Palo Alto Networks (PANW) Company Report

CEO Nikesh Arora announced two major acquisitions—CyberArk for identity and Chronosphere for cloud observability—to expand TAM and raise the 2030 NGS ARR target from $15 billion to $20 billion, with roughly 33% of incremental ARR attributed to Chronosphere and 67% to CyberArk.
The CyberArk deal is expected to drive margin convergence from ~20% to 30%+ operating margins within 24 months and leverage Palo Alto’s scale and go-to-market capabilities ; Chronosphere offers 70%+ gross margins at $0.40 on the dollar versus competitors, targeting a cloud observability TAM of $50–100 billion amid AI-driven infrastructure growth.
The core SaaS security business generated $1–1.3 billion in revenue, grew 34%, and now serves over 6,000 customers, ranking #2 in the category with faster deployments by converting existing VPN clients to Prisma Access.
Software firewall ARR gained to ~50% market share in multi-cloud environments, supported by the AI-focused Prisma AIRS firewall (model scanning, posture management, red teaming) deployed by ~50 customers.
Arora forecasted $1–2 trillion in incremental AI-related infrastructure spending over the next 3–5 years, expanding the cybersecurity attack surface and driving demand for “AI-speed” security solutions.

2 days ago

Transcript

Palo Alto Networks raises 2030 ARR target and details CyberArk, Chronosphere acquisitions

PANW

M&A

Guidance Update

New Projects/Investments

Nikesh Arora outlined two major acquisitions to expand TAM in identity and observability: the planned purchase of CyberArk at a 20%+ premium for identity security , and the acquisition of Chronosphere targeting a $50–70 billion observability TAM with 70%+ gross margins.
The company raised its fiscal 2030 NGSA ARR target from $15 billion to $20 billion, attributing roughly one-third of the uplift to Chronosphere and two-thirds to CyberArk.
Arora highlighted the expected $1 trillion annual AI-driven infrastructure spend, estimating observability could represent 10–15% of this, driving demand for expanded security and observability solutions.
Integration plans include empowering Chronosphere’s leadership with additional resources to maintain momentum, and restructuring CyberArk to leverage Palo Alto’s scale with a goal of margin convergence to 30%+ within 24 months.

2 days ago

Transcript

Palo Alto Networks acquires Chronosphere and CyberArk, targets $15–20 B ARR by FY2030

PANW

M&A

Product Launch

Guidance Update

Announced the acquisitions of identity leader CyberArk and observability startup Chronosphere to add a $40–100 B TAM in identity and cloud observability, targeting ~70%+ gross margins and leveraging existing customer relationships.
Set a long-term fiscal 2030 Next-Gen Security ARR goal of $15 B–$20 B, with roughly 1/3 from Chronosphere and 2/3 from CyberArk contributions.
Core SaaS business (Prisma) now serves over 6,000 customers, ranking #2 in the market with 34% revenue growth; Software Firewall ARR is growing 20%+, achieving ~50% share in cloud software firewalls.
Launched AI-driven security products, including Prisma AIRS (AI firewall) with model scanning, posture management, and secure AI browser controls to defend against prompt injection and data poisoning.
Highlighted a macro AI spending boom—enterprise attack surfaces and speeds are expanding—driving increased infrastructure and AI-speed cybersecurity demand.

2 days ago

Transcript

Palo Alto Networks beats fiscal Q1 2026 estimates, plans $3.35B Chronosphere acquisition

PANW

Earnings

M&A

Palo Alto Networks beat Q1 fiscal 2026 estimates with adjusted EPS of $0.93 and revenue of $2.47 billion, up 16% year-over-year.
Net income declined to $334 million from $351 million due to heavy AI investments, while remaining performance obligations rose 24% to $15.5 billion.
The company will acquire Chronosphere for $3.35 billion to enhance AI observability, integrating the platform into AgentiX for real-time, gigawatt-scale monitoring.

Nov 20, 2025, 2:10 AM

Bloomberg

Palo Alto Networks reports Q1 2026 results

PANW

Earnings

Guidance Update

M&A

In Q1 FY2026, NGS ARR grew 29%, RPO increased 24%, and total revenue rose 16% year-over-year.
SASE ARR climbed 34% to over $1.3 billion with ~6,800 customers, while software firewall revenues grew 23%, serving 12,500+ customers.
Delivered 30.2% operating margin and 76.9% total gross margin, with non-GAAP EPS of $0.93 and $1.7 billion of adjusted free cash flow; cash >$10 billion.
Q2 FY2026 guidance: expects NGS ARR of $6.11–$6.14 billion (↑28% year-over-year).
M&A on track: CyberArk deal expected to close in Q3 and FY2030 ARR target raised from $15 billion to $20 billion.

Nov 19, 2025, 9:30 PM

Transcript

Palo Alto Networks reports strong Q1 2026 results

PANW

Earnings

M&A

Guidance Update

In Q1 FY2026, total revenue was $2.47 billion, up 16% year-over-year; product revenue grew 23%, services revenue rose 14%, operating margin reached 30.2%, and diluted non-GAAP EPS was $0.93
Platformization drove growth with RPO up 24% and NGS ARR up 29%; SASE ARR increased 34% to $1.3 billion, and notable wins included a $33 million federal SASE deal and a $100 million XIM telecom contract
The company announced pending close of the CyberArk acquisition in fiscal Q3 and completed the Kronosphere acquisition to expand AI observability and security operations capabilities
For Q2 FY2026, management guides revenue of $2.57–$2.59 billion and EPS of $0.93–$0.95; full-year FY2026 revenue is forecast at $10.50–$10.54 billion with EPS of $3.80–$3.90, and a >40% adjusted free cash flow margin by FY2028

Nov 19, 2025, 9:30 PM

Transcript

Palo Alto Networks reports Q1 2026 results

PANW

Earnings

M&A

Guidance Update

Total revenue of $2.47 billion (+16%), NGS ARR of $5.85 billion (+29%) and RPO of $15.5 billion (+24%) signal robust subscription and product growth.
Operating margin expanded to 30.2%, non-GAAP EPS reached $0.93, and free cash flow was $1.7 billion (+17%).
Announced a $3.35 billion Kronosphere acquisition and confirmed CyberArk integration remains on track for a fiscal Q3 close.
Q2 2026 revenue guidance set at $2.57–$2.59 billion (+14–15%) and full-year revenue at $10.50–$10.54 billion (+14%).

Nov 19, 2025, 9:30 PM

Transcript

Palo Alto Networks reports Q1 FY2026 results

PANW

Earnings

M&A

Palo Alto delivered Q1’26 revenue of $2.47 B (+16% y/y), Next-Gen Security (NGS) ARR of $5.85 B (+29% y/y), and Remaining Performance Obligation of $15.5 B (+24% y/y).
Achieved 30.2% non-GAAP operating margin (+140 bps y/y), $0.93 non-GAAP EPS (+19% y/y), and $1.71 B adjusted free cash flow with a 69.2% margin.
Landmark platform wins included a $100 M XSIAM deal with a large US telco, $33 M SASE replacement win with a US Cabinet agency, and $29 M NetSec ELA with a European defense firm.
CyberArk acquisition approved by shareholders, anticipated to close in Q3 FY’26, with a >40% FY’28 adjusted FCF margin target reaffirmed.

Nov 19, 2025, 9:30 PM

Presentation

Palo Alto Networks reports Q1 FY2026 results

PANW

Earnings

Guidance Update

M&A

Fiscal Q1 revenue grew 16% year-over-year to $2.5 billion.
Next-Generation Security ARR rose 29% to $5.9 billion, and Remaining Performance Obligation increased 24% to $15.5 billion.
GAAP net income was $334 million (EPS $0.47), while non-GAAP net income reached $662 million (EPS $0.93).
Fiscal Q2 guidance: total revenue of $2.57–2.59 billion, Next-Gen Security ARR of $6.11–6.14 billion, RPO of $15.75–15.85 billion, and non-GAAP EPS of $0.93–0.95.
Announced intent to acquire observability platform Chronosphere.

Nov 19, 2025, 9:16 PM

8-K

Palo Alto Networks acquires Chronosphere observability leader

PANW

M&A

Palo Alto Networks to acquire Chronosphere for $3.35 billion in cash and replacement equity awards, subject to adjustments.
Chronosphere generated over $160 million ARR as of September 2025, with triple-digit year-over-year growth.
Transaction expected to close in Palo Alto Networks’ second half of fiscal 2026, pending customary regulatory approvals.
The combined solution will integrate Chronosphere’s scalable observability with Cortex AgentiX to deliver real-time, agentic remediation for AI-native workloads.

Nov 19, 2025, 9:12 PM

Press Release

Earnings Transcripts

Quarterly earnings call transcripts for Palo Alto Networks.

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