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Palo Alto Networks Q3 Earnings and Revenues Surpass Estimates
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Key Takeaways
PANW Q3 revenues jumped 31% to $3B, exceeding estimates on strong AI security demand.
Palo Alto Networks grew Next-Generation Security ARR 60% and RPO 36% year over year.
PANW raised fiscal 2026 guidance, projecting revenue growth of 24% and higher earnings.
Palo Alto Networks (PANW - Free Report) delivered third-quarter fiscal 2026 non-GAAP earnings of 85 cents per share, which beat the Zacks Consensus Estimate of 81 cents by 4.9%. The figure improved 6.3% year over year.
Palo Alto Networks’ earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 7.03%.
PANW reported third-quarter fiscal 2026 revenues of $3 billion, which topped the Zacks Consensus Estimate of $2.92 billion by 2%. Revenues increased 31% year over year from $2.29 billion in the year-ago quarter. Management attributed the quarter’s strength to accelerating organic bookings momentum as customers turned to the company to secure AI deployments at scale.
PANW’s Q3 in Detail
Product revenues increased to $594 million from $453 million in the year-ago quarter, accounting for 19.8% of total revenues. Subscription and support revenues, which represented 80.2% of total revenues, rose to $2.41 billion from $1.84 billion, reflecting the company’s continued shift toward recurring revenues.
Palo Alto Networks, Inc. Price, Consensus and EPS Surprise
Remaining performance obligation (RPO) rose to $18.4 billion, up 36% year over year, including contributions from CyberArk and Chronosphere. Next-Generation Security ARR climbed to $8.13 billion, up 60% year over year, supported by platform adoption and growth across the company’s next-generation portfolio.
Non-GAAP gross profit grew to $2.27 billion compared to a non-GAAP gross margin at 75.8%. Non-GAAP operating income increased to $814 million, while the non-GAAP operating margin remained strong at 27.1%, reflecting continued profitability strength.
PANW’s Balance Sheet & Cash Flow
As of April 30, 2026, Palo Alto Networks had $3.11 billion in cash and cash equivalents and short-term investments.
Cash generation strengthened year over year. Net cash provided by operating activities was $871 million, up from $554 million in the prior quarter. Adjusted free cash flow was $910 million compared with $502 million in the prior quarter, while the trailing 12-month adjusted free cash flow margin was 38.5%, up 430 basis points year over year.
PANW’s FY26 Guidance
For fiscal 2026, Palo Alto Networks now expects revenues in the range of $11.41 billion to $11.42 billion, suggesting year-over-year growth of 24%. The Zacks Consensus Estimate for fiscal 2026 revenues is pegged at $11.3 billion.
RPO is projected to be in the range of $20.9-$21.0 billion, while Next-Gen Security ARR is forecasted between $8.9 billion and $8.95 billion, implying 59-60% annual growth. The company projects a non-GAAP operating margin in the range of 28.9% to 29.2% and an adjusted free cash flow margin of 37.5%.
PANW’s non-GAAP earnings per share (EPS) are expected in the band of $3.77 to $3.79. The Zacks Consensus Estimate for fiscal 2026 earnings is pegged at $3.70.
For the fiscal fourth quarter of 2026, Palo Alto Networks expects revenues in the range of $3.34 billion to $3.35 billion, indicating year-over-year growth of 32%. The Zacks Consensus Estimate for the fourth quarter of fiscal 2026 revenues is pegged at $3.28 billion.
The company also guided Next-Generation Security ARR to $8.90 billion to $8.95 billion, suggesting growth of 59% to 60%, and RPO in the range of $20.9 billion to $21.0 billion.
Non-GAAP EPS for the fiscal fourth quarter are projected in the range of 96 cents to 98 cents. The Zacks Consensus Estimate for fourth-quarter fiscal 2026 earnings is pegged at 96 cents.
Zacks Rank and Stocks to Consider
Palo Alto Networks has a Zacks Rank #4 (Sell) at present.
View the Zacks #1 Rank List
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Palo Alto Networks Q3 Earnings and Revenues Surpass Estimates
Key Takeaways
Palo Alto Networks (PANW - Free Report) delivered third-quarter fiscal 2026 non-GAAP earnings of 85 cents per share, which beat the Zacks Consensus Estimate of 81 cents by 4.9%. The figure improved 6.3% year over year.
Palo Alto Networks’ earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 7.03%.
PANW reported third-quarter fiscal 2026 revenues of $3 billion, which topped the Zacks Consensus Estimate of $2.92 billion by 2%. Revenues increased 31% year over year from $2.29 billion in the year-ago quarter. Management attributed the quarter’s strength to accelerating organic bookings momentum as customers turned to the company to secure AI deployments at scale.
PANW’s Q3 in Detail
Product revenues increased to $594 million from $453 million in the year-ago quarter, accounting for 19.8% of total revenues. Subscription and support revenues, which represented 80.2% of total revenues, rose to $2.41 billion from $1.84 billion, reflecting the company’s continued shift toward recurring revenues.
Palo Alto Networks, Inc. Price, Consensus and EPS Surprise
Palo Alto Networks, Inc. price-consensus-eps-surprise-chart | Palo Alto Networks, Inc. Quote
Remaining performance obligation (RPO) rose to $18.4 billion, up 36% year over year, including contributions from CyberArk and Chronosphere. Next-Generation Security ARR climbed to $8.13 billion, up 60% year over year, supported by platform adoption and growth across the company’s next-generation portfolio.
Non-GAAP gross profit grew to $2.27 billion compared to a non-GAAP gross margin at 75.8%. Non-GAAP operating income increased to $814 million, while the non-GAAP operating margin remained strong at 27.1%, reflecting continued profitability strength.
PANW’s Balance Sheet & Cash Flow
As of April 30, 2026, Palo Alto Networks had $3.11 billion in cash and cash equivalents and short-term investments.
Cash generation strengthened year over year. Net cash provided by operating activities was $871 million, up from $554 million in the prior quarter. Adjusted free cash flow was $910 million compared with $502 million in the prior quarter, while the trailing 12-month adjusted free cash flow margin was 38.5%, up 430 basis points year over year.
PANW’s FY26 Guidance
For fiscal 2026, Palo Alto Networks now expects revenues in the range of $11.41 billion to $11.42 billion, suggesting year-over-year growth of 24%. The Zacks Consensus Estimate for fiscal 2026 revenues is pegged at $11.3 billion.
RPO is projected to be in the range of $20.9-$21.0 billion, while Next-Gen Security ARR is forecasted between $8.9 billion and $8.95 billion, implying 59-60% annual growth. The company projects a non-GAAP operating margin in the range of 28.9% to 29.2% and an adjusted free cash flow margin of 37.5%.
PANW’s non-GAAP earnings per share (EPS) are expected in the band of $3.77 to $3.79. The Zacks Consensus Estimate for fiscal 2026 earnings is pegged at $3.70.
For the fiscal fourth quarter of 2026, Palo Alto Networks expects revenues in the range of $3.34 billion to $3.35 billion, indicating year-over-year growth of 32%. The Zacks Consensus Estimate for the fourth quarter of fiscal 2026 revenues is pegged at $3.28 billion.
The company also guided Next-Generation Security ARR to $8.90 billion to $8.95 billion, suggesting growth of 59% to 60%, and RPO in the range of $20.9 billion to $21.0 billion.
Non-GAAP EPS for the fiscal fourth quarter are projected in the range of 96 cents to 98 cents. The Zacks Consensus Estimate for fourth-quarter fiscal 2026 earnings is pegged at 96 cents.
Zacks Rank and Stocks to Consider
Palo Alto Networks has a Zacks Rank #4 (Sell) at present.
Here are some better-ranked stocks from the Zacks Computer and Technology sector.
Amphenol (APH - Free Report) carries a Zacks Rank #2 (Buy) at present. Amphenol shares have gained 9.8% in the year-to-date period. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Analog Devices (ADI - Free Report) carries a Zacks Rank #2 at present. Analog Devices’ shares have surged 56% in the year-to-date period.
Ciena (CIEN - Free Report) sports a Zacks Rank #1 at present. Ciena shares have surged 168.1% in the year-to-date period.