Palo Alto Networks (PANW) Q4 2026 earnings summary

Executive summary

• Achieved record Q4 and FY 2026 results, with Q4 revenue up 34% to $3.41 billion and full-year revenue at $11.5 billion, driven by accelerated bookings, platformization, and AI-driven security demand.

• Next-Generation Security ARR surged 63% year-over-year to $9.1 billion in Q4, with nearly $1 billion net new NGS ARR and RPO at $21.2 billion, up 34%.

• Major acquisitions (CyberArk, Chronosphere, Embrace, Console) scaled faster than expected, contributing to platform growth and integration synergies.

• Platformization strategy and AI-driven security demand expanded the addressable market and drove customer standardization, with over 220 net new platformizations in Q4.

• Strong free cash flow and profitability, with FY 2026 adjusted free cash flow of $4.41 billion (38.4% margin) and non-GAAP EPS of $3.84.

Financial highlights

• Q4 revenue grew 34% year-over-year to $3.41 billion; full-year revenue reached $11.5 billion, up 24%.

• Q4 RPO ended at $21.2 billion, up 34%; NGS ARR reached $9.1 billion, up 63%, with nearly $1 billion net new NGS ARR in Q4.

• Gross margin for Q4 was 74.8% (down 100 bps YoY); full-year gross margin was 75.8% (down 60 bps YoY) due to SaaS mix shift.

• Q4 non-GAAP operating margin was 29.6%; full-year margin was 29.2%, up 40 bps YoY.

• Adjusted free cash flow for FY 2026 was $4.41 billion (38.4% margin), with $7.9 billion in cash and equivalents at year-end.

Outlook and guidance

• FY 2027 revenue expected at $14.1–$14.2 billion (23–24% growth); NGS ARR of $11.075–$11.175 billion (22–23% growth).

• RPO guidance for FY 2027 is $25.2–$25.4 billion (19–20% growth).

• Operating margin expected at 29.5%; adjusted free cash flow margin at 38%.

• Targeting 40% free cash flow margin by FY 2028 and $20 billion NGS ARR by FY 2030.

• Diluted non-GAAP EPS guidance for FY27 is $4.16–$4.19.