TLDR
- Palo Alto Networks reported Q4 profit of $253.8 million, down year-over-year.
- Adjusted EPS of $0.95 beat analyst expectations of $0.89.
- Q4 revenue grew 16% to $2.5 billion, topping estimates.
- Founder and CTO Nir Zuk retired, with Lee Klarich appointed as successor.
- Strong ARR and forward guidance highlight resilient demand in cybersecurity.
Palo Alto Networks, Inc. (NASDAQ: PANW) closed regular trading at $176.17 (-0.52%) and traded at $185.40 (+5.24%) after hours ahead of its earnings call scheduled for 4:30 PM EDT.
Palo Alto Networks, Inc. (PANW)
The company reported fiscal Q4 2025 GAAP profit of $253.8 million, or $0.36 per share, down from $357.7 million, or $0.51 per share, a year earlier. Despite the decline, results outperformed Wall Street expectations.
On a non-GAAP basis, Palo Alto delivered adjusted earnings of $0.95 per share, surpassing the consensus estimate of $0.89. Revenue rose 15.9% to $2.536 billion, compared with $2.189 billion last year, reflecting continued demand for its cybersecurity platforms.
Annual Growth and ARR Momentum
For fiscal year 2025, total revenue increased 15% year-over-year to $9.2 billion. Next-Generation Security Annualized Recurring Revenue (ARR) jumped 32% to $5.6 billion, while remaining performance obligations expanded 24% to $15.8 billion, underscoring growing demand for subscription-based services.
These metrics illustrate the company’s ability to capture enterprise security spending amid heightened threats and digital transformation. Importantly, recurring revenue growth supports long-term visibility, a crucial factor in sustaining profitability.
Forward Guidance
For fiscal Q1 2026, Palo Alto forecasts revenue between $2.45 billion and $2.47 billion, reflecting 15% year-over-year growth. Expected diluted non-GAAP EPS ranges from $0.88 to $0.90, with Next-Generation Security ARR projected at $5.82 to $5.84 billion.
For fiscal year 2026, management expects revenue between $10.475 billion and $10.525 billion, up 14% year-over-year. ARR is anticipated to grow to $7.0–$7.1 billion, while remaining performance obligations are projected at $18.6–$18.7 billion. Non-GAAP EPS is forecast in the range of $3.75 to $3.85, with adjusted free cash flow margins of 38%–39%.
Leadership Transition
A key announcement was the retirement of Nir Zuk, founder and Chief Technology Officer, who pioneered the next-generation firewall and built Palo Alto into a global cybersecurity leader since 2005. Zuk emphasized that the company’s vision remains intact under CEO Nikesh Arora and his successor, Lee Klarich.
$PANW Palo Alto Networks Announces Retirement of Founder and CTO Nir Zuk pic.twitter.com/EXsnsGgepE
— Sam Badawi (@samsolid57) August 18, 2025
Lee Klarich, who joined Palo Alto in 2006 and has served as Chief Product Officer, has been promoted to CTO and appointed to the board. Klarich will oversee the company’s technology roadmap, focusing on AI-driven security solutions and platformization strategies.
Conclusion
Palo Alto Networks delivered a mixed but resilient Q4, with profit declining but beating expectations on adjusted earnings and revenue growth. Strong ARR expansion and forward guidance reflect robust demand for cybersecurity services. The leadership transition from Nir Zuk to Lee Klarich marks a new era, with continued focus on AI-driven platforms. While the stock has lagged broader markets year-to-date, its long-term returns underscore its resilience and positioning as a cybersecurity powerhouse.
