The cybersecurity giant’s ‘platformization momentum accelerated sequentially and continues to drive ARR expansion,’ a TD Cowen analyst tells investors.

Palo Alto Networks is finding major traction with its “platformization” strategy that debuted earlier this year, a TD Cowen analyst told investors Tuesday, following the cybersecurity giant’s latest quarterly report.

In February, Palo Alto Networks CEO Nikesh Arora announced a revamped growth strategy aimed at accelerating tool consolidation on its broad cybersecurity platform. Arora acknowledged upfront that the dramatic overhaul of the company’s strategy could lead to a disruption in its growth in the shorter term, and was met by a decline in the vendor’s share price in the immediate aftermath.

[Related: Palo Alto Networks CEO Is ‘Spot On’ With Platform Strategy: Partners]

However, the strategy shift appears to be paying off, wrote Shaul Eyal, a managing director and senior analyst at TD Cowen, in a note to investors Tuesday.

“Platformization momentum accelerated sequentially and continues to drive ARR [annual recurring revenue] expansion,” Eyal wrote, noting that he is raising TD Cowen’s price target for Palo Alto Networks following the “strong” quarterly results.

During Palo Alto Networks’ quarterly call with analysts Monday, Arora said that a variety of factors are “driving a growing need for platformization.”

“We saw this translate into an acceleration in our bookings in the second half of the year, following the rollout of our platformization strategy,” he said.

Palo Alto Networks has carried about more than 1,000 “platformizations” to date, including 90 in the company’s fiscal fourth quarter, ended July 31.

The recent platformization deals included a “very high eight-figure deal” with Schlumberger that spans next-generation firewalls, Prisma Access zero-trust security, Prisma Cloud and Cortex XSIAM, Arora said.

“I know there was significant consternation around our platformization strategy six months ago,” he said. “All I want to say is, I wish we had started down that path sooner.”

Average ARR related to platformization has climbed by more than 10 percent since the company’s Q1, Arora noted.

“This effectively means as we convert our customers to platform customers and single platform customers to multi-platform customers, we see an uplift in ARR,” he said. “This is an exciting development.”

Overall, Palo Alto Networks reported revenue of $2.19 billion during its fiscal Q4, up 12 percent from the same period a year earlier and above the analyst consensus forecast of $2.1 billion.

The company’s stock price was up 8.8 percent to $373.69 a share, as of early Tuesday afternoon EDT.