Palo Alto Networks Forecasts Strong Growth Driven by AI-Powered Cybersecurity Solutions

Palo Alto's forecasts signal AI boost for cybersecurity tools, shares rise

Aug 18 (Reuters) - Palo Alto Networks (PANW.O), opens new tab forecast fiscal 2026 revenue and profit above analysts' estimates on Monday, betting on growing demand for its artificial intelligence-powered cybersecurity solutions, sending its shares up 5% in extended trading. The company has been benefiting from an AI-driven upgrade cycle as enterprises accelerate their cloud adoption and modernize security operations amid rising data breach incidents. A wave of high-profile cyberattacks has hit global companies including Microsoft (MSFT.O), opens new tab, UnitedHealth Group (UNH.N), opens new tab, Walt Disney (DIS.N), opens new tab and Oracle (ORCL.N), opens new tab, prompting the need for robust security solutions. Palo Alto's new launches such as cloud security platform 'Cortex Cloud' and security platform to protect AI apps 'Prisma AIRS', together with its planned $25 billion CyberArk acquisition, deepen its cybersecurity offerings. "The company benefits from both net new AI spending as well as a reallocation from services to products (via automation)," said Morningstar analyst Malik Ahmed Khan. "We think the CyberArk Software acquisition gets them access to more customers to cross-sell identity over to existing Palo Alto customers and the other way around as well." Palo Alto also announced on Monday that founder and Chief Technology Officer Nir Zuk has retired after being with the company for over 20 years. Long-time product leader Lee Klarich has been named as its CTO and board member. Klarich will also chair the board's security committee in a bid to bolster the company's AI-driven platform strategy. The company projected annual revenue between $10.48 billion and $10.53 billion, above analysts' average estimate of $10.43 billion, according to data compiled by LSEG. It expects adjusted profit per share of $3.75 to $3.85, above estimates of $3.67 for the fiscal year. The company's first-quarter revenue forecast of $2.45 billion to $2.47 billion came in above expectations of $2.43 billion. Its adjusted quarterly earnings per share of 88 cents to 90 cents was also above estimates of 85 cents. Palo Alto's fourth-quarter revenue grew 16% to $2.54 billion from a year ago. It reported adjusted EPS of 95 cents for the quarter ended July 31, beating estimates of 88 cents. Reporting by Jaspreet Singh in Bengaluru; Editing by Shreya Biswas Our Standards: The Thomson Reuters Trust Principles., opens new tab

Palo Alto's forecasts signals AI boost for cybersecurity tools

Aug 18 (Reuters) - Palo Alto Networks (PANW.O), opens new tab forecast fiscal 2026 revenue and profit above Wall Street estimates on Monday, betting on growing demand for its artificial intelligence-powered cybersecurity solutions, sending its shares up nearly 5% in extended trading. The company has been benefiting from an AI-driven upgrade cycle as enterprises accelerate their cloud adoption and modernize security operations amid rising data breach incidents. A wave of high-profile cyberattacks has hit global companies including Microsoft (MSFT.O), opens new tab, UnitedHealth Group (UNH.N), opens new tab, Walt Disney (DIS.N), opens new tab and Oracle (ORCL.N), opens new tab, prompting the need for robust security solutions. Palo Alto's new launches such as cloud security platform 'Cortex Cloud' and security platform to protect AI apps 'Prisma AIRS', together with its planned $25 billion CyberArk acquisition, deepen its cybersecurity offerings. The company also announced that founder and Chief Technology Officer Nir Zuk will be retiring after being with Palo Alto for over 20 years. Long-time product leader Lee Klarich has been named as its CTO and board member. Klarich will also chair the board's security committee in a bid to bolster the company's AI-driven platform strategy. Palo Alto competes with CrowdStrike (CRWD.O), opens new tab, Fortinet (FTNT.O), opens new tab and Zscaler (ZS.O), opens new tab. Its customers include Salesforce (CRM.N), opens new tab, Dell Technologies (DELL.N), opens new tab and NetApp (NTAP.O), opens new tab. The company projected annual revenue between $10.48 billion and $10.53 billion, above analysts' average estimate of $10.43 billion, according to data compiled by LSEG. It expects adjusted profit per share of $3.75 to $3.85, above estimates of $3.67 for the fiscal year. The company's first-quarter revenue forecast of $2.45 billion to $2.47 billion came in above expectations of $2.43 billion. Its adjusted quarterly earnings per share of 88 cents to 90 cents was also above estimates of 85 cents. Palo Alto reported upbeat fourth-quarter results. Its revenue grew 16% to $2.54 billion from a year ago. It reported adjusted EPS of 95 cents for the quarter ended July 31, beating estimates of 88 cents. Reporting by Jaspreet Singh in Bengaluru; Editing by Shreya Biswas Our Standards: The Thomson Reuters Trust Principles., opens new tab

Palo Alto Networks Sales Rise 16 Percent | The Motley Fool

Palo Alto Networks(PANW -0.36%) reported fourth-quarter 2025 earnings on August 18, 2025, with revenue rising 16% year-over-year to $2.54 billion. Platformization deals reached new highs, next-generation security annual recurring revenue (ARR) climbed 32% year-over-year to $5.58 billion, and operating margins exceeded 30% for the first time. This summary provides detailed insights on the company's transition to software firewalls, sustained free cash flow margin expansion, and the strategic CyberArk acquisition. Product revenue increased 19% year-over-year, with 56% of product revenue in the quarter sourced from software-based form factors, reflecting a significant shift away from hardware. Over the trailing twelve months, software accounted for more than 40% of total product revenue, with software firewalls and secure access service edge (SASE) driving demand, especially among large enterprise and cloud customers. "Our software firewall market share is nearly 50%, our product is native in all major public clouds. This quarter, signed a $60 million deal significantly expanded our partnership with a leading US based cloud provider, all in, we generated 9 figures and deals across the major cloud service providers in Q4." -- Nikesh Arora, Chairman and Chief Executive Officer The rapid adoption of cloud-native software firewalls positions the company as a leader as enterprises migrate to hybrid and multi-cloud environments, increasing customer lifetime value and scalability compared to legacy hardware appliances. Operating margin expanded by 340 basis points to over 30% in the fourth quarter of fiscal 2025, with annual operating margin reaching 28.8% for the year, surpassing guidance as product and software-as-a-service (SaaS) growth scaled efficiently. Free cash flow reached $3.5 billion in fiscal 2025, representing a 38% margin, and management now targets an adjusted free cash flow margin of 38%-39% for fiscal 2026 and 40% or higher for the combined company with CyberArk by fiscal 2028, demonstrating resilient profit generation despite deferred payment transitions and a rising software mix. "We have expanded our operating margins by almost 1,000 basis points since FY2022 and we expect to continue to deliver expanded operating efficiencies fiscal year 2026 and beyond. Our ability to expand operating margins have enabled us to deliver sustained high free cash flow margins while steadily managing an increase in demand for deferred payments. We've been moving through this transition since fiscal 2021, and as we lap deals with deferred payments from prior period, we have an increased visibility into our future free cash flows. As I mentioned earlier, we delivered $3.5 billion of free cash flow at 38% margin in fiscal year 2025. We had visibility to approximately 40% of that free cash flow from deferred payments on deals signed prior to the fiscal year. We continued through this transition to deferred payments in fiscal 2025, and we expect about half of our fiscal 2026 free cash flow to come from deferred payment deals signed in fiscal 2025 or earlier." -- Deepak Golechha, Chief Financial Officer The company's disciplined cost structure, high recurring software revenue, and effective management of billing cycles support a rare combination of strong top-line growth and sector-leading free cash flow conversion, reinforcing long-term value creation. The proposed acquisition of CyberArk marks a proactive expansion into identity security, an area reaching an inflection point due to artificial intelligence (AI) transformations across enterprise infrastructure. Management aims to integrate CyberArk's privileged access management (PAM) capabilities -- serving over 8 million privileged users and more than 50 Fortune 500 clients -- with the company's platformized approach and 75,000-customer base. "We are strategically entering this category now to define the next chapter of cybersecurity for the AI era. We look forward to providing more details on our strategy once we close the transaction. Before I hand over to Deepak, I wanna take a moment to speak from the heart on the important leadership announcement we made today. Our founder, our first innovator and a true tight knuckles industry, Nirzuk, has decided to retire after more than twenty years." -- Nikesh Arora, Chairman and Chief Executive Officer This transaction positions the company for leadership in converged network, cloud, and identity security, expanding its total addressable market, cross-selling opportunities, and competitive advantages as identity threats intensify with the proliferation of AI agents and machine identities. Management guides for revenue between $10.475 billion and $10.525 billion in fiscal 2026, up 14% year-over-year, next-generation security ARR of $7 billion to $7.1 billion in fiscal 2026 (up 26%-27% year-over-year), and operating margin of 29.2%-29.7% in fiscal 2026. Adjusted free cash flow margin is forecast at 38%-39% in fiscal 2026, with 40% or higher targeted for the combined entity with CyberArk by fiscal 2028. Product revenue growth in fiscal 2026 is projected in the low teens, with first-quarter fiscal 2026 product revenue expected to rise approximately 20% year-over-year; management will continue to focus on consolidating security platforms, scaling software, and capitalizing on AI-driven opportunities.

Palo Alto Networks Revenue Jumps in Q4 | The Motley Fool

Palo Alto Networks (PANW -0.36%), a leading global cybersecurity provider, reported its fiscal fourth quarter 2025 financial results on August 18, 2025. The company delivered results that were well ahead of analyst expectations, with non-GAAP earnings per share (EPS) at $0.95, surpassing estimates of $0.77. Revenue (GAAP) came in at $2.5 billion, topping GAAP projections of $2.279 billion. Despite strong sales growth, GAAP net income decreased to $253.8 million from $357.7 million compared to Q4 FY2024, share-based compensation, and a notable tax provision adjustment. The quarter showed robust top-line momentum and highlighted the company's position in advanced security, although profitability based on GAAP dropped sharply. Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q3 2025 earnings report. Palo Alto Networks is a major global player in cybersecurity, delivering network protection, cloud security, and threat intelligence products to over 70,000 organizations worldwide. Its offerings protect everything from traditional corporate networks to public cloud environments and employee devices. The company's strategy centers on platformization, or uniting many security functions into integrated platforms rather than offering stand-alone products. Key to this approach is the development of advanced products that use artificial intelligence (AI), machine learning (ML), and automation. Palo Alto's recent focus areas include driving growth in its Next-Generation Security annual recurring revenue (NGS ARR), expanding cloud security capabilities through products like Prisma Cloud (a cloud-native security platform), and investing in AI-enhanced automation, notably its Cortex XSIAM security operations product and Prisma AIRS for AI runtime protection. Success depends on delivering innovation, winning large "platformization" contracts, providing cloud-native coverage, and continually expanding customer relationships through unified solutions. The quarter saw significant momentum in high-growth areas, particularly Next-Generation Security. The company's Next-Generation Security ARR rose 32% year over year, closing at $5.6 billion. This growth was driven by customer demand for unified platforms and AI-powered products. The number of large platformization deals, in which customers implement multiple Palo Alto Networks platforms as integrated solutions, grew sharply to approximately 1,250 among its top 5,000 customers, a 70% year-over-year increase in the number of customers with multiple platformizations. Cloud security also played a vital role, with Prisma Cloud, the firm's cloud-native protection offering, securing more multi-cloud environments for enterprise clients. Prisma Access Browser, a secure cloud browser, contributed a third of all new Prisma Access seats, highlighting the importance of browser security as applications and data shift to the cloud. SASE customers -- buyers of the Secure Access Service Edge bundle for network and cloud security -- rose by 22% year-over-year. The artificial intelligence and machine learning portfolio saw notable acceleration. Cortex XSIAM -- a security operations automation product -- was identified as the company's fastest-growing product ever. Its ARR grew over 200% year-over-year, with total AI-related ARR reaching roughly $400 million, up over 2.5 times year over year. The company also launched Prisma AIRS, an AI runtime security product, broadening the scope of its AI protection services, and announced the acquisition of Protect.ai, a move intended to advance its performance in AI security and model scanning. Financially, the company delivered strong top-line expansion. Product revenue rose 19% year over year in the fiscal fourth quarter, while Subscription and support income (GAAP) increased by 15.5% year over year. Product gross margin reached 78.4%, and the overall gross margin landed at 76% in the fiscal fourth quarter, reflecting ongoing success in software and services mix. Guidance for FY2026 is a non-GAAP operating margin in the range of 29.2% to 29.7%. However, GAAP net income fell 29.1%, partly due to higher GAAP share-based compensation (up 29.8%) and a sharp change in tax provisions, the latter linked to one-time deferred tax accounting adjustments. These issues led to more pronounced volatility in reported profits. Management projects another period of strong growth. The company expects total revenue between $2.45 billion and $2.47 billion for Q1 FY2026, an increase of 15%. Projected non-GAAP diluted EPS is $0.88 to $0.90. The outlook includes non-GAAP EPS of $3.75 to $3.85 for FY2026, revenue (GAAP) rising to $10.475 billion to $10.525 billion (up 14%), Next-Generation Security ARR of $7.0 billion to $7.1 billion, and adjusted free cash flow margin of 38.0% to 39.0%. Key monitoring points for investors will be the pace of platformization deal wins, continuing growth and customer adoption in AI-driven security (especially with Cortex XSIAM and Prisma AIRS), and sustained expansion in cloud and hybrid security. Analysts will also be watching for ongoing margin improvement, how the company addresses increased competition from other cybersecurity firms.

Palo Alto Q4 Earnings Preview: CyberArk Seen as Growth Catalyst, Guidance in Focus | Investing.com UK

Palo Alto Networks (NASDAQ:PANW) is set to report fiscal fourth-quarter results on August 18 after the close, with Bloomberg consensus calling for adjusted EPS of $0.89 on $2.5 billion in revenue; investors, however, are expected to focus less on the near-term numbers and more on fiscal 2026 guidance and the company's recently announced acquisition of Israeli rival CyberArk Software (NASDAQ:CYBR). The roughly $25 billion deal, the largest in Palo Alto's history, was framed by CEO Nikesh Arora as a move to capitalize on AI-driven demand for digital security, but analysts have expressed concerns about the company's ability to integrate a platform of CyberArk's size, especially after at least seven acquisitions in the past two years. PANW Seasonality Chart Since 2013, Palo Alto Networks has experienced an average increase of 3% in August, with positive performance in 69% of those years, and an average rise of 1.5% in September, occurring in 50% of years. **** Be sure to check out all the market-beating features InvestingPro offers. InvestingPro members can unlock a powerful suite of tools designed to support smarter, faster investing decisions, like the following: ProPicks AI Built on 25+ years of financial data, ProPicks AI uses a machine-learning model to spot high-potential stocks using every industry-recognized metric known to the big funds and professional investors. Updated monthly, each pick includes a clear rationale. Fair Value Score The InvestingPro Fair Value model gives you a clear, data-backed answer. By combining insights from up to 15 industry-recognized valuation models, it delivers a professional-grade estimate of what any stock is truly worth. WarrenAI WarrenAI is our generative AI trained specifically for the financial markets. As a Pro user, you get 500 prompts each month. Free users get 10 prompts. Financial Health Score The Financial Health Score is a single, data-driven number that reflects a company's overall financial strength. Market's Top Stock Screener The advanced stock screener features 167 customized metrics to find precisely what you're looking for, plus pre-defined screens like Dividend Champions and Blue-Chip Bargains. Each of these tools is designed to save you time and improve your investing edge. Not a Pro member yet? Check out our plans here or by clicking on the banner below. InvestingPro is currently available at up to 50% off amid the limited-time summer sale.

Palo Alto's forecasts signal AI boost for cybersecurity tools, shares rise

(Reuters) -Palo Alto Networks forecast fiscal 2026 revenue and profit above analysts' estimates on Monday, betting on growing demand for its artificial intelligence-powered cybersecurity solutions, sending its shares up 5% in extended trading. The company has been benefiting from an AI-driven upgrade cycle as enterprises accelerate their cloud adoption and modernize security operations amid rising data breach incidents. A wave of high-profile cyberattacks has hit global companies including Microsoft, UnitedHealth Group, Walt Disney and Oracle, prompting the need for robust security solutions. Palo Alto's new launches such as cloud security platform 'Cortex Cloud' and security platform to protect AI apps 'Prisma AIRS', together with its planned $25 billion CyberArk acquisition, deepen its cybersecurity offerings. "The company benefits from both net new AI spending as well as a reallocation from services to products (via automation)," said Morningstar analyst Malik Ahmed Khan. "We think the CyberArk Software acquisition gets them access to more customers to cross-sell identity over to existing Palo Alto customers and the other way around as well." Palo Alto also announced on Monday that founder and Chief Technology Officer Nir Zuk has retired after being with the company for over 20 years. Long-time product leader Lee Klarich has been named as its CTO and board member. Klarich will also chair the board's security committee in a bid to bolster the company's AI-driven platform strategy. The company projected annual revenue between $10.48 billion and $10.53 billion, above analysts' average estimate of $10.43 billion, according to data compiled by LSEG. It expects adjusted profit per share of $3.75 to $3.85, above estimates of $3.67 for the fiscal year. The company's first-quarter revenue forecast of $2.45 billion to $2.47 billion came in above expectations of $2.43 billion. Its adjusted quarterly earnings per share of 88 cents to 90 cents was also above estimates of 85 cents. Palo Alto's fourth-quarter revenue grew 16% to $2.54 billion from a year ago. It reported adjusted EPS of 95 cents for the quarter ended July 31, beating estimates of 88 cents. (Reporting by Jaspreet Singh in Bengaluru; Editing by Shreya Biswas)