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Earnings analysis · 10-K

PANW earnings analysis

Filed September 10, 2026 · Our reading of the company's report

The latest report

Palo Alto Networks delivered strong fiscal 2026 growth, with revenue up 24% to $11.480 billion, NGS ARR of $9.1 billion and free cash flow of $4.113 billion. The platformization strategy and acquisitions of CyberArk and…

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Palo Alto Networks delivered strong fiscal 2026 growth, with revenue up 24% to $11.480 billion, NGS ARR of $9.1 billion and free cash flow of $4.113 billion. The platformization strategy and acquisitions of CyberArk and Chronosphere significantly broadened the product roadmap into identity security and observability, but also drove a sharp decline in margins and EPS, alongside substantial goodwill, intangible assets and integration obligations. The outlook is strategically constructive but financially mixed, leaving sentiment neutral pending evidence that the enlarged portfolio can restore operating leverage.

Read the original on SEC.gov

From revenue to operating profit

Where each $100 of revenue went in this report.

Of every $100 of revenue Cost of sales $30 Operating expenses $64 Left as operating profit $6

Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.

Where revenue came from

The business segments reported by the company.

Subscription and support revenue 40.1% Americas revenue 33.4% EMEA revenue 10.6% Product revenue 9.9% APAC revenue 6.0%

Shares of the segments disclosed in this filing, largest first.

Reported figures

Earnings per share
$0.4

What stood out

  • Revenue growth accelerated

    Revenue increased from $8.027 billion in fiscal 2024 to $9.221 billion in fiscal 2025 and $11.480 billion in fiscal 2026, with fiscal 2026 growth of 24% according to the MD&A.

  • Recurring revenue base expanded

    Recurring subscription and support revenue reached $9.200 billion, or 80.1% of total revenue, while NGS ARR increased to $9.1 billion and remaining performance obligations reached $21.2 billion as of July 31, 2026.

  • Cash generation strengthened

    Free cash flow rose from $3.101 billion in fiscal 2024 to $3.469 billion in fiscal 2025 and $4.113 billion in fiscal 2026; operating cash flow reached $4.553 billion in fiscal 2026.

  • Broader cybersecurity platform roadmap

    The company is pursuing platformization across Network & AI Security, Cortex and the newly formed Idira identity-security platform, and launched or upgraded PAN-OS 12.1 Orion, Prisma AIRS 2.0 and 3.0, and Prisma AIRS Gateway during fiscal 2026.

  • Growth was broad geographically

    All geographic theaters grew: Americas revenue increased 24% to $7.679 billion, EMEA increased 27% to $2.428 billion, and APAC increased 25% to $1.373 billion.

  • Strategic acquisitions broadened TAM

    CyberArk added identity security, Chronosphere added observability, and Koi and Portkey expanded agentic endpoint and AI-gateway capabilities; the company reported $930 million of post-acquisition revenue from Chronosphere and CyberArk.

What to watch

  • CyberArk integration and valuation risk

    The CyberArk acquisition materially increased integration and financial complexity: total consideration was $21.1 billion, including $18.488 billion of stock, and the company recorded $14.800 billion of related goodwill and $6.279 billion of identified intangible assets. Chronosphere and CyberArk together generated a $797 million operating loss in the post-acquisition period.

  • Margins and EPS compressed

    Profitability deteriorated materially as acquisition amortization, cloud costs, headcount and other expenses increased: gross margin declined from 74.3% in fiscal 2024 and 73.4% in fiscal 2025 to 70.4% in fiscal 2026, while operating margin fell from 13.5% to 6.1% year over year and diluted EPS declined from $1.60 to $0.40.

  • Component costs and fixed commitments

    Supply-chain pressure became a material margin risk in fiscal 2026: the filing states that fourth-quarter disruption and inflation increased memory and other component costs and negatively affected gross margin. The company also had $8.242 billion of non-cancelable purchase commitments, including $7.686 billion for cloud services, as of July 31, 2026.

Management's outlook

The 10-K does not provide explicit annual or quarterly numeric guidance; outlook was provided in the fiscal Q4 earnings press release and call.

Earlier filings 1

10-Q · June 2, 2026

Palo Alto Networks exceeded revenue and EPS estimates in Q3 FY2026, reporting $3.0 billion in revenue and EPS of $0.85. This was a strong year-over-year growth of 31%, highlighting robust demand for their cybersecurity…

This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.