Key Takeaways PANW's SASE business grew ARR 36% YoY in Q3 FY25, more than double the overall market growth. Prisma Access Browser drove one-third of seats sold, with 3M licenses sold since acquiring Talon. PANW added 6,000 SASE customers, with 40% of Q3 additions being net new to the company.Palo Alto Networks (PANW) is showing robust growth in Secure Access Service Edge (SASE), its cloud-based network security offering. In the third quarter of fiscal 2025, SASE was its fastest-growing business, with the ...

Core Insights - Zscaler (ZS) is experiencing strong momentum in its Data Security Everywhere strategy, which is becoming essential across all industries due to the rise of GenAI and security-as-a-service (SaaS) usage [1][4] Group 1: Data Security Expansion - In Q3 FY25, Zscaler's data security capabilities now encompass structured and unstructured data, both in motion and at rest, across various channels including web, email, SaaS, endpoints, and GenAI applications [2][9] - A Fortune 50 automotive customer signed a seven-figure Annual Contract Value (ACV) deal, increasing their annual spend with Zscaler by over 50% to well above $10 million after adopting six out of eight data security modules [3][9] - Zscaler secured another seven-figure ACV deal with a new Fortune 100 food and beverage company, further demonstrating the traction of its data security strategy beyond regulated sectors [4][9] Group 2: Competitive Landscape - Competitors like Palo Alto Networks (PANW) and CrowdStrike (CRWD) are also adapting their platforms to meet enterprise security demands, with PANW highlighting the growing traction of its Prisma Access Browser [5] - CrowdStrike is leveraging its Charlotte AI to enhance automated and scalable cybersecurity, positioning it as a key differentiator in the market [6] Group 3: Financial Performance and Valuation - Zscaler's shares have surged 69.1% year to date, significantly outperforming the Security industry's growth of 20.2% [7] - Zscaler trades at a forward price-to-sales ratio of 15.1X, slightly above the industry average of 14.52X [11] - The Zacks Consensus Estimate for Zscaler's fiscal 2025 earnings indicates a year-over-year decline of 0.31%, while fiscal 2026 earnings are expected to grow by 12.13% [14]

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]

CHINA - 2023/11/10: In this photo illustration, the American multinational cybersecurity company ... More Palo Alto Networks logo seen displayed on a smartphone with an Artificial intelligence (AI) chip and symbol in the background. (Photo Illustration by Budrul Chukrut/SOPA Images/LightRocket via Getty Images)SOPA Images/LightRocket via Getty ImagesPalo Alto Networks is scheduled to report earnings after Tuesday’s close. The stock hit a record high near $208.39/share in 2025 and, as of this writing, it is ...

Palo Alto Networks, Inc. (PANW) is scheduled to report its third-quarter fiscal 2025 results on May 20.Palo Alto Networks projects its fiscal third-quarter revenues in the range of $2.26-$2.29 billion, which suggests a year-over-year increase of 14-15%. The Zacks Consensus Estimate is pegged at $2.27 billion, which implies growth of 14.6% from the year-ago reported figure.After a two-for-one stock split of PANW stocks on Nov. 20, 2024, the consensus mark for PANW’s fiscal third-quarter non-GAAP earnings has ...

Summary of Palo Alto Networks (PANW) Conference Call - April 29, 2025 Company Overview - **Company**: Palo Alto Networks (PANW) - **Industry**: Cybersecurity Key Points and Arguments Cybersecurity Landscape - The cybersecurity industry is experiencing a significant transformation driven by artificial intelligence (AI) [4][6][14] - AI is recognized as a powerful force, comparable to historical paradigm shifts like electricity [6] - The emergence of AI has introduced new attack vectors, necessitating a shift towards real-time security measures [16][17] AI Integration and Strategy - PANW emphasizes the importance of using AI safely and effectively within cybersecurity [7][8] - The company is focused on integrating AI into its products to enhance operational efficiency and customer support [10][25] - AI tools are expected to empower employees to focus on creativity and innovation while automating routine tasks [10] Real-Time Security Needs - The time for attackers to exfiltrate data has decreased to under an hour, highlighting the need for real-time protection [17] - PANW is pivoting towards solutions that not only detect threats but also provide immediate remediation [18][29] Product Development and Innovation - PANW is developing two main platforms: the network security platform and the Cortex platform, which aims to replace traditional security information and event management (SIEM) systems [16] - The company is ingesting 11 petabytes of data daily, which is being utilized to enhance security measures and incident response [33] - The introduction of XIM (Extended Intelligence Management) is aimed at consolidating security data and automating incident response [55][94] AI and Automation in Vulnerability Management - The company is focusing on automating vulnerability management to address the increasing speed of exploitations [61] - AI-driven analytics are being integrated to prioritize vulnerabilities and automate remediation processes [62] Email Security Enhancements - PANW is enhancing its email security capabilities to address sophisticated attacks, leveraging AI to analyze email intent and context [72][73] - The integration of various data sources is critical for effective email threat detection and response [73] Future of Agentic AI - The concept of agentic AI is being explored, where AI can autonomously take actions on behalf of users, requiring a high level of trust [84][88] - PANW is developing specialized AI agents that can learn and improve over time, enhancing their ability to respond to security threats [90] Customer Engagement and Feedback - The company values customer feedback and collaboration in developing its products and solutions [41] Additional Important Content - The conference highlighted the rapid evolution of AI in cybersecurity and the need for organizations to adapt their security architectures to accommodate real-time data processing and response [49][50] - PANW's commitment to innovation is evident in its ongoing development of AI-driven solutions that aim to transform the cybersecurity landscape [97] This summary encapsulates the key themes and insights from the Palo Alto Networks conference call, emphasizing the company's strategic focus on AI integration, real-time security, and innovative product development in the cybersecurity industry.

Core Insights - Palo Alto Networks has launched Prisma Access Browser 2.0, the world's only SASE-native secure browser, aimed at enhancing security in a cloud-first environment [1][4] - The new browser is designed to secure generative AI usage, improve user experience, and enhance operational resilience in modern workplaces [1][5] Group 1: Product Features and Innovations - Prisma Access Browser 2.0 provides real-time visibility and access control to secure generative AI adoption, preventing data leaks through context-based classification [5] - The browser includes advanced protection against sophisticated web attacks, utilizing Precision AI to detect evasive threats such as AI-generated cloaking and phishing attacks [5] - New features also include Endpoint Data Loss Prevention (DLP) to enhance data classification accuracy and safeguard sensitive information from insider threats [6] Group 2: Market Context and Demand - With 85% of work occurring in browsers, there is a significant risk of data exposure, as 44% of security incidents are linked to browser activities [2][3] - The shift towards remote, cloud-based work necessitates a unified security approach, making secure browsers essential for modern work environments [4][5] Group 3: Strategic Partnerships and Future Plans - Palo Alto Networks collaborates with Oracle Cloud Infrastructure to enhance operational resiliency and user experience globally [7] - The new SASE features are expected to be generally available in Q4 FY25, indicating a strategic timeline for market introduction [8]