Live: Will Palo Alto Networks (Nasdaq: PANW) Blow Out Earnings Today?
Live Updates Live Coverage Has Ended Best Bookings in 2.5 Years 4:56 pm “In Q4, our bookings growth turned a corner and was the highest we’ve seen in 2.5 years. This growth is driven by deals across our platforms and also as a result of strong renewals and upsells across our existing portfolio.” – Palo Alto CEO Nikesh Arora Palo Alto's CEO On How AI Is Transforming Cybersecurity 4:54 pm Yes, our focus has already shifted to leveraging the scale to define the next decade of cybersecurity. The very fabric of technology is being reowned by AI, creating a vast new and complex attack surface. In this new era, security is no longer a bolt-on. It is a foundational enabler of transformational success. The record-breaking number of platformization deals this quarter demonstrates that customers are not just buying products, they are buying into a strategic partnership. We believe that integrated best-of-breed platforms deliver superior security outcomes and our customers are validating this conviction by making larger, more strategic commitment to us than ever before. Palo Alto's Earnings Call Is Going 4:34 pm If you want to keep following Palo Alto’s earnings – stay on this page. The company just started their conference call and we will post highlights of it. Gains Moderating Slightly 4:24 pm Palo Alto was briefly up 7% after hours, but its gains have moderated slightly. The stock is now up about 5%. Fabrinet was the other ‘big’ tech earnings report tonight and its down 2% after reporting pretty outstanding earnings with guidance well above Wall Street expectations. With many stocks having seen significant runs in recent months, its tough to please Wall Street with even impressive reports. Detailed Earnings Summary 4:14 pm PANW | Palo Alto Networks Q4’25 Earnings Highlights: Adj. EPS: $0.95 []; UP +27% YoY Revenue: $2.5B []; UP +16% YoY Adj. Gross Margin: 73.2% []; UP +90 bps YoY Net Income: $0.254B []; DOWN -29% YoY Next-Generation Security ARR: $5.6B; UP +32% YoY Remaining Performance Obligation: $15.8B; UP +24% YoY Q4’25 Outlook: Revenue: $2.45B to $2.47B [] Represents year-over-year growth of 15%. Guidance reflects strong demand for Next-Generation Security offerings. Q4 Segment Performance: Product Revenue: $0.574B []; UP +19.5% YoY Subscription and Support Revenue: $1.962B []; UP +15% YoY Other Key Q4 Metrics: Adj. Operating Income: $0.497B []; UP +108% YoY Adj. Operating Expenses: $1.360B []; UP +2% YoY R&D Expenses: $0.504B []; UP +2% YoY Free Cash Flow: $0.673B; UP +29% YoY Effective Tax Rate: 57.1% (vs. -12.1% YoY) CEO Commentary: Nikesh Arora: “Our strong execution in Q4 reflects a fundamental market shift in which customers understand that a fragmented defense is no defense at all against modern threats. They are partnering with us because our platforms are designed to work in concert, creating powerful operational synergies that deliver superior, near real-time outcomes and the efficiency our customers need.” CFO Commentary: Dipak Golechha: “Our strong top-line results were complemented by continued operating efficiency and strong free cash flow generation, making us a ‘Rule-of-50’ company for the fifth consecutive year. We are excited to carry this momentum into fiscal year 2026, where we will continue to execute against our profitable growth framework.” Fiscal 2026 Revenue Guidance 4:11 pm Wall Street was expecting Palo Alto to announce revenue of $10.427 billion next Fiscal year. Here’s what the company guided to: Total revenue in the range of $10.475 billion to $10.525 billion, representing year-over-year growth of 14%. At the midpoint, that’s $10.5 billion in revenue in Fiscal 2026. That’s another beat. These are very strong earnings. Palo Alto shares are now up 7%. Q1 Guidance Beats 4:09 pm We just posted a couple updates ago if Q1 guidance is in the $2.47 billion range that would be well received and Q1 guidance calls for revenue between $2.45 billion and $2.47 billion. That’s above Wall Street expectations. Guidance 4:07 pm Next-Generation Security ARR of $7.00 billion to $7.10 billion, representing year-over-year growth of between 26% and 27%. Remaining performance obligation of $18.6 billion to $18.7 billion, representing year-over-year growth of between 17% and 18%. Total revenue in the range of $10.475 billion to $10.525 billion, representing year-over-year growth of 14%. Non-GAAP operating margin in the range of 29.2% to 29.7%. Diluted non-GAAP net income per share in the range of $3.75 to $3.85, using 710 million to 716 million shares outstanding. Adjusted free cash flow margin in the range of 38.0% to 39.0%. <– That’s Palo Alto’s Fiscal 2026 guidance. We’ll analyze it in a moment. Shares continue trading up. Stock is Straight Up 4:06 pm We said the initial numbers look good and Wall Street agrees, first post-release trades are up 3.35% after-hours. Earnings Are Out - Stay on this Page and Rapid Updates Will Follow 4:04 pm Earnings are out EPS of $.95 beats expectations of $.89 Revenue of $2.536 billion also beats Initial numbers look good. Watch for Guidance 3:57 pm Wall Street will be watching closely if Palo Alto beat earnings last quarter, but they’ll also see if the company’s guidance exceeds current expectations. Here’s what Wall Street currently expects in Fiscal Q1 2026: Revenue: $2.43 billion EPS (Adjusted): $.85 So if you see Palo Alto report and are disappointed to see revenue guided down next quarter, fear not. If the company were to issue guidance that was something like $2.47 billion in revenue next qaurter at its midpoint, that would likely lead to a positive reaction in the company’s share price as it would handily top expectations. Palo Alto’s earnings are just minutes away and we’ll be issuing updates right after they hit newswires. Here's Exactly What Palo Alto Forecast For This Quarter 3:23 pm Here’s what Palo Alto forecast for this quarter when they last issued earnings: Next-Generation Security ARR of $5.52 billion to $5.57 billion, representing year-over-year growth of between 31% and 32%. Remaining performance obligation of $15.2 billion to $15.3 billion, representing year-over-year growth of between 19% and 20%. Total revenue in the range of $2.49 billion to $2.51 billion, representing year-over-year growth of between 14% and 15%. Diluted non-GAAP net income per share in the range of $0.87 to $0.89, using 704 million to 707 million shares outstanding. Wall Street currently expects revenue of $2.502 billion (almost exactly at the midpoint of Palo Alto’s guidance) and EPS of $.89 (at the top end of Palo Alto’s guidance). Fortinet (Nasdaq: FTNT) reported earnings on August 6th and saw its stock crash the next day. That’s not a great omen if you’re an investor in the security space, yet Palo Alto Networks (Nasdaq: PANW) will report tonight and we’ll see if the market is more welcoming to its earnings. Overall, Palo Alto is down about 2% year-to-date, which trails the Nasdaq’s 12% gains. Performance has been a mixed bag among security stocks with Crowdstrike (Nasdaq: CRWD) up 23% year-to-date, SentinelOne (NYSE: S) down 24%, and Fortinet down 15% following its post-earnings wipeout. Investors will have plenty to focus on with Palo Alto’s report. Let’s look at the key figures Wall Street expects. What Wall Street Expects from Palo Alto Fiscal Q4 Earnings Here’s the consensus for Palo Alto’s earnings tonight: Revenue: $2.5 billion EPS (Normalized): $.89 EPS (GAAP): $.46 Free Cash Flow: $922.8 million Looking back to last year’s Q4, the company recorded $2.189 billion in sales and normalized EPS of $.76. That means Wall Street expects revenue to grow by about 14% and EPS to grow by 17%. Overall, investors expect Palo Alto to book $3.44 in adjusted profits in calendar 2025. That means the stock is trading for about 51X this year’s adjusted earnings. Growth is the key question facing the company. Wall Street expects a normalized EPS of $3.85 in calendar 2026 (which begins in the current quarter), which is only 12% growth from 2025. However, Wall Street’s EPS projections then bend sharply north with $4.31 in 2027, $6.26 in 2027, and $8.61 in 2029. Yet, if growth looks like it’s stalling in the near-term, that could cause a sharp sell-off with Palo Alto trading at a steep valuation relative to its growth rate. On the bullish side, a beat and raise tonight with a higher-than-expected growth forecast next quarter could send a signal that the company is seeing a significant acceleration in its business thanks to next-generation security products. 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