.”

SenseTime added that the report “shows a lack of understanding of the Company’s business model and financial reporting structure, and a lack of thorough reading of the Company’s public filings.”

Grizzly Research did not contact SenseTime to verify the information, SenseTime said in its statement.

SenseTime was once viewed as one of China’s most exciting artificial intelligence companies and is best-known for computer vision technology that can power facial recognition software.

However, the company has been a target of U.S. government sanctions. In 2019, Washington put SenseTime on the so-called Entity List, which restricts American firms from doing business with it. The U.S. alleged that SenseTime is linked to human rights violations in China’s Xinjiang region.

At the time, SenseTime said that it does “not have any business in, nor are we aware of our technology being used in the Xinjiang region.”

SenseTime proposed an initial public offering in Hong Kong in mid-2021 but postponed the listing later that year after the U.S. government added it to a list of “Chinese military-industrial complex companies.”

The company ended up doing its listing at the end of December, pricing shares at 3.85 Hong Kong dollars ($0.49). Shares closed at 1.37 Hong Kong dollars on Tuesday, 64% below their IPO price.

Due to SenseTime’s U.S. government blacklisting, the company “has a severely limited target market and therefore no outlook for any real improvement,” Grizzly Research said in its report.

The short seller also took aim at SenseTime’s technology, claiming it has “no competitive moat in AI.”

“We believe SenseTime is operating a fundamentally dead-ended facial recognition software business, plus some additional AI R&D projects with almost no chance of scalable future profits,” Grizzly Research said.

OpenAI investors are pushing to bring back Sam Altman as CEO one day after he was ousted by the board, according to people familiar with the matter.

Microsoft, Tiger Global and venture firm Thrive Capital are among several of OpenAI’s top backers that are part of an effort to reinstate Altman, said a source, who asked not to be named because discussions are confidential.

Sequoia Capital has also been in contact with Altman, a person familiar with knowledge of the matter told CNBC. Sequoia supports Altman and former OpenAI president Greg Brockman in whatever they choose to do next, whether it’s returning to OpenAI or creating a new startup, the person said. Sequoia also informed Microsoft that it would back efforts to bring back Altman and Brockman, the person said.

The Verge first reported on the talks to bring back Altman. The publication, citing a source, said Altman is “ambivalent” about returning and would demand governance changes. Altman didn’t immediately respond to CNBC’s request for comment. Nor did Thrive. Microsoft declined to comment.

OpenAI’s announcement late Friday that the company was firing Altman and replacing him on an interim basis with technology chief Mira Murati sent shockwaves across Silicon Valley. OpenAI has emerged as the hottest startup on the planet since launching its ChatGPT chatbot last year and spurring a rush of investment generative artificial intelligence market. The company had reportedly been in talks as recently as last month to sell employee shares at a valuation of $86 billion.

Microsoft, which has invested billions of dollars in OpenAI and has a close technology partnership with the company, was surprised by the announcement. In addition to ousting Altman, the company removed Brockman, the chairman, from his board leadership position but said he would remain as president. Brockman said later in the day that he quit.

WATCH: The OpenAI shakeup will not have a major impact on Microsoft, says analyst

The CEO of blockchain company Ripple has some strong words for the U.S. Securities and Exchange Commission.

Brad Garlinghouse told CNBC’s Dan Murphy at the company’s Ripple Swell conference in Dubai that he thinks the agency has lost sight of one of its key tasks as a regulator.

“I think the SEC, in my opinion, has lost sight of their mission to protect investors. And the question is, who are they protecting in this journey?” Garlinghouse said Thursday. The SEC was not immediately available for comment when contacted by CNBC.

The SEC in 2020 accused Ripple and its executives of conducting a $1.3 billion securities fraud via sales of XRP to retail investors. Ripple, the regulator alleged, failed to register an ongoing offer and sale of billions of XRP tokens to investors, depriving them of adequate disclosures about XRP and Ripple’s business.

In July, Ripple was handed a pivotal victory as a judge ruled that XRP is not in and of itself a security. Following this, the SEC was denied a request for an interlocutory appeal. Then, in October, the SEC dropped its securities law violation charges against Garlinghouse and Ripple executive Chris Larsen.

The next key step in the case is the remedies discovery process. The SEC has 90 days from Nov. 9 to conduct remedies-related discovery, according to a proposed schedule submitted by the SEC.

“I think it is a positive step for the industry, not just for Ripple, not just for Chris and Brad, but for the whole industry, that the SEC has been put in check in the United States. And I’m hopeful this will be a thawing of the permafrost in the United States for really seeing an amazing industry that has immense potential thrive in the largest economy in the world,” Garlinghouse told CNBC.

Garlinghouse hopes that the U.S. will move beyond a situation where crypto regulation is dictated by a constant stream of litigation to a point where federal laws governing digital currencies are introduced by Congress.

“One of the things that people talk about is, one of the definitions of insanity is doing the same thing over and over again, and thinking you’ll get a different outcome, the SEC is doing the same thing over and over again. And they think, I guess, they’re gonna get a different outcome at some point,” Garlinghouse continued.

“[Digital asset manager] Grayscale also had, I think, an important victory in the United States about the bitcoin ETF, where the judge had to get, a federal judge talking about a federal agency, the SEC, saying the SEC is being arbitrary and capricious,” he added, referencing an appeals court ruling that said the SEC was wrong to reject an application from Grayscale to create a bitcoin ETF.

“Generally, judges tend to be pretty down the middle and try to not be dramatic — those are damning words. So I think at some point, the SEC has to step back and realize that their approach of regulation through enforcement, let’s just bring lawsuits, that has to break.”

Ripple is a payments company that specializes in cross-border money transfers through the blockchain, a distributed database that records transactions across multiple computers. The company’s RippleNet network is used by financial institutions to send funds from one country to another.

Ripple also leverages XRP, a cryptocurrency, to make cross-border payments. The XRP token, which has become commonly associated with Ripple the company, is meant to act as a kind of “bridge” currency between one fiat currency and another as those transactions flow across countries.

So, say you want to send some money from the U.S. to Mexico. Ripple’s technology lets you do that by converting the U.S. dollars into XRP, transferring the XRP over to Mexico, and then converting it into Mexican pesos on the other side.

By doing so, Ripple says, you don’t need to have pre-funded accounts on the other side of a cross-border transaction in order to get that money.

That’s the business case for XRP from Ripple’s point of view. But XRP in its most common usage is ultimately a token that investors speculate on. And when its price dropped like a stone — like other cryptocurrencies — in the 2018 crypto bear market, regulators got concerned about the impact of these digital currencies on retail investors.

In Ripple’s case, unlike bitcoin, the cryptocurrency is predominantly owned by Ripple, which holds a huge amount of XRP in an escrow account and releases tokens on a quarterly basis to a mix of institutional investors and retail investors via sales on cryptocurrency exchanges. This is a big part of how Ripple makes money.

That has been a big point of contention for the SEC as it pursues its case against Ripple. Ripple, for its part, maintains that XRP shouldn’t be considered a security and is more akin to a currency or commodity. Being designated a security would mean Ripple having to file lots of paperwork and disclosures with regulators, a process that could prove costly.

Twitter’s former CEO Jack Dorsey openly criticized Elon Musk’s leadership of the company in a series of social media posts Friday, writing that “it all went south” and Musk “should have walked away” from the acquisition.

Users of Bluesky, a buzzy new social media platform that is being touted as a potential alternative to Twitter, prompted the discussion. They asked Dorsey if he believed Musk was the right leader for Twitter, to which Dorsey replied, “No.”

“No. Nor do I think he acted right after realizing his timing was bad. Nor do I think the board should have forced the sale. It all went south,” Dorsey wrote. He added that he is glad new social media platforms like Bluesky are being built. Dorsey has backed Bluesky since 2019, when he was still serving as Twitter’s CEO.

Dorsey previously called Musk the “singular solution” to take over Twitter. In a tweet from April 2022, Dorsey said he trusted Musk’s “mission to extend the light of consciousness” through the platform.

But a year later, Dorsey’s opinion appears to have soured.

Musk, who is also the CEO of Tesla and SpaceX, has drawn ire for his tumultuous takeover of Twitter, which he acquired for $44 billion late last year. Musk’s steep job cuts, sweeping policy and feature changes have shaken the confidence of advertisers, politicians and celebrities, among others.

Many have publicly announced their decision to leave or reduce their use of the platform, including Elton John, Jim Carrey and MTA, New York City’s public transit agency.

Soon after making a best-and-final bid to purchase Twitter for $44 billion, or about $54.20 per share, Musk tried to back out of the deal he made to buy the company.

He would have had to pay a $1 billion penalty, otherwise known as a “breakup fee,” to do so and prove to a Delaware court that he had a good reason for walking away. While Musk did take the matter to court, he ended up going through with the deal anyway.

Dorsey, who is still a Twitter shareholder, championed the deal at the time. But on Friday, he wrote that things should have gone differently. “I think he should have walked away and paid the $1b.” It is not clear that Musk, or Twitter, even had that option.

Palo Alto Networks shares moved 7% higher in extended trading on Tuesday after the security hardware and software maker issued fiscal second-quarter earnings that topped Wall Street projections.

Here’s how the company did:

Earnings: $1.05 per share, adjusted, vs. 78 cents per share as expected by analysts, according to Refinitiv.Revenue: $1.66 billion, vs. 1.65 billion as expected by analysts, according to Refinitiv.

The company’s revenue rose 26% year over year in the quarter, which ended Jan. 31, according to a statement. Net income came in at $84.2 million, or 25 cents per share, compared with a loss of $93.5 million in the year-ago quarter.

“Our focus on driving profitable growth is reflected in our Q2 results,” said Dipak Golechha, the company’s finance chief, was quoted as saying in the statement. “As a result, we are raising our cash flow margin and operating profitability targets as we remain focused on driving efficiency in our business.” The company has slowed down headcount growth, Golechha said on a conference call with analysts.

Palo Alto Networks has now posted three consecutive quarters of profitability following a decade of being in the red. It’s now three years ahead of profitability goals it laid out in 2021, CEO Nikesh Arora said on the call.

“We believe we now meet the criteria for inclusion in the S&P 500,” Golechha said.

The company called for fiscal third-quarter adjusted earnings of 90 cents to 94 cents per share on $1.695 billion to $1.725 billion in revenue. Analysts surveyed by Refinitiv had expected 78 cents in adjusted earnings per share on $1.74 billion in revenue.

Management pushed up its earnings guidance for the 2023 fiscal year. It called for $3.97 to $4.03 in adjusted per share. In November guidance was $3.37 to $3.44 in adjusted earnings per share. Analysts polled by Refinitiv had been looking for $3.42 in adjusted earnings per share. The company maintained its revenue guidance. Golechha said he expects income in the fiscal third and fourth quarters.

Customers have delayed or canceled projects, but most remain on track, Arora said. The company shifted some forecasted revenue to the fiscal fourth quarter from the fiscal third quarter, he said.

He said executives continue to see evidence of the cybersecurity market being resilient, while other sectors of the economy sag as central bankers increase interest rates.

During the quarter the company acquired startup Cider Security, which focused on software supply chain and application security for about $195 million. It’s the latest deal in a series that have helped Palo Alto Networks keep growing its top line in the nearly five years under Arora.

Notwithstanding the after-hours move, so far Palo Alto Networks shares are up 20% so far this year, outperforming the S&P 500 index, which has risen 4% over the same period.

WATCH: It’s important to look at overall macro sentiment, says Palo Alto Networks’ Nikesh Arora

Cisco shares rose as much as 8% in extended trading on Wednesday after the maker of computer networking ear announced fiscal second-quarter results that topped Wall Street expectations.

Here’s how the company did:

Earnings: 88 cents per share, adjusted, vs. 86 cents per share as expected by analysts, according to Refinitiv.Revenue: $13.59 billion, vs. $13.43 billion as expected by analysts, according to Refinitiv.

Cisco’s total revenue grew 7% year over year in the quarter, which ended Jan. 28, according to a statement. Net income decreased about 7% to $2.77 billion.

Some components that go in Cisco’s hardware products remain constraints, but the company did see an improvement across the board, CEO Chuck Robbins said on a conference call with analysts.

“Based on the sequentials that we saw, demand remains stable,” he said, although he also said some sales cycles are longer than usual.

Cisco’s public-sector business performed more strongly than it has historically, while in the service provider category, some customers are adjusting to the better delivery of the company’s products into their environments, Robbins said.

The company called for fiscal third-quarter adjusted earnings of 96 cents to 98 cents per share and 11% to 13% revenue growth. Analysts surveyed by Refinitiv had been looking for adjusted earnings per share of 89 cents and revenue of $13.58 billion, which implies almost 6% growth.

Cisco lifted its guidance for the 2023 fiscal year, and now expects $3.73 to $3.78 in adjusted earnings per share and 9% to 10.5% revenue growth. Both numbers are well ahead of analysts’ estimates.

But Cisco said its backlog increased year over year. The backlog for both hardware and software is still considerably higher than usual for Cisco because of limited supply availability, said Scott Herren, Cisco’s finance chief.

“We continue to have very low order cancelation rates, which remain below pre-pandemic levels,” Herren said.

Logistics costs have come down somewhat, he said.

In the fiscal second quarter Cisco’s largest business segment, Secure, Agile Networks, featuring networking switches for data centers, posted $6.75 billion in revenue. That was up 14% and more than the $6.52 billion consensus among analysts polled by StreetAccount.

The Internet for the Future unit, which includes routed optical networking hardware, contributed $1.31 billion, down 1% and just below the $1.32 billion StreetAccount consensus.

Revenue from Cisco’s Collaboration division containing Webex fell by 10% to $958 million, falling short of StreetAccount’s $1.06 billion consensus.

In the quarter, Cisco announced updates to its AppDynamics cloud software for application monitoring and disclosed a restructuring plan that includes changes to its real estate portfolio.

Notwithstanding the after-hours move, Cisco shares have inched about 2% higher, while the S&P 500 index is up 8% in the same time period.

This is breaking news. Please check back for updates.

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