Palo Alto Networks beats Q4 earnings on AI security demand

Palo Alto Networks beats Q4 earnings on AI security demand

Tue, September 1, 2026 at 11:35 PM GMT+3 2 min read

• PANW -9.28%
• 5AP

Palo Alto Networks Inc (NYSE:PANW, XETRA:5AP) reported fiscal fourth-quarter revenue and profit that topped analyst estimates, as the cybersecurity company closed out its fiscal year with a nearly $1 billion jump in net new next-generation security annual recurring revenue.

Revenue came in at $3.41 billion, versus estimates of $3.35 billion, up 34% year over year. Adjusted earnings per share were $1.02, up 7% from a year earlier and ahead of the $0.98 analysts had expected.

Next-generation security ARR reached $9.1 billion, up 63% from the prior year.

For fiscal 2027, the company guided to next-generation security ARR of $11.08 billion to $11.18 billion, above the $10.9 billion analyst estimate. It forecast revenue of $14.10 billion to $14.20 billion, versus estimates of $13.79 billion, and adjusted earnings per share of $4.16 to $4.19, compared with estimates of $4.11. The company expects a non-GAAP operating margin of 29.5% and an adjusted free cash flow margin of 38.0%.

For the first quarter, Palo Alto Networks guided to revenue of $3.30 billion to $3.31 billion, above the $3.22 billion estimate, and adjusted earnings per share of $0.96 to $0.98, versus estimates of $0.93. It guided next-generation security ARR to $9.54 billion to $9.56 billion.

In the fourth quarter, the company generated adjusted free cash flow of $1.3 billion and operating cash flow of $1.4 billion, with an adjusted free cash flow margin of 37.8%.

The company also announced it had acquired Console, an AI-native platform enabling agentic workflows across enterprise operations, saying the acquisition would expand the role of its Cortex platform in enterprise agentic transformation.

"We delivered a strong Q4 to close out the year, adding nearly $1 billion of Net New NGS ARR in a single quarter," said Nikesh Arora, chairman and chief executive officer of Palo Alto Networks. "The latest advancements in AI are elevating cybersecurity to the top of the CIO priority list, and will serve as durable tailwinds as we progress towards our $20 billion FY30 NGS ARR target."

"We delivered a strong finish to a record year and exceeded our guidance across the board, fueled by strength across our Network & AI Security, Cortex, and Idira platforms," said Dipak Golechha, chief financial officer of Palo Alto Networks. "Our profitable growth framework continues to scale effectively, reinforcing our confidence in achieving 40% adjusted free cash flow margin in FY28."