Cybersecurity: Palo Alto Q4 Beats Estimates, Eyes $25B Growth 2025

Prime Highlights:

Palo Alto Networks beat revenue and earnings expectations in Q4, reinforcing investor confidence ahead of its USD 25 billion acquisition of CyberArk.
Platform adoption continues to drive growth, with large multi-product deals and mega deals showing substantial increases.

Key Facts:

Q4 revenue reached USD 2.54 billion, up 16% year-over-year; adjusted EPS came in at USD 0.95, surpassing analyst estimates.
Product revenue grew 19%, led by software firewalls, while subscription and support revenues rose 17% and 11%, respectively.

Key Background:

Palo Alto Networks (PANW) delivered strong fiscal fourth-quarter results, surpassing earnings expectations and meeting revenue forecasts, while raising its fiscal 2026 guidance, sending shares sharply higher.

The cybersecurity firm reported after Monday’s market close that adjusted fiscal Q4 profit rose from 27% to 95% per share, beating analysts’ expectations of 89%. Revenue went up 16% to $2.54 billion, just as analysts expected.

Analysts attributed the strong performance to Palo Alto’s platform-focused strategy. William Blair analyst Jonathan Ho noted that the company’s approach of prioritizing enhanced security over lower cost drove multiple eight-figure deals, as customers increasingly embraced the platform strategy. He added that while hardware-based firewall sales met expectations, the firm is seeing a shift toward software-based firewall solutions.

Chief Executive Nikesh Arora’s cloud platform initiative continues to drive growth, with annual recurring revenue (ARR) from subscription-based cloud products rising 32% to $5.6 billion, exceeding estimates of $5.551 billion. Deutsche Bank’s Brad Zelnick highlighted that broad-based strength was fueled by large strategic customer commitments, including a record 150 new platformizations in the quarter.

For fiscal 2026, Palo Alto projected revenue between $10.47 billion and $10.52 billion, above consensus estimates of $10.423 billion. The company expects subscription ARR to surpass $7 billion and remaining performance obligations (RPO) to reach $18.65 billion, both higher than analysts’ forecasts.

Palo Alto’s stock jumped more than 6% to $187.39 in early trading, recovering from a 3% decline earlier in the year. The rally comes despite investor concerns following the company’s $25 billion acquisition announcement of identity-security firm CyberArk. Analysts said the strong Q4 performance and guidance indicate the deal is being pursued from a position of strength. Palo Alto is now focusing less on billings guidance and more on RPO, which shows the total value of contracts that haven’t been counted as revenue yet.

Expanding beyond its firewall appliance roots, Palo Alto now offers a broad cloud-based security platform covering security operations, endpoint protection, and Secure Access Service Edge (SASE), with CyberArk expected to enhance its identity security offerings when the deal closes in 2026.