Summary
Palo Alto Networks, Inc. (PANW) reported solid revenue growth of 16% year-over-year to $2.47 billion for the first quarter of fiscal year 2026, ending October 31, 2025. This growth was driven by a strong performance in both product revenue, which increased by 23%, and subscription and support revenue, which grew by 14%. The company maintained a consistent gross margin of 74.2%. While operating income saw a slight decrease in margin to 12.5% from 13.4% in the prior year, this was largely due to an increase in general and administrative expenses, including legal accrual adjustments and higher share-based compensation. Financially, PANW demonstrated robust cash flow generation, with net cash provided by operating activities increasing to $1.77 billion. The company's liquidity remains strong, with total cash, cash equivalents, and investments reaching $10.2 billion. Notably, the company announced its definitive agreement to acquire CyberArk Software Ltd. for approximately $25 billion, a significant strategic move expected to close in the third quarter of fiscal year 2026, signaling a major expansion and focus on identity security. This acquisition, funded by cash on hand, represents a substantial investment and potential for future growth and synergy.
Financial Highlights
47 data points| Revenue | $2.47B |
| Cost of Revenue | $638.00M |
| Gross Profit | $1.84B |
| R&D Expenses | $528.00M |
| Operating Expenses | $1.53B |
| Operating Income | $309.00M |
| Net Income | $334.00M |
| EPS (Basic) | $0.49 |
| EPS (Diluted) | $0.47 |
| Shares Outstanding (Basic) | 679.00M |
| Shares Outstanding (Diluted) | 709.00M |
Key Highlights
- 1Total revenue increased 16% year-over-year to $2.47 billion for the first quarter of fiscal year 2026.
- 2Product revenue grew 23% year-over-year to $434 million, and subscription and support revenue increased 14% to $2.04 billion.
- 3Gross margin remained strong at 74.2%.
- 4Net income decreased to $334 million from $351 million in the prior year, impacted by increased operating expenses.
- 5Operating cash flow was robust at $1.77 billion, reflecting strong business performance.
- 6Total cash, cash equivalents, and investments stood at $10.2 billion, indicating a healthy liquidity position.
- 7Palo Alto Networks entered into a definitive agreement to acquire CyberArk Software Ltd. for approximately $25 billion, a significant strategic move expected to close in Q3 FY2026.