Core Insights - Palo Alto Networks (PANW) reported revenue of $2.54 billion for the quarter ended July 2025, reflecting a year-over-year increase of 15.8% and surpassing the Zacks Consensus Estimate by 1.46% [1] - Earnings per share (EPS) for the quarter was $0.95, up from $0.75 in the same quarter last year, exceeding the consensus EPS estimate of $0.88 by 7.95% [1] Financial Performance Metrics - Remaining Performance Obligation (RPO) stood at $15.80 billion, exceeding the average estimate of $15.26 billion from six analysts [4] - Product revenue reached $573.9 million, surpassing the 14-analyst average estimate of $553.4 million, marking a year-over-year increase of 19.4% [4] - Subscription and support revenue was $1.96 billion, slightly above the average estimate of $1.95 billion, with a year-over-year growth of 14.8% [4] - Subscription revenue was $1.32 billion, matching the average estimate and reflecting a 16.6% increase compared to the previous year [4] - Product gross profit (Non-GAAP) was reported at $440.9 million, exceeding the average estimate of $435.03 million [4] - Subscription and support gross profit (Non-GAAP) was $1.48 billion, slightly below the average estimate of $1.5 billion [4] - Subscription and support gross profit (GAAP) was $1.42 billion, compared to the average estimate of $1.43 billion [4] - Product gross profit (GAAP) was $437.7 million, surpassing the average estimate of $422.66 million [4] Stock Performance - Over the past month, shares of Palo Alto Networks have returned -9.6%, contrasting with a +3.5% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Viewpoint - Palo Alto Networks reported quarterly earnings of $0.95 per share, exceeding the Zacks Consensus Estimate of $0.88 per share, and showing an increase from $0.75 per share a year ago, representing an earnings surprise of +7.95% [1][2] Financial Performance - The company achieved revenues of $2.54 billion for the quarter ended July 2025, surpassing the Zacks Consensus Estimate by 1.46%, and up from $2.19 billion year-over-year [2] - Over the last four quarters, Palo Alto has consistently surpassed consensus EPS estimates and revenue estimates [2] Stock Performance and Outlook - Palo Alto shares have declined approximately 2.7% since the beginning of the year, while the S&P 500 has gained 9.7% [3] - The company's current Zacks Rank is 4 (Sell), indicating expectations of underperformance in the near future [6] Future Earnings Expectations - The current consensus EPS estimate for the upcoming quarter is $0.84 on revenues of $2.44 billion, and for the current fiscal year, it is $3.65 on revenues of $10.43 billion [7] - The outlook for the industry, particularly the Security sector, is currently in the bottom 28% of Zacks industries, which may impact stock performance [8]

Financial Performance - Palo Alto Networks' adjusted earnings reached $0.95 per share [1] - Revenue increased by 16% to $2.54 billion [1] - The company projects future commitments up to $15.5 billion [1] Guidance - The company anticipates both fiscal Q1 and full-year results to surpass estimates [1] Leadership Transition - The founder and CTO is stepping down, with the current product chief taking over [2] Strategic Developments - The $25 billion deal to acquire Cyber Arc caused investor concern and a subsequent share price decline [2]

Financial Data and Key Metrics Changes - Total revenue for Q4 was $2,540,000,000, growing 16% year over year, exceeding the high end of guidance [50][51] - Product revenue grew 19%, driven by software form factors, while total services revenue increased by 15% [51] - Remaining performance obligation (RPO) grew 24% to $15,800,000,000, marking the highest RPO growth in seven quarters [53] - Total gross margin was 75.8%, with product gross margin at 76.8% [55][56] - Operating margins expanded by 340 basis points, reaching above 30% for the first time in company history [58] Business Line Data and Key Metrics Changes - Next generation security annual recurring revenue (NGS ARR) reached $5,580,000,000, growing 32% [54] - AI ARR increased to approximately $545,000,000, up over two and a half times year over year [54] - Software firewall business had ARR up nearly 20% year on year, contributing significantly to product revenue growth [25][51] Market Data and Key Metrics Changes - The Americas grew 15%, EMEA up 19%, and JPEG growing 13%, indicating double-digit growth across all regions [52] - SASE ARR grew 35% year over year, more than twice as fast as the overall market [29] Company Strategy and Development Direction - The company aims to achieve $15,000,000,000 in next generation security ARR by FY30, focusing on platformization and integrated solutions [18][39] - The acquisition of CyberArk is seen as a strategic move to enhance identity security capabilities and expand market presence [44][45] - The company is transitioning to a model that emphasizes real-time security and AI integration, moving away from traditional security paradigms [35][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for cybersecurity solutions, particularly in the context of AI and cloud transformations [10][11] - The company anticipates continued growth driven by software firewalls and SASE, with expectations for product revenue growth in the low teens for FY26 [64][40] - Management highlighted the importance of consolidating security solutions to improve customer outcomes and reduce response times to threats [72][74] Other Important Information - The company has a billion dollars in share buyback authorization remaining through December 2025 [59] - The transition to a contract manufacturing facility in Texas is expected to provide benefits from scale and innovation [57] Q&A Session Summary Question: Strategic view on security consolidation - Management discussed the fragmented nature of the security market and the importance of platformization to consolidate security spend, aiming for increased market share over time [69][70][72] Question: Underlying drivers of strong bookings - Management attributed the strong bookings to platformization, execution, and customer conviction in the company's ability to provide innovative solutions [79][82]

Financial Data and Key Metrics Changes - Total revenue for Q4 2025 was $2,540,000,000, growing 16% year-over-year, exceeding guidance [51] - Product revenue grew 19%, driven by software form factors, while total services revenue increased by 15% [51] - Remaining performance obligation (RPO) grew 24% year-over-year to $15,800,000,000, marking the highest RPO growth in seven quarters [53] - Total gross margin was 75.8%, with product gross margin at 76.8% [56] - Operating margins expanded by 340 basis points, reaching above 30% for the first time in company history [59] Business Line Data and Key Metrics Changes - Next generation security annual recurring revenue (ARR) reached $5,580,000,000, growing 32% year-over-year [55] - Software firewalls and SASE were notable growth drivers, with software firewalls ARR up nearly 20% year-over-year [25][55] - The software firewall market share is nearly 50%, with significant contributions from cloud service providers [26] Market Data and Key Metrics Changes - The Americas grew 15%, EMEA up 19%, and JPEG up 13% [52] - AI ARR reached approximately $545,000,000 in Q4, up over two and a half times year-over-year [55] - SASE ARR grew 35% year-over-year, more than twice as fast as the overall market [30] Company Strategy and Development Direction - The company aims to achieve $15,000,000,000 in next generation security ARR by FY 2030, focusing on platformization and integrated solutions [19] - The strategy includes leveraging AI to enhance security offerings and address the evolving cybersecurity landscape [12][41] - The company is pursuing the acquisition of CyberArk to enhance its identity security capabilities and expand its market presence [46][67] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for cybersecurity solutions, particularly in cloud and AI transformations [11] - The company anticipates continued growth driven by software firewalls and SASE, with expectations for double-digit product revenue growth in FY 2026 [41][66] - Management highlighted the importance of platformization as a key driver for customer commitment and improved security outcomes [39] Other Important Information - The company completed the acquisition of ProtectAI, enhancing its AI security capabilities [12] - A leadership transition was announced, with Lee Klarich appointed as Chief Product and Technology Officer [49][50] Q&A Session Summary Question: Insights on security consolidation and market dynamics - Management emphasized that consolidation in the security market is a gradual process, with potential for significant growth in market share as customers recognize the value of platformization [69][72] Question: Drivers behind strong bookings and execution - Management attributed the strong bookings to effective execution and the benefits of platformization, while noting that macroeconomic conditions remain stable [80][84] Question: Network security ARR and software firewall market share - Management discussed the shift towards software firewalls driven by cloud transformation, highlighting the company's competitive position in the software segment [90]

Let's get another check on cyber security giant PaloAlto Networks. Those shares are higher, up about 5% right now after a strong beat, but off the best levels. That conference call kicking off in under a half an hour.Joining us now is Evercore Enterprise software research analyst Peter Lavine. He has an outperform rating on the stock. Peter, it's great to have you on.Your thoughts on this print, which had better than expected quarterly results, but also it looks like stronger than expected guidance. Yeah, a ...

Financial Performance - Shares are up approximately 7% driven by the higher guide [1] - Earnings per share reached 95 cents, exceeding estimates [1] - Q1 earnings per share are guided between 88 cents and 90 cents, surpassing street expectations [1] - Q1 revenue guide is also higher than what the street anticipated [1] Key Metrics - Remaining purchase obligation (RPO) is a key metric for cybersecurity software companies, indicating revenue backlog [2] - The company is guiding between 154 billion and 155 billion for RPO, exceeding consensus [2] Market Dynamics - The report is viewed as positive overall [2] - Many long-only funds hold this name, unlike competitors Checkpoint and Fortnite, which experienced declines after less impressive guides [3]

Group 1 - Palo Alto Networks reported a 16% increase in revenue for the fiscal fourth quarter, reaching approximately $2.54 billion, compared to about $2.2 billion in the previous year [1][5] - Net income decreased to about $254 million, or 36 cents per share, down from approximately $358 million, or 51 cents per share, in the same period last year [1] - The company provided optimistic guidance for the fiscal first quarter, projecting earnings per share between 88 cents and 90 cents, exceeding the StreetAccount estimate of 85 cents [2] Group 2 - For the full fiscal year, Palo Alto expects revenue to range from $10.48 billion to $10.53 billion, with adjusted earnings between $3.75 and $3.85 per share, both surpassing Wall Street projections [2] - Remaining purchase obligations, which indicate backlog, are anticipated to be between $15.4 billion and $15.5 billion, exceeding the estimate of $15.07 billion [3] - The company announced plans to acquire CyberArk for $25 billion, marking its largest deal since inception and reflecting an aggressive acquisition strategy under CEO Nikesh Arora [3] Group 3 - Following the announcement of the acquisition, shares experienced a sharp sell-off, resulting in a 3% decline year-to-date as of the latest close [4] - Lee Klarich will succeed Nir Zuk as CTO and will also join the board, as Zuk retires from his role [4]

Palo Alto jumped on a stronger-than-expected annual forecast, as the company seeks to provide customers with a bundle of AI-enabled cybersecurity products to fend off attacks https://t.co/xoqLHTzBko ...

Financial Performance - Q4 2025 Remaining Performance Obligation (RPO) reached $158 billion, a 24% year-over-year increase[11] - Next-Generation Security Annual Recurring Revenue (NGS ARR) for Q4 2025 was $558 billion, up 32% year-over-year[11] - Q4 2025 revenue totaled $254 billion, representing a 16% year-over-year growth[11] - The company's FY 2025 adjusted free cash flow was $351 billion, a 12% increase year-over-year, with an adjusted free cash flow margin of 380%[11] - FY 2025 non-GAAP operating margin was 288%, a 150 basis point increase year-over-year, and non-GAAP EPS was $334, up 18% year-over-year[11] Platformization and Customer Growth - The company has approximately 1,400 total platformizations[14] - Platformized customers exhibit a net retention rate (NRR) of 120%[14] - The number of customers with over $5 million in NGS ARR increased by 51% year-over-year, reaching 156, while those with over $10 million in NGS ARR increased by 50% year-over-year, totaling 51[18] Network Security and SASE - Network Security NGS ARR reached $39 billion, growing approximately 35% year-over-year[21] - SASE ARR grew by 35% year-over-year[23] - The company has approximately 6,350 SASE customers, an 18% increase year-over-year[23] Cortex and Security Operations - Total Cortex & Prisma Cloud ARR is approximately $17 billion, up approximately 25% year-over-year[24] - The company has approximately 400 XSIAM customers, more than double year-over-year[25]