Palo Alto Networks 2026 Q1 Earnings Beats Expectations with 15.7% Revenue Growth

Palo Alto Networks (PANW) reported Q1 2026 earnings that exceeded expectations, with revenue rising 15.7% year-over-year to $2.47 billion. The company raised its full-year revenue guidance to $10.5–$10.54 billion, reflecting confidence in sustained growth.

Revenue

Palo Alto Networks’ total revenue surged to $2.47 billion in Q1 2026, marking a 15.7% increase from $2.14 billion in the prior year. Product revenue reached $434 million, while subscription and support revenue accounted for the lion’s share at $2.04 billion. This performance underscores the company’s strong demand for its cybersecurity solutions and recurring revenue model.

Earnings/Net Income

The company’s EPS declined by 9.3% to $0.49 in Q1 2026, compared to $0.54 in the same period last year. Net income also fell by 4.8% to $334 million from $351 million. Despite these declines, the company’s non-GAAP EPS of $0.93 exceeded estimates, highlighting resilience in core profitability.

Post-Earnings Price Action Review

The strategy of buying Palo Alto Networks (PANW) shares after its revenue drop quarter-over-quarter on the financial report released date and holding for 30 days showed strong performance over the past three years. The total return was 109.2%, with an average annual return of 33.7%. This indicates a robust long-term investment outlook, despite the short-term volatility associated with earnings report releases.

CEO Commentary

Nikesh Arora, Chairman & CEO, emphasized Q1’s strong performance, noting 24% RPO growth and 29% NGS ARR growth. He highlighted platformization as a key driver, with robust demand in SASE, XSIAM, and AI security. Arora outlined strategic priorities, including advancing AI security, quantum readiness, and integrating CyberArk and Chronosphere to expand identity and observability markets.

Guidance

Palo Alto Networks provided optimistic guidance for Q2 2026, projecting revenue of $2.57–$2.59 billion and adjusted EPS of $0.93–$0.95. For the full year, the company expects revenue of $10.5–$10.54 billion, reflecting a 14% year-over-year growth.

Additional News

Palo Alto Networks announced the $3.35 billion acquisition of Chronosphere, a cloud-native observability platform, to bolster its AI and data management capabilities. The deal, expected to close in late 2026, aligns with the company’s strategy to expand its total addressable market. Additionally, the firm reiterated its $25 billion plan to acquire CyberArk, aiming to strengthen identity security. Leadership changes included the appointment of Mark Goodburn to the board and the retirement of Mary Pat McCarthy.