Palo Alto Networks forecasts $10.5B revenue from AI-driven cybersecurity demand

Palo Alto Networks forecast fiscal 2026 revenue and profit above Wall Street estimates, driven by growing demand for its AI-powered cybersecurity solutions. The company’s strong outlook reflects an AI-driven upgrade cycle as enterprises accelerate cloud adoption and modernize security operations amid a wave of high-profile cyberattacks.

Key financial projections: Palo Alto’s guidance significantly exceeded analyst expectations across multiple metrics.

• The company projected annual revenue between $10.48 billion and $10.53 billion, above analysts’ average estimate of $10.43 billion.
• Adjusted profit per share is expected to reach $3.75 to $3.85, surpassing estimates of $3.67 for the fiscal year.
• First-quarter revenue forecast of $2.45 billion to $2.47 billion came in above expectations of $2.43 billion.

What’s driving growth: Rising cybersecurity threats and AI adoption are fueling demand for Palo Alto’s solutions.

• A wave of high-profile cyberattacks has hit global companies including Microsoft, UnitedHealth Group, Walt Disney, and Oracle, prompting increased need for robust security solutions.
• The company is benefiting from an AI-driven upgrade cycle as enterprises accelerate their cloud adoption and modernize security operations.
• New product launches include cloud security platform Cortex Cloud and security platform Prisma AIRS designed to protect AI applications.

Major acquisition and leadership changes: Palo Alto announced significant strategic moves to deepen its cybersecurity offerings.

• The company’s planned $25 billion CyberArk acquisition will expand its cybersecurity capabilities.
• Founder and Chief Technology Officer Nir Zuk will retire after over 20 years with the company.
• Long-time product leader Lee Klarich has been named as the new CTO and board member, and will chair the board’s security committee to bolster the company’s AI-driven platform strategy.

Strong quarterly performance: Palo Alto reported upbeat fourth-quarter results that beat expectations.

• Revenue grew 16% to $2.54 billion from a year ago for the quarter ended July 31.
• The company reported adjusted earnings per share of 95 cents, beating estimates of 88 cents.

Competitive landscape: Palo Alto competes with major cybersecurity players including CrowdStrike, Fortinet, and Zscaler.

• Its customers include enterprise giants such as Salesforce, Dell Technologies, and NetApp.
• Shares rose nearly 5% in extended trading following the announcement.