Palo Alto Networks delivered a stronger-than-expected fourth-quarter earnings report after the bell on Tuesday, beating Wall Street estimates on both revenue and profit and issuing fiscal 2027 guidance well above consensus. The cybersecurity giant reported adjusted earnings per share of $1.02, up from $0.95 a year earlier and ahead of the $0.98 consensus estimate. Revenue reached $3.41 billion, a 34% year-over-year increase, topping the $3.35 billion analysts had forecast and marking the second consecutive quarter the company exceeded its revenue guidance midpoint, this time by $60 million.
The stock rose roughly 5% in after-hours trading, recovering from a 5.2% drop during the regular session. Investors had been cautious ahead of the report after the stock fell following four of its previous five earnings releases. Still, Palo Alto shares were up about 96% year-to-date and traded near their 52-week high of $399.
Key subscription metrics also impressed. Next-generation security annual recurring revenue reached $9.1 billion, up 63% year-over-year, while initial fiscal 2027 NGS ARR guidance of $11.08 billion to $11.18 billion came in above the $10.9 billion consensus. Full-year revenue guidance of $14.10 billion to $14.20 billion beat the $13.79 billion estimate by roughly $300 million. Software firewall ARR grew 29% year-over-year, Prisma AIRS reached about $120 million in ARR, XSIAM added $100 million quarter-over-quarter to hit $700 million, and the company reported $450 million in SASE competitive displacements.
CEO Nikesh Arora emphasized AI security demand on the earnings call, saying that validating, interpreting and resolving modern threats requires broad cybersecurity platforms working alongside frontier AI. The company also announced the acquisition of Console, an AI-native operations and IT platform, adding to earlier deals for CyberArk and Chronosphere.
Analysts highlighted the upbeat guidance. Bernstein reiterated an Outperform rating with a $253 price target, while Evercore had maintained a Buy rating and $415 target before the print. The broader Wall Street consensus remained Strong Buy, with 37 Buy ratings and 5 Holds ahead of the release.
