Palo Alto Networks Inc (PANW) Earnings History

Palo Alto Networks Inc - Q2 FY2026 EarningsBeat

Filed at: Feb 17, 2026, 4:14 PM EST|Read from source

EXECUTIVE SUMMARY

Palo Alto Networks delivered strong top-line growth driven by platformization and AI security adoption, complemented by operating efficiency and expanding non-GAAP operating margins. The company also announced two acquisitions, Chronosphere and CyberArk, which are expected to drive future growth.

POSITIVE HIGHLIGHTS

  • •

    Total revenue grew 15% year over year to $2.6 billion.

    positive
  • •

    Next-Generation Security ARR grew 33% year over year to $6.3 billion.

    positive
  • •

    Remaining performance obligation grew 23% year over year to $16.0 billion.

    positive
  • •

    Non-GAAP operating margin was 30.3%, an expansion from 28.4% in the prior year.

    positive
  • •

    GAAP net income increased to $432 million, or $0.61 per diluted share, from $267 million, or $0.38 per diluted share, in the prior year.

    positive
  • •

    Non-GAAP net income increased to $732 million, or $1.03 per diluted share, from $566 million, or $0.81 per diluted share, in the prior year.

    positive

CONCERNS & RISKS

  • •

    GAAP operating income grew to $397 million from $241 million, but the growth rate of GAAP operating income (64.7%) significantly outpaced revenue growth (15%), suggesting potential margin compression on a GAAP basis due to the significant increase in share-based compensation and acquisition-related costs.

    attention
  • •

    The company is undergoing significant integration efforts for two acquisitions (Chronosphere and CyberArk), which introduces execution risk and potential for disruption.

    attention

FINANCIAL METRICS

Revenue
Quarterly
$2.60B
+15.0%
Prior year: $2.26B
Net Income
Quarterly
$432.00M
+61.8%
Prior year: $267.00M
Annual (YTD)
$766.00M
N/A
Prior year: $618.00M
EPS (Diluted)
Quarterly
$0.61
+60.5%
Prior year: $0.38
Operating Income
Quarterly
$397.00M
+64.7%
Prior year: $241.00M
Annual (YTD)
$706.00M
N/A
Prior year: $527.00M
EPS (Basic)
Quarterly
$0.61
+48.8%
Prior year: $0.41

MARGIN ANALYSIS

Gross Margin
Current Quarter
73.6%
Prior Year
73.5%
YoY Change
+13 bps
Operating Margin
Current Quarter
15.3%
Prior Year
10.7%
YoY Change
+460 bps
Net Margin
Current Quarter
16.6%
Prior Year
11.8%
YoY Change
+482 bps

Margin expansion indicates improving profitability and operational efficiency. Measured in basis points (bps): 100 bps = 1.0%.

REVENUE BY SEGMENT — Q2 FY2026 2026

VISUAL OVERVIEW

|
Product
0.0%
N/A
Subscription and support
0.0%
N/A

DETAILED BREAKDOWN

|
SegmentCurrentPrior YrYoY% Total
Product
N/A———
Subscription and support
N/A———
Total Revenue$0.00M——100.0%

Segment performance shows business unit health and growth drivers.

MANAGEMENT GUIDANCE

FY2026

Next-Generation Security ARR
8,520,000,000—8,620,000,000
Mid-point: 8,570,000,000
"representing year-over-year growth of between 53% and 54%"
Remaining performance obligation
20,200,000,000—20,300,000,000
Mid-point: 20,250,000,000
"representing year-over-year growth of 28%"
Total revenue
$11280000.0B—$11310000.0B
Mid-point: $11295000.0B
"representing year-over-year growth of 22% to 23%"
Non-GAAP operating margin
28.5%—29.0%
Mid-point: 28.8%
Diluted non-GAAP net income per share
$3.65—$3.70
Mid-point: $3.67
"using 768 million to 773 million shares outstanding"
Adjusted free cash flow margin
37.0%—37.0%
Mid-point: 37.0%

Q3 FY2026

Next-Generation Security ARR
7,940,000,000—7,960,000,000
Mid-point: 7,950,000,000
"representing year-over-year growth of 56%"
Remaining performance obligation
17,850,000,000—17,950,000,000
Mid-point: 17,900,000,000
"representing year-over-year growth of between 32% and 33%"
Total revenue
$2941000.0B—$2945000.0B
Mid-point: $2943000.0B
"representing year-over-year growth of between 28% and 29%"
Diluted non-GAAP net income per share
$0.78—$0.80
Mid-point: $0.79
"using 812 million to 817 million shares outstanding"

Forward-looking guidance is subject to change and does not constitute a guarantee. Actual results may differ materially from these estimates.

EARNINGS CALL —

Call date
2026-02-17
Tone
N/A
Hedge density
N/A
Deflection rate
0.0%
View transcript Source Accession: 0001327567-26-000003

MANAGEMENT COMMENTARY

Continued strength in platformizations, accelerating due to AI, as customers modernize and normalize their cybersecurity stack.

— Palo Alto Networks Inc, Q2 FY2026 2026 Earnings Call

Steady and strong adoption of AI security, expected to be a long-term trend.

— Palo Alto Networks Inc, Q2 FY2026 2026 Earnings Call

Excited to welcome employees of Chronosphere and CyberArk to drive future growth.

— Palo Alto Networks Inc, Q2 FY2026 2026 Earnings Call

Commentary excerpts from earnings call transcripts provide management's perspective on performance, strategy, and outlook. Always review full transcripts for complete context.

OPERATIONAL METRICS

Next-Generation Security ARR
6300.0M
+33.0% YoY
dollars
Remaining performance obligation
16000.0M
+23.0% YoY
dollars

Operational metrics provide insight into business drivers and customer engagement beyond traditional financial measures.