A month has gone by since the last earnings report for Palo Alto Networks (PANW Quick QuotePANW - Free Report) . Shares have added about 10.9% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Palo Alto due for a pullback? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent catalysts for Palo Alto Networks, Inc. before we dive into how investors and analysts have reacted as of late.

Palo Alto Networks Q4 Earnings and Revenues Surpass Estimates

Palo Alto Networks delivered fourth-quarter fiscal 2025 non-GAAP earnings of 95 cents per share, which beat the Zacks Consensus Estimate by 7.9%. The figure improved 27% year over year.

Palo Alto Networks’ fourth-quarter fiscal 2025 revenues of $2.54 billion surpassed the Zacks Consensus Estimate by 1.6%. This compares to year-ago revenues of $2.19 billion.

Palo Alto Networks’ Q4 2025 Details

Product revenues rose 19.4% year over year to $573.9 million, accounting for 22.6% of total revenues. Subscription and Support revenues, which represented 77.4% of total revenues, grew 14.8% to $1.96 billion, driven by continued momentum across Prisma and Cortex offerings.

Deferred revenues at the end of the fiscal fourth quarter were $6.30 billion. Remaining performance obligation climbed to $15.8 billion, up 24% year over year. Meanwhile, Next-Generation Security annualized recurring revenues hit $5.58 billion, representing a 32% year-over-year increase and a 9.6% sequential rise.

Non-GAAP gross profit rose to $1.92 billion, up 14.3% year over year, while the non-GAAP gross margin contracted 100 basis points to 75.8%. Non-GAAP operating income increased 30.6% to $768.2 million, and the non-GAAP operating margin improved 340 basis points to 30.3% compared to the year-ago period.

PANW’s Balance Sheet & Cash Flow

As of July 31, 2025, Palo Alto Networks had $2.9 billion in cash, cash equivalents, and short-term investments, down from $3.3 billion as of April 30, 2025.

The company generated $1.02 billion in operating cash flow and reported a non-GAAP adjusted free cash flow of $ 954.5 million in the fourth quarter of fiscal 2025.

Palo Alto Networks Raises FY25 Guidance

For fiscal 2026, Palo Alto Networks expects revenues between $10.48 billion and $10.53 billion. Remaining Performance Obligation is projected in the range of $18.6-$18.7 billion. Next-Gen Security ARR is estimated in the band of $7.00-$7.10 billion.

Palo Alto Networks’ fiscal 2025 non-GAAP operating margin is projected in the range of 29.2- 29.7%. Its adjusted free cash flow margin is estimated in the range of 38-39%. The company expects non-GAAP earnings per share in the range of $3.75-$3.85. After a two-for-one stock split of PANW shares on Nov. 20, 2024, the outstanding share count is in the band of 710-716 million. The consensus mark for fiscal 2025 earnings is pinned at $3.65 per share, suggesting an improvement of 11.4%. The figure has been revised upward by a penny over the past 30 days.

For the first quarter of fiscal 2026, Palo Alto Networks projects revenues between $2.45 billion and $2.47 billion, which suggests year-over-year growth of 14-15%. The Zacks Consensus Estimate for fourth-quarter fiscal 2025 revenues is pegged at $2.44 billion, indicating a rise of 13.9%. Remaining Performance Obligations are anticipated between $15.4 billion and $15.5 billion. Next-Gen Security ARR is expected in the band of $5.82-$5.84 billion. Non-GAAP earnings are projected in the range of 88-90 cents per share. 

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a upward trend in fresh estimates.

The consensus estimate has shifted 9.48% due to these changes.

VGM Scores

At this time, Palo Alto has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. However, the stock was allocated a score of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Palo Alto has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Palo Alto is part of the Zacks Security industry. Over the past month, Fortinet (FTNT Quick QuoteFTNT - Free Report) , a stock from the same industry, has gained 2.2%. The company reported its results for the quarter ended June 2025 more than a month ago.

Fortinet reported revenues of $1.63 billion in the last reported quarter, representing a year-over-year change of +13.6%. EPS of $0.64 for the same period compares with $0.57 a year ago.

For the current quarter, Fortinet is expected to post earnings of $0.63 per share, indicating no change from the year-ago quarter. The Zacks Consensus Estimate has changed +0.4% over the last 30 days.

Fortinet has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.