Core Insights - Palo Alto Networks (PANW) reported revenue of $2.29 billion for the quarter ended April 2025, reflecting a year-over-year increase of 15.3% [1] - Earnings per share (EPS) for the quarter was $0.80, up from $0.66 in the same quarter last year, with an EPS surprise of +3.90% compared to the consensus estimate of $0.77 [1] Financial Performance Metrics - Remaining Performance Obligation (RPO) stood at $13.5 billion, slightly below the average estimate of $13.54 billion from six analysts [4] - Product revenue reached $452.70 million, exceeding the estimated $420.05 million, marking a 15.8% increase year-over-year [4] - Subscription and support revenue totaled $1.84 billion, slightly below the estimated $1.85 billion, with a year-over-year increase of 15.2% [4] - Subscription support revenue was $601.90 million, surpassing the estimate of $599.36 million, reflecting a 9.8% year-over-year growth [4] - Subscription revenue was $1.23 billion, below the estimate of $1.25 billion, but still showing an 18.1% increase compared to the previous year [4] - Non-GAAP product gross profit was $355.10 million, exceeding the average estimate of $329.84 million [4] - Non-GAAP subscription and support gross profit was $1.39 billion, slightly below the average estimate of $1.43 billion [4] - GAAP subscription and support gross profit was $1.32 billion, compared to the average estimate of $1.37 billion [4] - GAAP product gross profit was $352 million, exceeding the estimate of $330.75 million [4] Stock Performance - Palo Alto's shares have returned +21.4% over the past month, outperforming the Zacks S&P 500 composite's +13.1% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Insights - Palo Alto Networks (PANW) reported quarterly earnings of $0.80 per share, exceeding the Zacks Consensus Estimate of $0.77 per share, and up from $0.66 per share a year ago, representing an earnings surprise of 3.90% [1] - The company achieved revenues of $2.29 billion for the quarter ended April 2025, surpassing the Zacks Consensus Estimate by 0.57%, and an increase from $1.98 billion year-over-year [2] - The stock has gained approximately 6.8% since the beginning of the year, outperforming the S&P 500's gain of 1.4% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.86 on revenues of $2.49 billion, and for the current fiscal year, it is $3.22 on revenues of $9.16 billion [7] - The estimate revisions trend for Palo Alto has been unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Security industry, to which Palo Alto belongs, is currently ranked in the top 35% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - Total revenue for Q3 was $2,290,000,000, representing a 15% year-over-year growth, at the high end of the guided range [36] - Product revenue grew by 16%, while total services revenue increased by 15% [36] - Next Generation Security ARR surpassed $5,000,000,000, ending the quarter at $5,090,000,000, a growth of 34% year-over-year [39] - Adjusted free cash flow generated in Q3 was $578,000,000 [44] - Total gross margin was 76%, with product gross margin at 78.4% [42] Business Line Data and Key Metrics Changes - Subscription revenue within total services grew by 18%, while support revenue rose by 10% [36] - Software firewall ARR grew approximately 20% year-over-year, driven by public cloud deployments [26] - SASE ARR grew 36% year-over-year, with 40% of SASE customers being net new to the company [28] - AI ARR reached approximately $400,000,000 in Q3, up over 2.5 times year-over-year [39] Market Data and Key Metrics Changes - The Americas region grew by 12%, EMEA by 20%, and JPEG by 23% [37] - The average duration of new contracts remained at approximately three years, with a slight decrease year-over-year [37] Company Strategy and Development Direction - The company is focused on a platformization strategy, which is resonating with customers and resulting in larger deals [6][8] - The urgency to adopt AI is becoming a strategic imperative for customers, leading to increased investments in technology transformation [10][12] - The company aims to reach a target of $15,000,000,000 in ARR by FY30 [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving adjusted free cash flow margin targets over the next few years [9] - The geopolitical environment has caused some uncertainty, but the company has executed well despite challenges [84] - There is strong momentum heading into the fiscal year-end, with expectations for a robust Q4 pipeline [33] Other Important Information - The company announced its intention to acquire Protect.ai for $700,000,000 to enhance its AI security capabilities [45] - The transition to a contract manufacturing facility in Texas is expected to benefit from scale and innovation [42] Q&A Session Questions and Answers Question: How are customers thinking about the upgrade from QRadar on-premise? - Management highlighted a strong partnership with IBM to facilitate the transition from on-premise SOC to cloud-delivered SOC, indicating a significant ARR opportunity [50][51] Question: Can you unpack the details behind the product revenue growth? - Management noted that product revenue growth is driven by both hardware and software, with a notable inflection in the software firewall business due to increased AI adoption [62][66] Question: What does the AI imperative mean for Palo Alto Networks? - Management indicated that securing AI implementations is becoming a priority, leading to faster adoption of cloud firewalls and a shift from hardware to software [76][77] Question: How is the company navigating geopolitical volatility? - Management acknowledged that April was an anomalous month but expressed pride in the team's execution during a challenging quarter [84][85] Question: How does the company plan to evolve its AI product portfolio? - Management emphasized the importance of runtime security in AI and the acquisition of Protect.ai to enhance capabilities in this area [89][95]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $2,290,000,000, representing a 15% year-over-year growth, at the high end of the guided range [34] - Product revenue grew by 16%, while total services revenue increased by 15% [34] - Next Generation Security ARR surpassed $5,000,000,000, ending the quarter at $5,090,000,000, a growth of 34% year-over-year [37] - Adjusted free cash flow generated in Q3 was $578,000,000 [42] Business Line Data and Key Metrics Changes - Subscription revenue within total services grew by 18%, and support revenue rose by 10% [34] - Software firewall ARR grew approximately 20% year-over-year, driven by public cloud deployments [25] - SASE ARR grew 36% year-over-year, with 40% of SASE customers being net new to Palo Alto Networks in Q3 [26] Market Data and Key Metrics Changes - The Americas grew by 12%, EMEA by 20%, and JPEG by 23% [35] - The average duration of new contracts remained at approximately three years, with a slight decrease year-over-year [35] Company Strategy and Development Direction - The company is focused on a platformization strategy, which is resonating with customers and resulting in larger deals [5] - There is a strong emphasis on AI integration, with the urgency for customers to adopt AI becoming a strategic imperative [8] - The company aims to reach a $15,000,000,000 ARR target for FY30 [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving adjusted free cash flow margin targets over the next few years [7] - The geopolitical environment has caused some uncertainty, but the company has executed well despite challenges [82] - There is optimism about strong momentum heading into Q4, driven by continued transformation and a robust pipeline [32] Other Important Information - The company announced its intention to acquire Protect.ai for $700,000,000 to enhance its AI security capabilities [43] - The company is transitioning to a contract manufacturing facility in Texas to benefit from scale and mitigate tariffs [40] Q&A Session Summary Question: How are customers thinking about upgrading from QRadar on-premise? - Management highlighted the significant ARR uplift from transitioning customers from on-premise SOC to cloud-delivered SOC, emphasizing the potential for large deals [49][50] Question: Can you unpack the details behind product revenue growth? - Management noted that product revenue growth is driven by both hardware and software, with a notable inflection in the software firewall business due to increased AI adoption [60][66] Question: What does the AI opportunity mean for Palo Alto Networks? - Management indicated that securing AI implementations is becoming a priority for customers, leading to faster adoption of cloud firewalls and a shift from hardware to software [72][76] Question: How is the company navigating geopolitical volatility? - Management acknowledged that April was an anomalous month due to geopolitical tensions but expressed pride in the team's execution during that period [82] Question: How does the company plan to evolve its AI product portfolio? - Management discussed the importance of runtime security in AI and the acquisition of Protect.ai to enhance capabilities in this area [88][94]

Palo Alto Networks signage displays on the screen at the Nasdaq Market in New York City, U.S., March 25, 2025.Palo Alto Networks reported better-than-expected earnings and revenue for the latest quarter but its gross margin was below estimates. The stock dropped 4% in extended trading on Tuesday.Here's how the company did, compared to analysts' consensus estimates from LSEG:Earnings per share: 80 cents, adjusted vs. 77 cents expectedRevenue: $2.29 billion vs. $2.28 billion expectedSales in the company's fis ...

Q3 Fiscal Year 2025 Performance - Palo Alto Networks surpassed a $5.09 billion milestone in Next-Generation Security Annual Recurring Revenue (NGS ARR), representing a 34% year-over-year increase[8] - The company's Remaining Performance Obligation (RPO) reached $13.5 billion, a 19% increase year-over-year[8] - Total revenue for Q3'25 was $2.29 billion, up 15% year-over-year[8] - Non-GAAP operating income was $627 million, a 23% increase year-over-year[8] - Non-GAAP EPS was $0.80, a 21% increase year-over-year[8] - Adjusted Free Cash Flow (non-GAAP) was $578 million[8] Platformization and Growth Drivers - The company added approximately 900 net new platformizations in Q3'25[11] - There are approximately 1,250 total platformizations[11] - The number of customers with >$5 million NGS ARR is 130, a 41% year-over-year increase[11] - The number of customers with >$10 million NGS ARR is 44, a 63% year-over-year increase[11] - Cortex XSIAM ARR experienced growth of over 200% year-over-year[16] - Approximately 70% of Software Firewall ARR is deployed in the public cloud[21] - Software Firewall ARR grew by approximately 20% year-over-year[21] - SASE ARR grew by 36% year-over-year[25] - Approximately 3 million licenses have been sold for Prisma Access Browser (PAB)[28] - Approximately one-third of Prisma Access seats sold in Q3 were for Prisma Access Browser[28] - AI ARR reached approximately $400 million in Q3'25[38] Guidance - The company projects Next-Gen Security ARR of $5.52 billion - $5.57 billion for fiscal year 2025, representing a 31%-32% year-over-year increase[44] - The company projects total revenue of $9.17 billion - $9.19 billion for fiscal year 2025, representing a 14% year-over-year increase[44]

Exhibit 99.1 Palo Alto Networks Reports Fiscal Third Quarter 2025 Financial Results SANTA CLARA, Calif., May 20, 2025 — Palo Alto Networks (NASDAQ: PANW), the global cybersecurity leader, announced today financial results for its fiscal third quarter 2025, ended April 30, 2025. Total revenue for the fiscal third quarter 2025 grew 15% year over year to $2.3 billion, compared with total revenue of $2.0 billion for the fiscal third quarter 2024. GAAP net income for the fiscal third quarter 2025 was $0.3 billio ...

Core Viewpoint - Palo Alto Networks reported a 15% year-over-year revenue growth for fiscal Q3 2025, reaching $2.3 billion, while maintaining strong profitability metrics [2][8]. Financial Performance - Total revenue for fiscal Q3 2025 was $2.3 billion, up from $2.0 billion in fiscal Q3 2024, reflecting a 15% increase [2][8]. - GAAP net income for fiscal Q3 2025 was $0.3 billion, or $0.37 per diluted share, compared to $0.3 billion, or $0.39 per diluted share, in the same quarter of the previous year [2][3]. - Non-GAAP net income for fiscal Q3 2025 was $0.6 billion, or $0.80 per diluted share, an increase from $0.5 billion, or $0.66 per diluted share, in fiscal Q3 2024 [3][22]. Strategic Developments - The company achieved a significant milestone by surpassing $5 billion in Next-Gen Security Annual Recurring Revenue (ARR), which grew 34% year-over-year to $5.1 billion [4][8]. - Remaining performance obligation increased by 19% year-over-year to $13.5 billion, indicating strong future revenue visibility [8][9]. Financial Outlook - For fiscal Q4 2025, the company expects Next-Gen Security ARR to be between $5.52 billion and $5.57 billion, representing a year-over-year growth of 31% to 32% [9]. - Total revenue guidance for fiscal year 2025 is projected to be between $9.17 billion and $9.19 billion, reflecting a year-over-year growth of 14% [9]. Operational Metrics - Non-GAAP operating margin for fiscal Q3 2025 was reported at 27.4%, compared to 25.6% in the same quarter of the previous year [21]. - The company’s total gross profit for fiscal Q3 2025 was $1.67 billion, up from $1.47 billion in fiscal Q3 2024 [20].

Company Overview - Proactive is a financial news publisher that provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2] - The company has a team of experienced and qualified news journalists who produce independent content [2] Market Focus - Proactive specializes in medium and small-cap markets while also covering blue-chip companies, commodities, and broader investment stories [3] - The content includes insights across various sectors such as biotech and pharma, mining and natural resources, battery metals, oil and gas, crypto, and emerging digital and EV technologies [3] Technology Adoption - Proactive is recognized for its forward-looking approach and enthusiastic adoption of technology to enhance workflows [4] - The company utilizes automation and software tools, including generative AI, while ensuring that all content is edited and authored by humans [5]

Core Viewpoint - Palo Alto Networks is expected to report strong fiscal Q3 2025 results, driven by increased cybersecurity deal activity and a focus on platformization, with a price forecast of $225 from Wedbush analyst Daniel Ives [1][8]. Group 1: Financial Projections - The company anticipates Next-Gen Security Annual Recurring Revenue (NGS ARR) between $5.03 billion and $5.08 billion, reflecting a year-over-year increase of 33%-34% [9]. - Palo Alto Networks projects its Remaining Performance Obligation (RPO) to reach $13.50 billion to $13.60 billion, indicating a 19% to 20% year-over-year growth [9]. - For fiscal year 2025, total revenue is expected to increase by 14% year-over-year, with projected revenue of $9.17 billion and EPS of $3.21 [7][9]. Group 2: Strategic Initiatives - The company is focusing on a platformization strategy, which is expected to generate a more stable pipeline of deals, particularly with the increasing adoption of cloud services [2][4]. - Key products driving this strategy include XSIAM and Cortex XDR, which are supported by a steady booking pipeline of multi-million dollar deals [5]. - The recent launch of its AI suite, including Access and security posture management, is anticipated to enhance the scale of its platformization approach [6]. Group 3: Market Position and Trends - Palo Alto Networks is well-positioned to benefit from the AI Revolution, as cybersecurity is increasingly linked to enterprise AI initiatives [6]. - The company is expected to see incremental deal flow as more enterprises adopt AI projects, enhancing its market share in the cybersecurity landscape [5][6]. - The analyst notes that the focus of the upcoming conference call will be on deal metrics and insights from CEO Nikesh Arora, indicating a strong emphasis on performance and growth [7].