Palo Alto Networks pops as results, guidance top estimates; founder steps down

[Palo Alto Networks headquarters in Silicon Valley]
Sundry Photography

Palo Alto Networks (NASDAQ:PANW [https://seekingalpha.com/symbol/PANW]) shares rose 6% in extended trading on Monday after the cybersecurity company posted fiscal fourth-quarter results and guidance that topped expectations.

For the period ending July 31, the Nikesh Arora-led firm earned an adjusted $0.95 per share on $2.5B in revenue, up 16% year-over-year. Product revenue rose 19% year-over-year to come in at $573.9M, while subscription and support revenue rose 15% year-over-year to $1.96B. Next-generation security annual recurring revenue came in at $5.6B, above the $5.55B estimate.

The company ended the period with $6.3B in deferred revenue and $15.8B in remaining performance obligations.

A consensus of analysts expected the company to earn $0.89 per share on $2.5B in revenue.

“Our strong execution in Q4 reflects a fundamental market shift in which customers understand that a fragmented defense is no defense at all against modern threats. They are partnering with us because our platforms are designed to work in concert, creating powerful operational synergies that deliver superior, near real-time outcomes and the efficiency our customers need,” said Arora in a statement [https://seekingalpha.com/pr/20204210-palo-alto-networks-reports-fiscal-fourth-quarter-and-fiscal-year-2025-financial-results]. “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.”

CrowdStrike (CRWD [https://seekingalpha.com/symbol/CRWD]), Zscaler (ZS [https://seekingalpha.com/symbol/ZS]), Check Point (CHKP [https://seekingalpha.com/symbol/CHKP]) and several other cybersecurity stocks fell following the results.

Looking to the first-quarter of fiscal 2026, Palo Alto expects to earn between $0.88 and $0.90 on an adjusted basis, above the $0.86 per share estimate. Revenue is forecast to be between $2.45B and $2.47B, with the midpoint above the $2.45B estimate. Next-gen security ARR is forecast to be between $7B and $7.1B, with the midpoint well above the $5.84B estimate, while its remaining performance obligations are forecast to be between $15.4B and $15.5B.

For the full-year, Palo Alto expects to earn between $3.75 and $3.85 per share on an adjusted basis, with the $3.80 midpoint above the $3.69 per share estimate. Sales are forecast to be between $10.48B and $10.53B, above the $10.44B estimate. Its remaining performance obligations are expected to be between $18.6B and $18.7B, above the $18.12B estimate.

In addition to the quarterly results, Palo Alto said [https://seekingalpha.com/pr/20204199-palo-alto-networks-announces-retirement-of-nir-zuk-founder-and-cto] its founder and Chief Technology Officer, Nir Zuk, would be retiring. Zuk, who is also a member of Palo Alto's board of directors, will be replaced by the company's Chief Product Officer, Lee Klarich, in both roles.

The company will host a conference call at 4:30 p.m. EST to discuss the results.

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