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Palo Alto Networks Inc 8-K Report, Financial Results (Nov 19, 2025)

Reports
Earnings & Results·Regulation FD·Other Events+1
Filing Date
Filed November 19, 2025
Period End
November 19, 2025
Security
PANW
In the record · 2016–202610-K1110-Q328-K110

PANW filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 110 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Jun ’20Jun ’20
  2. Leadership change8-K · Dec ’22Dec ’22
  3. Leadership change8-K · Dec ’24Dec ’24

01—Abstract

Summary

Summary of the 8-K filed November 19, 2025. Cited figures are marked; the original filing is the authoritative source.

Palo Alto Networks (PANW) reported fiscal first quarter 2026 results (quarter ended October 31, 2025) with total revenue up 16% year over year to $2.47 billiona, GAAP net income of $334 million ($0.47 diluted EPS), and non-GAAP net income of $662 million ($0.93 diluted EPS, up from $0.78).

GAAP operating income was $309 millionb, and non-GAAP operating margin reached 30.2%, versus 28.8% a year earlier. Next-Generation Security ARR grew 29% to $5.9 billion and remaining performance obligations grew 24% to $15.5 billion, indicating strong forward visibility into subscription demand. Management raised confidence in a 40%+ adjusted free cash flow margin target for FY2028 and guided FY2026 total revenue to $10.50-$10.54 billion and non-GAAP EPS to $3.80-$3.90.

The filing also discloses an agreement to acquire Chronosphere, a next-generation observability platform, for total consideration of $3.35 billionc in cash and replacement equity awards. Chronosphere reports ARR above $160 million as of September 2025, growing at triple digits, and the deal is expected to close in the second half of fiscal 2026, subject to regulatory approvals. Separately, the board extended its $1 billion share repurchase authorization through December 31, 2026, with about 697 million shares outstanding as of November 11, 2025.

Investors should weigh the strong top-line and margin execution against GAAP profitability, which was lower year over year due to a higher tax provision ($78 milliond versus $17 million) and elevated share-based compensation ($387 million). The Chronosphere deal extends PANW further into observability, a competitive market, and adds integration and execution risk, while the company's pending CyberArk transaction is also noted as a factor in management bandwidth.

02—Key points

Key Highlights

  1. Total revenue rose 16% year over year to $2.47 billion in fiscal Q1 2026, versus guidance-consistent growth driven by subscription and support revenue of $2.04 billion.
  2. Next-Generation Security ARR grew 29% year over year to $5.9 billion; remaining performance obligation grew 24% to $15.5 billion.
  3. GAAP net income fell to $334 million ($0.47 diluted EPS) from $351 million ($0.49), driven by a higher income tax provision of $78 million versus $17 million a year earlier.
  4. Non-GAAP net income rose to $662 million ($0.93 diluted EPS) from $545 million ($0.78); non-GAAP operating margin expanded to 30.2% from 28.8%.
  5. FY2026 guidance: total revenue of $10.50-$10.54 billion (about 14% growth), non-GAAP EPS of $3.80-$3.90, and adjusted free cash flow margin of 38-39%.
  6. Agreed to acquire Chronosphere for $3.35 billion in cash and replacement equity awards; Chronosphere ARR exceeds $160 million and is growing triple digits; closing expected in 2H FY2026 pending regulatory approval.
  7. Board extended the $1 billion share repurchase authorization through December 31, 2026, with discretion to suspend or discontinue at any time.

03—Questions

Frequently Asked Questions

  1. How strong was PANW's fiscal Q1 2026 top-line and recurring revenue growth?

    Total revenue grew 16% year over year to $2.47 billion, and Next-Generation Security ARR grew 29% to $5.9 billion. Remaining performance obligation rose 24% to $15.5 billion, which signals substantial contracted future revenue.

  2. Why did GAAP net income decline even though revenue grew and operating income rose?

    GAAP operating income increased to $309 million from $286 million, but GAAP net income fell to $334 million from $351 million. The main drivers were a much higher income tax provision ($78 million versus $17 million) and a lower GAAP EPS of $0.47 versus $0.49. Share-based compensation-related charges of $387 million also weighed on GAAP results.

  3. What does the Chronosphere acquisition mean for Palo Alto Networks?

    The $3.35 billion deal adds a next-generation observability platform that PANW plans to combine with its Cortex AgentiX platform to offer agentic, automated remediation. Chronosphere's ARR is currently about $160 million and growing triple digits, so the deal is a small addition to overall revenue but a strategic expansion into observability. Closing is expected in the second half of fiscal 2026, subject to regulatory approvals, and the filing flags integration and execution risk.

  4. How much capital is available for share buybacks, and does the extension signal anything?

    The board extended the existing $1 billion repurchase authorization through December 31, 2026. Repurchases are opportunistic, funded from working capital, and can be suspended at any time. The extension gives management flexibility but does not commit the company to a specific repurchase pace.

  5. What are the key forward expectations and risks for investors?

    Management guided Q2 FY2026 revenue to $2.57-$2.59 billion (14-15% growth) and expects a 40%+ adjusted free cash flow margin in FY2028. Key risks include integrating Chronosphere, the pending CyberArk transaction diverting management attention, competition in observability, and the GAAP-to-non-GAAP gap driven by share-based compensation.

04—Continue

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