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Palo Alto Networks (PANW) · Q2 2026 results and valuation
Share price: $334.47 · 2026-11-11
Palo Alto Networks is an artificial intelligence cybersecurity provider that offers platforms and services to secure enterprise users, networks, clouds, and identities. The company provides security for cloud infrastructure, applications, and AI workloads for customers in various markets. Its portfolio includes network and AI security, security operations, cloud security, and identity security. Source: 10-K annual report (2026-09-10)
Results Q2 2026 vs Q1 2026 · previous quarter · fiscal Q4 2026 · published 1 Sep 2026 and 2 Jun 2026
Net loss widened on the previous quarter. Management sounded cautious, though noticeably more positive answering analysts.
1 · Numbers
Loss widened
Net income vs Q1 2026
Outlook given
Net income -282.0M vs -177.0M
Revenue +13.6%
Why Against the same quarter last year (turned to a loss), net income declined because of a mix shift towards faster growing SaaS offerings, which continue to scale with the company's platforms and have yet to reach their gross margin maturity.
2 · How management spoke
Cautious
Among the least upbeat of all company calls
Answers to analysts: upbeat, and more positive than the script.
Similar to last call.
3 · What stood out
Palo Alto Networks reported that net revenue retention for the platformized cohort exceeded 120% in Q4 due to expansion and retention from platform standardization.
Valuation
Is Palo Alto Networks undervalued?
Reverse DCF. Free cash flow from the last full fiscal year (2026-07-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At 18.5% growth a year (3-year revenue growth), the model's fair value is $224.02 a share — the stock trades 49% above it. Today's price assumes 24.1% growth a year.
Current price
$334.47
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+24.1% for 10 yrs
Fair value / share
$224.02
Buy below
$168.01
Price vs fair value
Overvalued 49%
Price vs buy-below price
Overvalued 99%
Management expects
Revenue +23.5% · from the Q2 2026 report: “Palo Alto Networks projects revenue of $14.1 billion to $14.2 billion, representing 23% to 24% growth, with a guided operating margin of 29.5% and diluted…”
A guidance figure for revenue, usually one year ahead, not a 10-year free-cash-flow rate.
Read between the lines
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Guidance
The company reinforced its confidence in achieving a 40% free cash flow margin target in fiscal 2028 due to cash flow visibility, margin expansion focus, and double-digit bookings growth.
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Guidance
Palo Alto Networks projects revenue of $14.1 billion to $14.2 billion, representing 23% to 24% growth, with a guided operating margin of 29.5% and diluted non-GAAP EPS of $4.16 to $4.19.
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Figure
Net revenue retention for the platformized cohort exceeded 120% in Q4 because standardizing the platform yielded expansion and retention beyond initial adoption.
Source quote
“Beyond initial adoption, standardizing our platform yields superior retention and expansion, with NRR, or net revenue retention, exceeding 120% for our platformized cohort in Q4.”
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Guidance
Palo Alto Networks aims for over 4 thousand platformizations by fiscal 2030 to serve as a bedrock for reaching its $20 billion next generation security ARR target.
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Figure
Revenue grew 34% to $3.41 billion in the fourth quarter and reached $11.5 billion for the full fiscal year, up 24% year over year.
Source quote
“In total, our revenue grew 34% to $3.41 billion in the fourth quarter, and for the full fiscal year revenue reached $11.5 billion up 24% year over year.”
3 more
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Figure
Palo Alto Networks achieved a record RPO of $21.2 billion, surpassing the $20 billion threshold for the first time and representing a growth rate of 34%.
Source quote
“We achieved record RPO, surpassing the $20 billion threshold for the first time, to close the year at $21.2 billion representing a growth rate of 34%.”
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Figure
GSARR reached $9.1 billion, up 63%, resulting in one of the company's most substantial next generation security ARR performances to date.
Source quote
“And GSARR reached $9.1 billion, up 63% enabling us to report 1 of our most substantial next generation security ARR performances to date.”
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Figure
XSIAM, maintained its strong momentum while Prisma AIRS achieved a significant milestone surpassing $100 million in ARR within 4 quarters of general availability.
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q2 2026. Ring: Q1 2026.
Management was more positive answering analysts than in its script — usually a sign it was comfortable with the details it was asked about.
Sentences that drove the tone
“As I mentioned earlier, our industry leading R&D investment over the years has fueled our innovation engine, and expanded our market opportunity into new categories.”
“XSIAM, maintained its strong momentum while Prisma AIRS achieved a significant milestone surpassing $100 million in ARR within 4 quarters of general availability.”
“Evaluate if we are able going to be able to meet beat, or exceed your consensus, We are delighted to see that we expect with our execution and the tailwinds,...”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-07-31)
| Metric | Q2 2026period end 2026-07-31 | Q1 2026period end 2026-04-30 | Change | Q2 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 3.41B | 3.00B | +13.6% | 2.54B | +34.5% |
| Gross profit | 2.30B | 2.03B | +13.6% | 1.86B | +24.1% |
| Operating income | 172.0M | -183.0M | Turned profit | 497.0M | −65.4% |
| Net income | -282.0M | -177.0M | Loss widened | 254.0M | Turned loss |
| EPS | -0.39 | -0.22 | Loss widened | 0.36 | Turned loss |
| P/E today 784.6 | 829.6 | 155.9 | +673.7 | 108.5 | +721.1 |
Topics
Most discussed now
- These results are a testament to the deep collaboration with Palo Alto Networks' new colleagues from a go to market perspective its...
- The power of Palo Alto Networks' architecture lies in the fact that live telemetry is already resonant with an XSIAM, allowing us...
- This performance is a direct result of record breaking platformization adoption the growing urgency among customers to fortify their…
- I remember my first analyst day in 2019, shortly after I arrived, Palo Alto Networks set a high bar to reach $1...
- Before walking through the details, please note that I will be speaking to Palo Alto Networks' results both on a reported and...
Faded since Q1 2026
- Fading Palo Alto Networks has entered the era of truly cyber capable systems where models like [ Mythos ] possess the autonomous capability...
- Fading All of that also becomes a feed into the SOC, and the SOC has to be able to ingest data...
- Fading It starts to meet the number at which you're better off not building your own or using open source with...
- Fading This is critical for securing rising AI coding tools and agents as they proliferate Palo Alto Networks'...
Latest announcements
Official filings, newest first. Summaries are generated from each filing and its attachment; every figure is checked against the source.
- Results of operations · SEC 8-K
Palo Alto Networks reported total revenue of $3.41 billion for the fiscal fourth quarter of 2026, representing a 34% increase compared to the previous year.
- Director or officer change; Articles or bylaws amended · SEC 8-K
- Results of operations · SEC 8-K
Palo Alto Networks reported total revenue of $3.0 billion for the third quarter of fiscal 2026, representing a 31% increase compared to the previous year.
- Material agreement; New financial obligation · SEC 8-K
The company entered into three lease amendments with Santa Clara Phase III entities on April 8, 2026, creating new financial obligations.
- Other events · SEC 8-K
Palo Alto Networks, Inc. is a party to an indenture dated June 10, 2025, and a supplemental indenture dated February 11, 2026, regarding CyberArk's 0.00% Convertible Senior Notes due 2030.
- Other events · SEC 8-K
The Board approved an additional $1.0 billion repurchase of common stock, increasing the existing $4.1 billion authorization, following the repurchase of 6.8 million shares at an average price of $147.69 in February 2026.
- Results of operations · SEC 8-K
Palo Alto Networks reported fiscal second quarter 2026 revenue of $2.6 billion, up 15% year over year, and GAAP net income of $432 million compared to $267 million in the prior year.
- Material agreement; New financial obligation; Other events · SEC 8-K
Palo Alto Networks completed the acquisition of CyberArk, with CyberArk shareholders receiving $45.00 in cash and 2.2005 shares of Palo Alto Networks common stock for each CyberArk ordinary share.
Balance sheet & ownership
From SEC filings; short interest is FINRA data via Yahoo. Collected 2026-10-11.
Cash & runway
Cash & equivalents
$2.51B
2026-07-31
Short-term investments
$557.0M
Long-term investments
$4.83B
total liquidity $7.91B
Implied runway
—
operating cash flow positive over the TTM window
Dilution
weighted-average basic shares, per quarter. Change: +20.5% YoY, +13.8% QoQ.
| Quarter | Shares |
|---|---|
| Q4 2024 | 654.0M |
| Q1 2025 | 659.0M |
| Q2 2025 | 665.0M |
| Q4 2025 | 679.0M |
| Q1 2026 | 704.0M |
| Q2 2026 | 801.0M |
Shares outstanding: 818.0M (2026-08-31)
Insider transactions
Form 4 open-market trades (codes S/P), trailing 12 months. Coverage: newest 50 of 64 filings; 50 filings parsed.
Sold by insiders
321.2K shares
$78.7M · 81 transactions
Bought by insiders
68.1K shares
$10.0M · 2 transactions
Net direction
net selling
Catalyst calendar
management-stated targets — from the latest earnings call; plans, not promises.
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fiscal 2030
long term objective of over 4 thousand platformizations
Source quote
“As we look forward, we remain on track towards our long term objective of over 4 thousand platformizations by fiscal 2030, which serves as a bedrock for reaching our $20 billion next generation security ARR target.”
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the coming quarters
dominance of the cybersecurity dialogue
Source quote
“The third, involves an emerging inflection point that we expect will dominate the cybersecurity dialogue in the coming quarters.”
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FY 26
strong early traction with this cohort, including multiple 7-figure bookings in the fourth quarter
Source quote
“We achieved strong early traction with this cohort in FY 26, including multiple 7-figure bookings in the fourth quarter.”
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FY 2026
platform advantage drove exceptional results in our SASE business
Source quote
“In FY 2026, our platform advantage drove exceptional results in our SASE business, where bookings grew 40%, with broad strength across access, SD WAN, and secure browser.”
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the next 5 to 7 years
becoming the SASE leader
Source quote
“We are playing to win, and remain on a clear trajectory to become the SASE leader in the next 5 to 7 years.”