Palo Alto Networks, Inc. (PANW) Earnings

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Oct 2026upcoming

Next quarter

Expected to report Nov 18, 2026 — estimated from last year’s reporting date.

Consensus is $0.52 EPS for Oct 2026 across 14 estimates, ranging $0.49 to $0.59.

PANW Jul 2026

Reported Sep 1, 2026 · after the close

: 3.92%
: -9.28%

: $0.51
: $0.53
: —
: —

Highlights

Revenue: Fiscal Q4 revenue rose 34% year over year to $3.41 billion, up from $3.00 billion in Q3 FY2026 and $2.54 billion in Q4 FY2025.
Next-generation security: NGS ARR increased 63% year over year to $9.10 billion, with nearly $1 billion of net new NGS ARR added during the quarter.
Profitability: Non-GAAP operating income reached $1.01 billion, up from $768 million a year earlier, while GAAP operating income fell to $172 million from $497 million.
EPS: Supplied analyst data show reported EPS of $0.53 versus consensus of $0.51, a 3.92% beat; the company separately reported non-GAAP diluted EPS of $1.02 and GAAP diluted EPS of negative $0.35.
Cash generation: Adjusted free cash flow increased 35% year over year to $1.29 billion, equal to a 37.8% margin; FY2026 adjusted free cash flow margin was 38.4%.
Contracted backlog: Remaining performance obligations grew 34% year over year to $21.2 billion.
FY2027 outlook: Palo Alto Networks expects revenue of $14.10 billion to $14.20 billion, NGS ARR of $11.075 billion to $11.175 billion, a 29.5% non-GAAP operating margin and a 38.0% adjusted free cash flow margin.
Acquisition: The company acquired Console, an AI-native platform for agentic workflows, to extend Cortex into broader enterprise operations.

Analysis

Palo Alto Networks closed FY2026 with a strong growth quarter. Revenue of $3.41 billion increased 34% year over year from $2.54 billion and 14% sequentially from $3.00 billion in Q3. The supplied analyst data show EPS of $0.53 versus a $0.51 consensus estimate, a 3.92% beat. The company’s release reports non-GAAP diluted EPS of $1.02, up from $0.95 a year earlier, alongside a GAAP diluted loss of $0.35 versus GAAP EPS of $0.36 in Q4 FY2025.

The defining feature was continued acceleration in the subscription-led security platform. NGS ARR rose 63% to $9.10 billion, including nearly $1 billion of net new ARR in the quarter, while remaining performance obligations grew 34% to $21.2 billion. Profitability was strong on the company’s adjusted presentation: non-GAAP operating income rose 32% to $1.01 billion and adjusted free cash flow rose 35% to $1.29 billion. GAAP results were substantially weaker because of $487 million of share-based compensation, $281 million of acquired-intangible amortization, $68 million of acquisition costs and a $524 million change in convertible-note and capped-call fair value. FY2027 guidance calls for 23% to 24% revenue growth and 22% to 23% NGS ARR growth, implying a meaningful deceleration from the FY2026 exit rate but continued margin and cash-flow discipline.

Platform growth

NGS ARR: Next-Generation Security ARR increased 63% year over year to $9.10 billion. Management said the company added nearly $1 billion of net new NGS ARR in Q4, supporting its long-term $20 billion FY2030 NGS ARR target.
Revenue mix: Subscription and support revenue grew to $2.67 billion from $1.96 billion a year earlier, while product revenue rose to $738 million from $574 million. Total revenue increased 34% to $3.41 billion.
Backlog: Remaining performance obligations grew 34% to $21.2 billion, indicating continued support from contracted future revenue despite the company’s shift toward platform subscriptions.

Adjusted profitability

Operating income: Non-GAAP operating income rose 32% year over year to $1.01 billion from $768 million, implying a margin of approximately 29.6% versus 30.3% a year earlier.
EPS: The company reported non-GAAP diluted net income of $853 million, or $1.02 per share, compared with $673 million, or $0.95 per share, in Q4 FY2025. Separately, the supplied market data show reported EPS of $0.53 versus $0.51 expected.
GAAP bridge: GAAP operating income declined to $172 million from $497 million and GAAP net income swung to a $282 million loss from $254 million of profit. The largest adjustments were $487 million of share-based compensation, $281 million of acquired-intangible amortization and a $524 million convertible-note and capped-call fair-value change.

Cash flow conversion

Quarterly cash flow: Net cash from operating activities rose to $1.36 billion from $1.02 billion, while free cash flow increased to $1.25 billion from $934 million.
Adjusted free cash flow: Adjusted free cash flow reached $1.29 billion versus $954 million a year earlier, producing a 37.8% margin compared with 37.6% in Q4 FY2025.
Full-year target: FY2026 adjusted free cash flow was $4.41 billion, equal to a 38.4% margin. Management expects a 38.0% margin in FY2027 and remains confident in reaching a 40% adjusted free cash flow margin in FY2028.

FY2027 outlook

First quarter: Q1 FY2027 revenue is guided to $3.300 billion to $3.310 billion, representing 33% to 34% year-over-year growth. NGS ARR is expected at $9.54 billion to $9.56 billion, up 63%, and non-GAAP EPS at $0.96 to $0.98.
Full year: FY2027 revenue is expected at $14.10 billion to $14.20 billion, or 23% to 24% growth. NGS ARR is guided to $11.075 billion to $11.175 billion, representing 22% to 23% growth, while RPO is expected to rise 19% to 20% to $25.2 billion to $25.4 billion.
Margins: The company expects a 29.5% non-GAAP operating margin and a 38.0% adjusted free cash flow margin for FY2027, broadly maintaining its adjusted profitability framework as growth moderates from the Q4 pace.

AI and acquisitions

Palo Alto Networks acquired Console, an AI-native platform designed to enable agentic workflows across enterprise operations. The company intends to use the transaction to expand Cortex beyond conventional security operations and into the broader enterprise adoption of AI agents. Management framed advances in AI as a durable catalyst for cybersecurity spending and connected the acquisition to the company’s platform strategy across Network & AI Security, Cortex and Idira.

Balance sheet changes

The balance sheet expanded materially during FY2026, reflecting acquisitions including CyberArk. Total assets rose to $48.46 billion from $23.58 billion, with goodwill increasing to $22.01 billion from $4.57 billion and intangible assets to $7.02 billion from $763 million. Cash and cash equivalents were $2.51 billion at July 31, 2026, versus $2.27 billion a year earlier, while long-term convertible senior notes stood at $1.77 billion. Deferred revenue reached $14.76 billion across current and long-term balances, up from $12.75 billion.

Palo Alto Networks, Inc.

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