Palo Alto Networks (NASDAQ: PANW) reported Q4 2025 revenue of $2.54 billion and earnings of $0.95 per share.
Wall Street analysts expected revenue of $2.50 billion and earnings of $0.89 per share.
Palo Alto Networks: Q4 2025 Highlights and Fiscal 2026 Outlook
Palo Alto Networks reported a strong close to fiscal 2025, with Q4 revenue rising 16% year over year to $2.5 billion and full-year revenue reaching $9.2 billion, up 15% from FY24.
Non-GAAP net income for the quarter came in at $673 million, or $0.95 per share, while GAAP net income fell to $253.8 million due to higher operating expenses and acquisition-related adjustments.
Key growth drivers included Next-Generation Security ARR, which surged 32% year over year to $5.6 billion, and Remaining Performance Obligations (RPO), which climbed 24% to $15.8 billion, signaling sustained customer demand.
Chairman and CEO Nikesh Arora said, “We exited fiscal year 2025 with an acceleration in RPO, and surpassed the $10 billion revenue run-rate milestone, positioning ourselves well for sustained growth ahead.”
Looking ahead to FY2026, Palo Alto forecasts revenue between $10.475 billion and $10.525 billion, representing 14% growth, with non-GAAP EPS in the range of $3.75 to $3.85. First-quarter guidance includes revenue of $2.45–$2.47 billion, ARR of $5.82–$5.84 billion, and non-GAAP EPS of $0.88–$0.90.
The company is targeting free cash flow margins of 38–39% and an operating margin of nearly 30%, reflecting confidence in profitable growth despite near-term acquisition-related headwinds.
Palo Alto Networks (PANW) Stock Under Pressure After CyberArk Deal
Palo Alto Networks stock closed at just under $176.17 at the end of Monday’s session, down more than 16% from its 52-week high.
The stock has taken a hit over the last month following the company’s July announcement of its agreement to acquire CyberArk (NASDAQ: CYBR) — a move that has sparked concern among investors about platform overlap, integration risks, and valuation strain amid a competitive cybersecurity landscape.
Despite the pullback, Palo Alto remains one of the largest players in the space and has emphasized AI-driven consolidation as a long-term strategic advantage. It continues to compete with peers such as CrowdStrike (NASDAQ: CRWD), Zscaler (NASDAQ: ZS), and Fortinet (NASDAQ: FTNT), which have taken divergent approaches to identity, endpoint, and cloud security.
Last week, Rosenblatt lowered its price target on the stock to $215 from $235 while maintaining a Buy rating. Cantor Fitzgerald reiterated its Overweight rating and set a price target of $223, signaling continued confidence in the company’s long-term strategy despite near-term volatility.
What to Watch: Q4 2025 Earnings Call
Palo Alto Networks will hold its Q4 FY2025 earnings call at 4:30 PM Eastern / 1:30 PM Pacific.
Analysts will be focused on the company’s $25 billion acquisition of CyberArk, with questions around integration plans, go-to-market overlap, and near-term cost impact.
Investors also want clarity on margins and long-term identity strategy. With the deal expected to dilute EPS by around 13.5%, management will likely face questions on when the acquisition turns accretive, how it fits with Prisma and Cortex, and whether Palo Alto can emerge as a true identity security leader alongside Okta and CrowdStrike.
Analysts will also look for commentary on potential pressures in subscription revenue growth that could weigh on fiscal 2026 guidance and test Palo Alto’s ability to meet expectations.
They’ll be watching for updates on AI-related ARR, adoption of Cortex XSIAM and Prisma AIRS, and any signs that macroeconomic headwinds are impacting renewal rates or Remaining Performance Obligations (RPO) growth.
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