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Palo Alto Networks Rises 19.5% YTD: Time to Hold or Book Profits?
ZACKS· 2025-10-09 15:51
Key Takeaways Palo Alto Networks shares are up 19.5% YTD, underperforming the Security industry's 20.6% growth.Revenues and NGS ARR growth are slowing, with fiscal 2026 sales projected to rise about 14%.AI innovations like Cortex XSIAM, Prisma AIRS and a planned CyberArk deal support long-term growth.Palo Alto Networks, Inc. ((PANW) shares have gained 19.5% year to date, underperforming the Zacks Security industry’s growth of 20.6%. The stock has also underperformed its industry peers and competitors, inclu ...
Tigress Financial Partners Initiates Coverage on Palo Alto Networks, Inc. (PANW) with Buy Rating and $245 PT
Yahoo Finance· 2025-10-01 23:40
Core Insights - Palo Alto Networks, Inc. (NASDAQ:PANW) is recognized as one of the best quality stocks to buy according to hedge funds, driven by hedge fund interest and significant profit margins [1] - Tigress Financial Partners initiated coverage on Palo Alto Networks with a Buy rating and a price target of $245, highlighting the company's growth in AI-powered security solutions and strong platform adoption [2] - The company's recent fourth-quarter fiscal 2025 sales growth of 15.8% year over year exceeded analyst forecasts, driven by demand for SASE, XSIAM, and virtual firewall solutions [3] Company Performance - Palo Alto Networks is well-positioned to capitalize on the increasing global demand for cybersecurity, influenced by sophisticated cyber threats, rapid digital transformation, cloud migration, and the adoption of generative AI [3] - The company offers a range of cybersecurity solutions across various regions, including Prisma Access, Strata Cloud Manager, and Prisma AIRS, to safeguard AI ecosystems [4] Market Position - The emphasis on strategic investments in research and development, acquisitions, and careful capital allocation supports the robust growth in the subscription-based Next-Generation Security business [2] - Despite the positive outlook for Palo Alto Networks, there are suggestions that certain AI stocks may offer greater upside potential with less downside risk [5]
PANW Bets on Prisma AIRS: Is it the Key to Future Platform Growth?
ZACKS· 2025-09-29 13:30
Core Insights - Palo Alto Networks (PANW) is enhancing its platform with the introduction of Prisma AIRS, an AI runtime security product aimed at protecting AI applications, models, and data as enterprises increasingly adopt AI tools [1][10] - The company anticipates new attack surfaces emerging from the use of generative AI, necessitating solutions like Prisma AIRS to provide visibility, data loss prevention, and compliance safeguards [2][4] Company Performance - In Q4 of fiscal 2025, Palo Alto Networks reported AI-related Annual Recurring Revenues (ARR) of $545 million, which is 2.5 times higher than the same quarter last year [3][10] - The company aims to achieve a long-term goal of $15 billion in ARR by fiscal 2030, with Prisma AIRS expected to play a crucial role in this strategy [5][10] - The Zacks Consensus Estimate for Palo Alto Networks' total revenues in fiscal 2026 is $10.43 billion, reflecting a year-over-year increase of 13.1% [5] Competitive Landscape - Competitors such as CrowdStrike and Zscaler are also expanding their platforms and innovating with AI, with CrowdStrike reporting $4.66 billion in ARR, a 20% year-over-year growth, and Zscaler reporting $2.9 billion in ARR, reflecting 23% year-over-year growth [6][7] Valuation and Estimates - Palo Alto Networks trades at a forward price-to-sales ratio of 12.71X, slightly below the industry's average of 13.06X [12] - The Zacks Consensus Estimate for fiscal 2026 and 2027 earnings indicates year-over-year growth of 13.2% and 13.4%, respectively, with upward revisions in estimates over the past 30 to 60 days [15]
Palo Alto Networks Unveils AI-Generated Ad Campaign, Showcasing Secure Innovation in Action
Prnewswire· 2025-09-18 12:15
Core Insights - Palo Alto Networks has launched an AI-powered advertising campaign titled "Be A Genius. Deploy Bravely," which aims to showcase the company's innovative approach to marketing in the digital age [1][3][7] - The campaign features a ten-part series of ads highlighting historical innovators and is being distributed across major business media and social platforms [3][4] Campaign Development - The campaign was developed using AI tools, significantly reducing production time and costs, with timelines cut from an average of nine months to just one week per ad video [6] - The cost of producing one AI-generated ad was less than $1,000, compared to previous campaigns that cost tens of millions [6] Creative Process - AI was utilized to enhance various phases of the creative lifecycle, including concept creation, content generation, and localization, allowing the in-house team to generate ideas and visuals without external agencies [4][5] - AI models were employed to assess the effectiveness of the creative content before finalization, optimizing messaging and visuals for better audience engagement [5] Marketing Strategy - The Chief Marketing Officer emphasized the importance of AI in transforming marketing practices, aiming to set a new industry benchmark for speed, engagement, and efficiency [7] - The campaign reflects the broader trend of organizations leveraging AI to innovate and improve business processes, highlighting the need for secure AI adoption [7] Company Overview - Palo Alto Networks is recognized as a global leader in AI and cybersecurity, providing comprehensive AI-powered security solutions to over 70,000 organizations worldwide [8][9]
OKTA Rides on New Solutions: Is the Growth Rate Sustainable?
ZACKS· 2025-09-02 18:41
Core Insights - Okta (OKTA) is experiencing strong demand for its new identity solutions, which are contributing to market share gains and revenue growth [1][2] Financial Performance - In Q2 2025, Okta's total revenues increased by 12.7% year over year to $728 million, exceeding consensus estimates by 2.37% [2][9] - The number of customers with over $100K in Annual Contract Value (ACV) rose by more than 7% year over year to 4,945, indicating strong subscription momentum [2][9] - For fiscal 2026, Okta anticipates revenue growth of 10% to 11% compared to fiscal 2025, with the Zacks Consensus Estimate for fiscal 2026 revenues at $2.87 billion, reflecting a 10.1% increase from fiscal 2025 [4][9] Product and Market Position - Okta is providing a comprehensive secure identity fabric for non-human identities (NHIs), offering visibility, access control, governance, and monitoring similar to human identities [3] - The introduction of Cross App Access, a new open standard, is expected to further enhance subscription revenues in the long term [2] Competitive Landscape - Okta faces significant competition in the security domain from companies like SentinelOne and Palo Alto Networks, which are focusing on endpoint security and next-generation security solutions, respectively [5][6] - Palo Alto Networks reported a 32% year-over-year growth in its Next-Generation Security annual recurring revenue (ARR), reaching $5.58 billion, highlighting the competitive pressures in the market [6] Stock Performance - Okta's shares have appreciated by 17.7% year to date, outperforming the broader Zacks Computer and Technology sector's return of 12.9% and the Zacks Security industry's appreciation of 10.2% [7]
PANW's NGS ARR Hits $5.58B in Q4: What's Fueling the Growth?
ZACKS· 2025-09-01 15:46
Core Insights - Palo Alto Networks (PANW) demonstrated strong growth in its Next-Generation Security (NGS) business, with annual recurring revenue (ARR) increasing by 32% year over year to $5.58 billion, adding approximately $490 million in new NGS ARR during the fourth quarter of fiscal 2025 [1][9]. Growth Drivers - The growth in NGS ARR was driven by three main areas: 1. The Security Access Service Edge (SASE) business saw a 35% year-over-year growth, highlighted by a $60 million contract with a global professional services firm covering 200,000 users. Additionally, the Prisma Access Browser gained over three million new licenses in the fourth quarter, doubling its sequential growth and surpassing six million total licenses [2][9]. 2. Software firewalls experienced nearly 20% year-over-year growth, with Palo Alto Networks capturing about 50% of the market share, making its products available across all major public clouds [3]. 3. The AI-based Security Operations Centre platform, XSIAM, continued to gain traction with around 400 customers, most generating over $1 million in ARR, and approximately 25% of these customers being Global 2000 companies [3]. AI Security Impact - AI security is becoming increasingly important for revenue growth, with AI-related ARR reaching $545 million, more than 2.5 times higher than the previous year. This growth was supported by new product launches, including Prisma AIRS and the acquisition of Protect AI, aimed at securing AI applications, models, and data [4]. Competitive Landscape - Competitors such as CrowdStrike and Zscaler are also expanding their platforms and innovating with AI. CrowdStrike reported $4.66 billion in ARR, reflecting a 20% year-over-year growth, while Zscaler achieved $2.9 billion in ARR, with a 23% year-over-year growth [5][6]. Valuation and Earnings Estimates - Palo Alto Networks trades at a forward price-to-sales ratio of 12.05X, slightly below the industry average of 12.23X [11]. The Zacks Consensus Estimate for fiscal 2026 and 2027 earnings indicates year-over-year growth of 12.9% and 13.6%, respectively, with upward revisions in estimates over the past 30 days [14].
Is This Underrated Artificial Intelligence (AI) Stock the Next Big Winner?
The Motley Fool· 2025-08-26 08:05
Core Insights - The adoption of AI in the cybersecurity industry is expected to drive significant growth, with projections indicating an annual growth rate of over 24% through 2030, potentially adding nearly $70 billion to the industry's revenue over the next five years [2]. Company Performance - Palo Alto Networks reported a 16% year-over-year increase in revenue to $2.5 billion for its fiscal 2025 fourth quarter, with adjusted earnings rising by 27% [5]. - The company's remaining performance obligations (RPO) grew by 24% year-over-year to $15.8 billion, indicating a faster acquisition of new contracts compared to revenue fulfillment [6]. AI Integration and Product Development - The integration of AI tools into Palo Alto's platform is expected to enhance growth, with CEO Nikesh Arora noting a rapid adoption of Generative AI, which saw a traffic increase of over 890% in 2024 [6]. - Palo Alto completed the acquisition of Protect AI for $500 million, which will enhance its AI-native Prisma AIRS platform, providing comprehensive security for enterprise AI applications [7]. Customer Engagement and Market Strategy - The company has seen a 40% year-over-year increase in the number of platformizations, reaching 1,400 customers among its top 5,000 accounts, with expectations to grow this number to between 2,500 and 3,000 in the next five years [8]. - Palo Alto's bundling strategy categorizes its products into network security, cloud security, and AI-driven security, attracting more customers and increasing deal sizes [9]. Future Outlook - The company is likely to maintain its position as a leading cybersecurity player due to its focus on an end-to-end, AI-driven platform, which is expected to result in stronger revenue and earnings growth [11]. - Analysts project a 12-month median price target of $220 for Palo Alto's stock, suggesting an 18% potential increase from current levels, with the possibility of exceeding this target through ongoing product development and acquisitions [14].
AI网安需求激增!Palo Alto(PANW.US)2026年业绩指引超预期 股价应声大涨
Zhi Tong Cai Jing· 2025-08-19 00:11
Core Viewpoint - Palo Alto Networks reported better-than-expected fiscal year 2026 guidance driven by surging demand for AI-driven cybersecurity solutions, resulting in a 5% increase in stock price during after-hours trading [1] Financial Performance - For the fourth quarter ending July 31, Palo Alto's revenue grew 16% year-over-year to $2.54 billion, exceeding market expectations of $2.5 billion [1] - Product revenue reached $573.9 million, up 19% year-over-year; subscription and support services revenue was $1.96 billion, a 15% increase [1] - Annual recurring revenue (ARR) for next-generation security solutions hit $5.6 billion, surpassing analyst expectations of $5.55 billion [1] - Deferred revenue at the end of the period was $6.3 billion, with remaining performance obligations (RPO) totaling $15.8 billion [3] - Net profit was $254 million (or $0.36 per share), down from $358 million (or $0.51 per share) year-over-year, but adjusted earnings per share reached $0.95, exceeding the expected $0.88 [3] Future Outlook - The company forecasts full-year revenue between $10.48 billion and $10.53 billion, above the analyst average expectation of $10.43 billion; adjusted earnings per share are projected at $3.75 to $3.85, also exceeding the market expectation of $3.67 [5] - For the first quarter, revenue guidance is set at $2.45 billion to $2.47 billion, and adjusted earnings per share at $0.88 to $0.90, both better than market expectations [5] - The anticipated remaining performance obligations are between $15.4 billion and $15.5 billion, significantly above the expected $15.07 billion [5] Market Context - The company is benefiting from a technology upgrade cycle driven by AI as enterprises accelerate cloud migration and upgrade security systems amid frequent data breach incidents [5] - Recent significant cyberattacks on multinational companies like Microsoft, UnitedHealth, Disney, and Oracle have increased market demand for effective security solutions [5] - Palo Alto's new offerings, including the "Cortex Cloud" security platform and the AI application protection platform "Prisma AIRS," along with a planned $25 billion acquisition of CyberArk, are expected to enhance its cybersecurity product matrix [6] Leadership Changes - The company announced the retirement of founder and CTO Nir Zuk after over 20 years, with Lee Klarich, a senior product leader, appointed as the new CTO and joining the board [6] - Klarich will also serve as the chairman of the board's security committee to strengthen the company's AI-driven platform strategy [6]
Palo Alto(PANW) - 2025 Q4 - Earnings Call Transcript
2025-08-18 21:32
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]
Palo Alto(PANW) - 2025 Q4 - Earnings Call Transcript
2025-08-18 21:30
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]