Santa Clara, California, June 2, 2026, 14:04 PDT
- Palo Alto Networks lifted its outlook for fiscal 2026 revenue and profit. The company cited higher demand for its cloud, identity and AI security offerings.
- Revenue jumped 31% to about $3.0 billion and topped Wall Street forecasts. Adjusted earnings were 85 cents per share.
- The stock traded higher after hours, but GAAP results slipped into the red on acquisition costs from CyberArk and other transactions.
Palo Alto Networks bumped up its full-year outlook on Tuesday, saying demand for its cloud, identity, and AI cyber tools was better than expected last quarter. The company topped Street forecasts in its fiscal Q3. Shares jumped 7.4% after hours, Reuters said.
Palo Alto’s latest report gave investors more evidence that the push into AI is feeding security spending, not cutting into it. Larger cybersecurity players are seeing enterprises buy all-in-one security platforms as digital defenses get tougher. That fresh read comes as investors gauge whether AI boosts, rather than threatens, budgets for established vendors.
Palo Alto Networks reported quarterly revenue up 31% to $3.0 billion for the period ending April 30. Analysts surveyed by LSEG were looking for $2.94 billion, according to Reuters. Adjusted EPS came in at 85 cents, rising from 80 cents this time last year.
Palo Alto reported a GAAP net loss of $177 million, or 22 cents a diluted share, against net income of $262 million for the same period last year. The company booked $198 million in acquisition-related charges and $280 million for amortization of acquired intangible assets, both linked to its recent deal push.
Next-Generation Security ARR climbed 60% to $8.1 billion. Remaining performance obligation was up 36% at $18.4 billion. Palo Alto said CyberArk and Chronosphere contributed $1.6 billion to ARR and $1.8 billion to remaining performance obligation.
Palo Alto Networks CEO Nikesh Arora said customers are coming to the company to “secure their AI deployments at scale.” CFO Dipak Golechha said M&A integration is “ahead of our plans” and that the company still targets a 40% adjusted free-cash-flow margin for fiscal 2028. PR Newswire
Palo Alto is guiding for fourth-quarter revenue between $3.345 billion and $3.355 billion, with adjusted earnings seen at 96 cents to 98 cents a share. The company’s outlook for fiscal 2026 is revenue of $11.415 billion to $11.425 billion, with adjusted earnings projected at $3.77 to $3.79 a share.
Palo Alto Networks has been pushing customers toward bigger, consolidated security deals, calling the approach platformization—selling network, cloud, identity and security operations together. The CyberArk buy in February made identity security part of the pitch. The Chronosphere purchase aimed at giving customers another tool to watch cloud and AI environments.
Palo Alto faces tough competition in cybersecurity from names like CrowdStrike and Zscaler. When Zscaler gave a weaker outlook last week, sector sentiment dropped, though Wedbush’s Dan Ives blamed it on “company-specific execution issues” rather than a wider slowdown. CrowdStrike is up next with its earnings—investors want to see if AI spending is really showing up in security budgets. Sahm Investopedia
Palo Alto carries real risk here. Growth is tied to making big acquisitions work, and the company has already flagged that CyberArk gains may be late or might not happen. The GAAP loss spells out the short-term price of expansion, while adjusted margins and cash flow are still solid.
Investors looking for signals on Palo Alto’s growth got some answers this quarter. Earlier this year, analysts flagged worries about acquisition costs and customers changing how they buy security services. In the latest results, Palo Alto reported more revenue, more ARR, and lifted its full-year forecast — numbers that gave the market something solid to trade on for now.
