Palo Alto Networks Reports Higher Quarterly Profit as Security Revenue Grows

Palo Alto Networks (NASDAQ:PANW) reported higher fiscal fourth-quarter revenue and adjusted profit on Tuesday, alongside growth in its next-generation security business as companies increased spending on cybersecurity for AI-related operations.

Fiscal fourth-quarter revenue increased 34% year over year to $3.41 billion. Adjusted profit rose to $853 million, or $1.02 per diluted share, from $673 million, or $0.95 per share, in the corresponding period a year earlier.

For the full fiscal year, revenue increased to $11.48 billion from $9.22 billion. Adjusted profit reached $2.93 billion, or $3.84 per diluted share, compared with $2.35 billion, or $3.34 per share, in the previous year.

Palo Alto Networks shares were down 1.7% in Wednesday premarket trading as of 04:18 ET.

Next-Generation Security ARR Reaches $9.1 Billion

Palo Alto Networks reported growth across its security platforms, with Chief Executive Nikesh Arora saying developments in artificial intelligence are increasing the priority companies place on cybersecurity within their technology spending.

The company said it added nearly $1 billion in net new next-generation security annual recurring revenue during the quarter.

Next-generation security annual recurring revenue increased 63% year over year to $9.1 billion, while remaining performance obligations rose 34%.

The company reported demand across its Network & AI Security, Cortex and Idira platforms.

Raymond James Maintains Market Perform Rating

Raymond James reiterated its Market Perform rating on Palo Alto Networks following the fiscal fourth-quarter results, which the brokerage described as “generally solid,” although it said next-generation security ARR was modestly below what it believed buy-side investors had expected.

Analyst Adam Tindle said NGS ARR would have needed to reach closer to $9.15 billion to represent “an accelerating beat” and move organic year-over-year growth further into the mid-20%-plus range. He compared the metric with CrowdStrike’s mid-20% total ARR growth and net new ARR growth above 50%.

Instead, “the beat decelerated in a very healthy environment,” Tindle said. “This may sound like picking nits, but this metric is important as it underpins the bull thesis of Palo as decoupling from the traditional firewall comps and looking more like a high-growth next-gen software company,” he added.

The comments represent Raymond James’ assessment of the company’s results and valuation considerations.

Palo Alto Networks Adds Console to AI Portfolio

Palo Alto Networks also said it acquired Console, an AI-native platform designed to support agentic workflows across enterprise operations.

The company expects the acquisition to expand the role of its Cortex platform as businesses deploy AI agents. This represents management’s expectation for the acquisition rather than an established future outcome.

Palo Alto Networks Provides Fiscal 2027 Outlook

Looking ahead, Palo Alto Networks expects revenue to continue growing in fiscal 2027 and forecasts further expansion in its next-generation security business.

Management also reiterated its focus on profitability and cash generation as the company addresses cybersecurity requirements associated with increased adoption of artificial intelligence.

The fiscal 2027 projections represent company guidance and remain subject to future business and market conditions.

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