This was not the release tech bulls wanted ahead of the most anticipated report of earnings season.

Shares of cybersecurity company Palo Alto crashed as much as 20% after it slashed its revenue forecast for the year, sparking concerns that tech euphoria may be misguided and that customers are reining in tech spending.

Here's what the company just reported for the just concluded fiscal Q2 ended Jan 31:

While the historicals were solid, it was the company's guidance that shocked investors:

The silver lining: the company did maintain its outlook for earnings and free cash flow for fiscal 2024, which Chief Financial Officer Dipak Golechha said reflected “disciplined execution on profitable growth”, although granted it didn't do much for the stock after hours.

CEO Nikesh Arora echoed those remarks on a conference call, telling analysts that the company has been successfully executing its profitable growth strategy. But he also said customers were facing “spending fatigue” in cybersecurity.

“This is new,” he said. Customers are finding that adding incremental products “is not necessarily driving a better security outcome for them.” Just wait until customers discover the very same thing about chatbots which aren't driving a better revenue outcome either.

Palo Alto shares fell as much as 19% in extended trading following the earnings report. Palo Alto Networks, alongside other cybersecurity companies like Crowdstrike Holdings, had outperformed most of its tech peers in 2024. Shares had climbed 24% this year on the hope that cyber investments would continue to surge. Now it's time to pull the hype punchbowl away with the stock giving away almost all YTD gains in seconds.