Palo Alto Networks acquires Koi, adds AI agent endpoint security, reports Q2

Palo Alto Networks said it will acquire Koi in a move that will add endpoint security to AI agents. 

The move, announced ahead of Palo Alto Networks' second quarter earnings report, will add agentic AI security to the company's security platform. 

Koi specializes in securing AI agents and the tools they connect to. Palo Alto Networks said agent frameworks are expanding the attack surface with techniques including authentication bypass, API-based remote code execution and spoofing agents. 

Palo Alto Networks' plan is to expand Koi Agentic Endpoint Security to its Prisma AIRS platform. The integration will also extend to Cortex XDR. 

In a statement, Palo Alto Networks Chief Product and Technology Officer Lee Klarich said, "AI agents and tools are the ultimate insiders" and that the Koi acquisition will close that gap and improve endpoint security and visibility. Koi's platform covers agents, plugins and scripts. 

The Koi acquisition was announced a week after Palo Alto Networks closed its CyberArk purchase.

Palo Alto Networks also rolled out Unit 42 Managed XSIAM 2.0, its managed security operations center service.

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Palo Alto's second quarter and outlook

Palo Alto reported better-than-expected second quarter earnings, but its third quarter earnings outlook was lighter than expected. 

The cybersecurity vendor reported second quarter earnings of $432 million, or 61 cents a share, on revenue of $2.6 billion, up 15% from a year ago. Non-GAAP earnings for the quarter were $1.03 a share, 9 cents a share better than estimates. 

CEO Nikesh Arora said the company "saw continued strength in platformizations, a trend that is accelerating due to AI." He added that Palo Alto Networks saw steady adoption of its AI security, which is now strengthened by the acquisition of Koi. 

As for the outlook, Palo Alto networks projected third quarter revenue between $2.941 billion and $2.945 billion, up 28% and 29% due to the acquisitions of Chronosphere and CyberArk. Non-GAAP earnings for the third quarter are expected to be 78 cents a share to 80 cents a share. 

Wall Street was looking for third quarter non-GAAP earnings of 92 cents a share on revenue of $2.6 billion, but the sales comparison likely didn't account for two new acquisitions. 

For fiscal 2026, Palo Alto Networks projected non-GAAP earnings of $3.65 a share to $3.70 a share on revenue of $11.28 billion to $11.31 billion, up 22% to 23%. 

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