Palo Alto $PANW Q3 revenue +31% to $3.0B; FY2026 guide raised

Palo Alto Networks $PANW reported fiscal Q3 revenue of $3.002B, up 31% year over year and ahead of the $2.94B consensus cited by CNBC, while non-GAAP EPS of $0.85 topped the prior company guide of $0.78 to $0.80. The cybersecurity company also raised fiscal 2026 revenue guidance to $11.415B to $11.425B, giving the report a concrete earnings-surprise profile rather than a simple sector narrative.

The company release tied the quarter to two operating numbers investors watch closely. Next-Generation Security ARR rose 60% year over year to $8.1B, including $1.6B from CyberArk and Chronosphere, and remaining performance obligation increased 36% to $18.4B, including $1.8B from those acquired businesses. Revenue included $388M from CyberArk and Chronosphere, so the organic read-through is cleaner when those acquired contributions are separated.

Profitability was mixed on a GAAP basis because integration and acquisition-related expenses moved through the income statement. GAAP net loss was $177M, or $0.22 per diluted share, compared with GAAP net income of $262M, or $0.37 per diluted share, a year earlier. Non-GAAP net income was $684M, or $0.85 per diluted share, versus $561M, or $0.80 per diluted share, in fiscal Q3 2025.

Cash generation was the stronger line item. Net cash from operating activities reached $871M, compared with $628M a year earlier, and adjusted free cash flow was $910M, up from $578M. Trailing 12-month adjusted free cash flow margin was 38.5%, up 430 basis points year over year, close to management's stated FY2028 target of 40% adjusted free cash flow margin.

For fiscal Q4, Palo Alto guided to revenue of $3.345B to $3.355B, NGS ARR of $8.90B to $8.95B, RPO of $20.9B to $21.0B, and non-GAAP EPS of $0.96 to $0.98. For fiscal 2026, the company set non-GAAP EPS guidance at $3.77 to $3.79 and adjusted free cash flow margin at 37.5%.

The next checkpoint is whether the company can show the same bookings pace after the CyberArk and Chronosphere integration effects become part of the base period. Investors should also watch whether the $20.9B to $21.0B RPO target converts into revenue without compressing non-GAAP operating margin, which management now expects at 28.9% to 29.2% for fiscal 2026.

Not investment advice. Verify all figures with primary sources before acting.