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ustomers with over $20M NGS ARR grew nearly 80%, while $5M and $10M spenders rose about 50%.
Big wins include $100M , $60M, and $33M platform deals spanning AI, cloud, and network security.
Palo Alto Networks (PANW - Free Report) is witnessing strong momentum with its platformization strategy, which involves getting customers to adopt multiple Palo Alto Networks’ products spanning across network, cloud, and security operations. Through this strategy, Palo Alto Networks is seeing larger customers adopt its full security platform, which is helping the company grow faster and secure bigger deals.
In the fourth quarter of fiscal 2025, customers with more than $20 million in Next Gen Security (NGS) Annual Recurring Revenue (ARR) grew nearly 80% year over year. Customers spending more than $5 million and $10 million in ARR also increased by about 50%. These gains show that large enterprises are consolidating security budgets with Palo Alto Networks.
The company also highlighted several big wins. In the fourth quarter, a global consulting firm signed a $100 million-plus contract that made it a $50 million ARR customer. A European bank signed a $60 million platform deal led by XSIAM, and a U.S. insurer agreed to a $33 million multi-platform deal covering AI, cloud, and network security. These large transactions show that customers are ready to switch from fragmented tools to a more unified platform, and they are willing to spend big to do it.
More customers are turning to Palo Alto Networks because using multiple point products makes security complex and less effective. By shifting to a single vendor platform, companies expect better protection and simpler operations. With NGS ARR now at $5.58 billion, Palo Alto Networks is moving closer to its long-term goal of $15 billion ARR by 2030. Management believes platformization and large enterprise deals will play a key role in meeting that target. The Zacks Consensus Estimate for Palo Alto Networks’ fiscal 2026 total revenues is pegged at $10.43 billion, indicating a year-over-year increase of 13%.
How Competitors Fare Against PANW
Competitors like CrowdStrike (CRWD - Free Report) and Zscaler (ZS - Free Report) are also gaining ground through platform expansion and AI innovation.
CrowdStrike ended its second quarter of fiscal 2026 with $4.66 billion in ARR, reflecting 20% year-over-year growth. The robust increase was fueled by the growing adoption of CrowdStrike’s Falcon Flex subscription model.
Zscaler ended its third quarter of fiscal 2025 with $2.9 billion in ARR, reflecting 23% year-over-year growth. The robust growth was driven by Z-Flex and rapid traction across Zscaler’s three strategic growth pillars, which include Zero Trust Everywhere, Data Security Everywhere and Agentic Operations.
PANW’s Price Performance, Valuation and Estimates
Shares of Palo Alto Networks have gained 10.3% year to date compared with the Zacks Security industry’s growth of 12.6%.
PANW YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, Palo Alto Networks trades at a forward price-to-sales ratio of 12.7X, slightly higher than the industry’s average of 12.44X.
PANW Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Palo Alto Networks’ fiscal 2026 and 2027 earnings implies year-over-year growth of 12.9% and 13.6%, respectively. The estimates for fiscal 2026 and 2027 earnings have been revised upward over the past 30 days.
Image: Bigstock
PANW's Platform Strategy Builds Momentum: Can it Hit $15B ARR Target?
Key Takeaways
Palo Alto Networks (PANW - Free Report) is witnessing strong momentum with its platformization strategy, which involves getting customers to adopt multiple Palo Alto Networks’ products spanning across network, cloud, and security operations. Through this strategy, Palo Alto Networks is seeing larger customers adopt its full security platform, which is helping the company grow faster and secure bigger deals.
In the fourth quarter of fiscal 2025, customers with more than $20 million in Next Gen Security (NGS) Annual Recurring Revenue (ARR) grew nearly 80% year over year. Customers spending more than $5 million and $10 million in ARR also increased by about 50%. These gains show that large enterprises are consolidating security budgets with Palo Alto Networks.
The company also highlighted several big wins. In the fourth quarter, a global consulting firm signed a $100 million-plus contract that made it a $50 million ARR customer. A European bank signed a $60 million platform deal led by XSIAM, and a U.S. insurer agreed to a $33 million multi-platform deal covering AI, cloud, and network security. These large transactions show that customers are ready to switch from fragmented tools to a more unified platform, and they are willing to spend big to do it.
More customers are turning to Palo Alto Networks because using multiple point products makes security complex and less effective. By shifting to a single vendor platform, companies expect better protection and simpler operations. With NGS ARR now at $5.58 billion, Palo Alto Networks is moving closer to its long-term goal of $15 billion ARR by 2030. Management believes platformization and large enterprise deals will play a key role in meeting that target. The Zacks Consensus Estimate for Palo Alto Networks’ fiscal 2026 total revenues is pegged at $10.43 billion, indicating a year-over-year increase of 13%.
How Competitors Fare Against PANW
Competitors like CrowdStrike (CRWD - Free Report) and Zscaler (ZS - Free Report) are also gaining ground through platform expansion and AI innovation.
CrowdStrike ended its second quarter of fiscal 2026 with $4.66 billion in ARR, reflecting 20% year-over-year growth. The robust increase was fueled by the growing adoption of CrowdStrike’s Falcon Flex subscription model.
Zscaler ended its third quarter of fiscal 2025 with $2.9 billion in ARR, reflecting 23% year-over-year growth. The robust growth was driven by Z-Flex and rapid traction across Zscaler’s three strategic growth pillars, which include Zero Trust Everywhere, Data Security Everywhere and Agentic Operations.
PANW’s Price Performance, Valuation and Estimates
Shares of Palo Alto Networks have gained 10.3% year to date compared with the Zacks Security industry’s growth of 12.6%.
PANW YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, Palo Alto Networks trades at a forward price-to-sales ratio of 12.7X, slightly higher than the industry’s average of 12.44X.
PANW Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Palo Alto Networks’ fiscal 2026 and 2027 earnings implies year-over-year growth of 12.9% and 13.6%, respectively. The estimates for fiscal 2026 and 2027 earnings have been revised upward over the past 30 days.
Image Source: Zacks Investment Research
Palo Alto Networks currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.