Summary
Palo Alto Networks, Inc. reported solid revenue growth for the third quarter of fiscal year 2026, with total revenue reaching $3.0 billion, a 31% increase year-over-year. This growth was driven by strong performance across both product and subscription and support segments, with subscription and support revenue now constituting 80.2% of total revenue. The company's strategic focus on platformization, evident in its network security, security operations, observability, and identity security platforms, continues to resonate with customers, as indicated by the substantial remaining performance obligations of $18.4 billion. Despite the robust revenue growth, the company reported a net loss of $177 million for the quarter, a shift from the net income of $262 million in the prior year's comparable period. This loss is largely attributable to significant investments and expenses related to recent large-scale acquisitions, notably CyberArk Software Ltd., which was completed in February 2026. The company's balance sheet reflects a substantial increase in goodwill and intangible assets due to these acquisitions. While operating expenses, particularly in sales and marketing and R&D, have increased, the company generated positive operating cash flow of $3.2 billion for the nine months ended April 30, 2026, indicating underlying operational strength.
Financial Highlights
48 data points| Revenue | $3.00B |
| Cost of Revenue | $974.00M |
| Gross Profit | $2.03B |
| R&D Expenses | $734.00M |
| Operating Expenses | $2.21B |
| Operating Income | -$183.00M |
| Net Income | -$177.00M |
| EPS (Basic) | $-0.22 |
| EPS (Diluted) | $-0.22 |
| Shares Outstanding (Basic) | 801.00M |
| Shares Outstanding (Diluted) | 801.00M |
Key Highlights
- 1Total revenue for Q3 FY2026 was $3.0 billion, a 31% increase year-over-year.
- 2Subscription and support revenue grew 31% year-over-year to $2.4 billion, now representing 80.2% of total revenue.
- 3Remaining performance obligations stood at $18.4 billion as of April 30, 2026, indicating strong future revenue visibility.
- 4The company reported a net loss of $177 million for the quarter, compared to a net income of $262 million in the prior year, largely due to acquisition-related expenses.
- 5Goodwill and intangible assets significantly increased due to the CyberArk acquisition, totaling $21.9 billion and $7.3 billion respectively at the end of the quarter.
- 6Operating expenses increased by 52% year-over-year, driven by higher R&D, sales & marketing, and general & administrative costs, partly due to recent acquisitions.
- 7Net cash provided by operating activities was $3.2 billion for the nine months ended April 30, 2026.