Palo Alto Networks delivers strong Q4, sets outlook

Palo Alto reported a strong fourth quarter and 34% revenue growth powered by its next-generation security products. Separately, Palo Alto Networks said it will acquire Console, an agentic AI cybersecurity company.

The company reported a fourth quarter net loss of $282 million, or 35 cents a share, on revenue of $3.41 billion, up 34% from a year ago. Non-GAAP earnings were $1.02 cents a share.

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Wall Street was expecting non-GAAP earnings of 98 cents a share on revenue of $3.35 billion.

CEO Nikesh Arora said, "the latest advancements in AI are elevating cybersecurity to the top of the CIO priority list." Arora also said the integrations of CyberArk and Chronosphere are working well.

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On a conference call Arora said:

• "Q4 was the very first quarter in which we witnessed the profound implications of cyber-capable models. As I've said before, AI is a long-term tailwind for cybersecurity. While these models are becoming increasingly proficient at uncovering vulnerabilities, detection is merely the opening act. Truly validating, interpreting context and resolving these issues requires broad cybersecurity platforms working alongside frontier AI. This synergy is essential to stress test environments, manage agentic actions and trigger machine-speed remediation during an active threat."
• "In an AI-driven threat environment, there is no longer anywhere to hide. For our customers, the Mythos Moment reframes the security challenge from visibility to velocity. Organizations must now identify exposures before they are weaponized and respond at machine speed."
• "While frontier models will continue to set the high watermark for intelligence, the broader market is heading towards a rapid fragmentation and proliferation. Crucially, each new deployment adds more infrastructure to fortify and more sensitive data to protect. The surface area requiring platformized protection is expanding dramatically."

By the numbers:

• Next-generation security annual recurring revenue in the fourth quarter was $9.1 billion, up 63% from a year ago.
• Remaining performance obligations in the second quarter were $21.2 billion.
• Subscription revenue in the fourth quarter was $2.67 billion and product revenue was $738 million.
• For fiscal 2026, Palo Alto Networks reported revenue of $11.48 billion and net income of $307 million.

As for the outlook, Palo Alto Networks projected revenue between $3.3 billion and $3.31 billion with non-GAAP earnings of 96 cents a share to 98 cents a share. For fiscal 2027, Palo Alto Networks projected revenue between $14.1 billion and $14.2 billion with non-GAAP earnings of $4.16 a share to $4.19 a share.

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