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Palo Alto Networks Tops Quarterly Views; Shares Climb After Hours

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Palo Alto Networks Tops Quarterly Views; Shares Climb After Hours

Palo Alto Networks (PANW) late Tuesday reported stronger-than-expected fiscal third-quarter results as an artificial intelligence boom drove demand for cybersecurity.

Adjusted per-share earnings rose to $0.85 for the three months through April 30 from $0.80 a year earlier, beating the consensus on FactSet of $0.79. Revenue grew 31% to $3 billion, above analysts' $2.94 billion estimate.

"(Third quarter) was a standout quarter for Palo Alto Networks, with accelerating organic bookings growth as customers turn to us to secure their AI deployments at scale," Chief Executive Nikesh Arora said in a statement. "The latest advancements at the AI frontier have increased the level of urgency around cybersecurity, and redefined the shape of the industry for the coming years."

Subscription and support revenue advanced to $2.41 billion from $1.84 billion in the year-ago period, while product sales increased to $594 million from $453 million.

The cybersecurity firm's stock climbed 11% in after-hours trading, and has gained 61% this year through Tuesday close.

Morgan Stanley expected solid results at Palo Alto amid favorable partner commentary and demand momentum.

Palo Alto raised its fiscal 2026 adjusted EPS guidance to between $3.77 and $3.79 from $3.65 to $3.70 previously projected. The consensus estimate indicates $3.68. Revenue is pegged at $11.415 billion to $11.425 billion, compared with the prior outlook that called for $11.28 billion to $11.31 billion. Wall Street is modeling for $11.3 billion.

For the fourth quarter, the company anticipates reporting adjusted EPS of $0.96 to $0.98 on revenue of $3.345 billion to $3.355 billion. The Street is looking for $0.94 and $3.28 billion, respectively.

Palo Alto Networks has closed several acquisitions this year, including those of observability platform Chronosphere and CyberArk.

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