Palo Alto Networks shares slip despite third-quarter earnings and revenue beat
Shares of Palo Alto Networks Inc. were down slightly in late trading today despite the cybersecurity company beating expectations on earnings and revenue in its fiscal 2026 third quarter and raising its outlook for the rest of the year.
For the quarter that ended on April 30, Palo Alto reported adjusted earnings of 85 cents per share, up from 80 cents in the same quarter of the previous year, on revenue of $3 billion, up 31% year-over-year. Analysts had been expecting earnings of 80 cents per share on revenue of $2.94 billion.
The revenue figure included $388 million from CyberArk Software Ltd. and observability platform Chronosphere Inc., which Palo Alto bought for $3.35 billion in a deal that closed in late January. Stripping out the acquisitions, organic growth still accelerated, Chief Executive Nikesh Arora said.
Next-generation security annual recurring revenue grew 60% to $8.1 billion, with CyberArk and Chronosphere contributing $1.6 billion to the figure. Remaining performance obligation, a measure of contracted future revenue, rose 36% to $18.4 billion.
