Palo Alto Networks, Inc.

Reported Q3 revenue was $3 billion, up 31% year over year. Non-GAAP diluted EPS was $0.85, $0.05 above the high end of guidance, while GAAP net loss per share was $0.22. Total gross margin was 75.8%, product gross margin was 78.8% (up 40 bps year over year), and non-GAAP operating margin was 21.3%, flat year over year. Adjusted free cash flow was $910 million, up 57% year over year, and trailing 12-month adjusted free cash flow was $4.08 billion with a 38.5% margin. NGS ARR reached $8.13 billion, up 60% year over year; excluding CyberArk and Chronosphere, NGS ARR was $6.5 billion, up 28%. RPO was $18.4 billion, up 36% year over year; excluding CyberArk and Chronosphere, RPO grew 22%. For Q4 fiscal 2026, guidance calls for NGS ARR of $8.9 billion to $8.95 billion, RPO of $20.9 billion to $21 billion, revenue of $3.345 billion to $3.355 billion, and non-GAAP EPS of $0.96 to $0.98. For full-year fiscal 2026, management raised guidance to revenue of $11.415 billion to $11.425 billion, operating margin of 28.9% to 29.2%, non-GAAP EPS of $3.77 to $3.79, and adjusted free cash flow margin of 37.5%.

Nikesh Arora framed the quarter as a sign that AI is making cybersecurity more important, not less, and argued that real-time, platform-based security is becoming mandatory as attack cycles compress to minutes. He emphasized strong traction in platformization, AI security, network security, SASE, XSIAM, and observability, and said customers are increasingly engaging around frontier AI defense and Agentic AI use cases. His tone was highly confident and expansive, repeatedly describing the company as in pole position and saying the quarter validated the company’s platform strategy.

Dipak Golechha focused on the financial execution: broad-based demand, outperformance versus guidance, and early M&A integration progress. He cited $3 billion of revenue, 75.8% gross margin, 21.3% non-GAAP operating margin, $910 million of adjusted free cash flow, and $1 billion of share repurchases at an average cost of $147.69, with $1 billion of remaining repurchase capacity. He also highlighted that hardware is about 10% of revenue, that recurring software now makes up 46% of trailing 12-month product revenue versus 22% three years ago, and that management is raising full-year guidance and expects CyberArk synergy benefits 3 to 6 months earlier than originally expected.

Analysts pressed on whether AI data center build-outs are driving the network-security strength, how Prisma AIRS and XSIAM address faster attack/response cycles, and whether observability and security are converging. Management said hyperscaler and AI infrastructure growth is lifting inspection demand, and that Chronosphere and XSIAM together create cross-pollination of data and AI-driven automation across observability and security. On CyberArk, management said the priority is not breaking the business, preserving top-line momentum, modernizing the product, and driving integration and profitability improvements; they also said they have had about 1,000 cross-organization engagements and are ahead on synergy timing. On Koi/agentic endpoint security, management said AI tools are creating a new endpoint ecosystem that requires specialized protection, which is driving strong customer interest.