Revenue, Earnings Top EstimatesRevenue rose 31% year over year to approximately $3 billion, topping analyst estimates of $2.94 billion. Adjusted earnings came in at 85 cents per share, ahead of consensus estimates of 80 cents per share.The cybersecurity company also reported remaining performance obligations (RPO) of $18.4 billion, up 36% from a year earlier, reflecting strong demand and future revenue visibility.Next-Generation Security Growth AcceleratesAnnual recurring revenue (ARR) for Palo Alto’s Next-Generation Security business reached $8.13 billion, up 60% year over year and above company guidance. Excluding contributions from CyberArk and Chronosphere, organic NGS ARR increased 28%.Current RPO climbed 34% to $8.3 billion, while total RPO increased 36% to $18.4 billion. On an organic basis, total RPO grew 22%.Services revenue increased 31% to $2.4 billion, while product revenue rose to $594 million during the quarter.SASE ARR reached $1.6 billion, up 40% year over year, driven by demand for integrated hybrid-security platforms.The company also reported strong firewall demand. Software firewall ARR grew 25%, while next-generation firewall bookings increased nearly 40%, marking the strongest hardware demand environment in a decade.XSIAM ARR surpassed $600 million, doubling from a year ago. The platform now serves 740 customers, with most achieving incident response times of less than 10 minutes.Net retention rate was 120%, while churn remained in the low single digits.Outlook RaisedFor the fiscal fourth quarter, Palo Alto Networks expects revenue of $3.35 billion to $3.36 billion, above analyst estimates of $3.28 billion. Adjusted earnings are projected between 96 cents and 98 cents per share, compared with consensus estimates of 94 cents.The company raised its full-year revenue outlook to $11.42 billion-$11.43 billion from its prior forecast of $11.28 billion-$11.31 billion. Analysts were expecting $11.30 billion.Palo Alto also increased its full-year adjusted earnings outlook to $3.77-$3.79 per share from $3.65-$3.70 per share. Analysts were projecting $3.69 per share.The company expects full-year NGS ARR of $8.9 billion-$8.95 billion, representing growth of 59%-60%.AI Threats Drive Security UrgencyPalo Alto executives said the rapid advancement of artificial intelligence is creating a new wave of cybersecurity spending. During the earnings call, CEO Nikesh Arora warned that frontier AI models can identify and weaponize software vulnerabilities in minutes, compared with a process that previously took months of manual effort. He added that the company’s Unit 42 researchers recently simulated a ransomware attack from initial access to data exfiltration in just 25 minutes, highlighting the growing urgency for enterprises to adopt AI-driven security defenses.Price Action And Analyst OutlookPalo Alto Networks shares were down 3.43% at $287.00 during premarket trading on Wednesday. The stock is approaching its 52-week high of $302.95, according to Benzinga Pro data.Despite today’s drop, Wall Street sentiment remains overwhelmingly positive. The stock carries a Buy rating with an average price forecast of $263.08. Recent analyst moves include: