Palo Alto Networks reported fiscal fourth-quarter revenue of $3.41 billion, up 34% year over year, beating analyst estimates of $3.35 billion. Adjusted earnings per share reached $1.02, above the $0.98 consensus. Next-Generation Security annual recurring revenue jumped 63% to $9.10 billion, and remaining performance obligations rose 34% to $21.2 billion.
The company also announced the acquisition of Console, an AI-native platform for automating enterprise workflows. Console will be integrated into Cortex, enabling AI agents to investigate alerts, prioritize security events and automate remediation. CEO Nikesh Arora said the shift is toward “software-as-an-agent,” giving the platform “arms and legs” for autonomous security outcomes.
Despite the beat, PANW stock fell after an initial post-earnings rally, as investors focused on organic growth and acquisition dependence. For fiscal 2027, Palo Alto guided to revenue of $14.10 billion to $14.20 billion and NGS ARR of $11.075 billion to $11.175 billion, with a long-term target of $20 billion NGS ARR by fiscal 2030.
The results highlight accelerating AI cybersecurity demand. Gartner projects global AI spending will reach $2.59 trillion in 2026, while AI cybersecurity spending may nearly double from $25.9 billion to $51.3 billion in 2025 and approach $86 billion by 2027. McKinsey found 40% of large enterprises are scaling AI agents, up from 27% a year earlier. The quarter included a GAAP net loss of $282 million, compared with net income of $254 million a year earlier.
