Here is a post I put on the premium boards after PANW’s recent earnings release. Thought you all might interested….
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Fiscal fourth quarter revenue grew 16% year over year to $2.5 billion. Fiscal year 2025 revenue grew 15% year over year to $9.2 billion.
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Next-Generation Security ARR grew 32% year over year to $5.6 billion.
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Remaining performance obligation grew 24% year over year to $15.8 billion.
“Our strong execution in Q4 reflects a fundamental market shift in which customers understand that a fragmented defense is no defense at all against modern threats. They are partnering with us because our platforms are designed to work in concert, creating powerful operational synergies that deliver superior, near real-time outcomes and the efficiency our customers need,” said Nikesh Arora, chairman and CEO of Palo Alto Networks. “We exited fiscal year 2025 with an acceleration in RPO, and surpassed the $10 billion revenue run-rate milestone, positioning ourselves well for sustained growth ahead.”
“Our strong top-line results were complemented by continued operating efficiency and strong free cash flow generation, making us a ‘Rule-of-50’ company for the fifth consecutive year,” said Dipak Golechha, chief financial officer of Palo Alto Networks. “We are excited to carry this momentum into fiscal year 2026, where we will continue to execute against our profitable growth framework.”
I have been following PANW for quite some time now and they are really quite amazingly consistent. Overall revenue growth of the company in the mid teens and Next Gen ARR in the low 30’s. The ARR portion growth rate continues to slowly drop. Literally by 2-3% per quarter like clockwork. I guess I would rather see it not drop any but the law of large numbers almost makes sure it needs to do so.
For me, this is one of my biggest holdings and highest conviction stocks. It is hard to imagine that cyber security doesn’t remain a big and growing industry in our ever more complicated digital world. And Palo Alto Networks seems a safe bet to be a major player in that space.
Although, there were concerns when PANW announced buying Cyberarc due to its price. And I don’t know, maybe it was too expensive, but they bought a company that was growing faster (50% last quarter), and their products appear to fit nicely in the platformization theme they have been selling for some time. Most importantly, it is really hard to believe that they won’t increase Cyberarc’s sales as an improvement and addition to its present offerings through its much larger customer base.
So overall, more of the same, good growth, great cash flow and a new acquisition which should improve the growth after it closes. What’s not to like…
Here is a link to the earnings release: https://investors.paloaltonetworks.com/news-releases/news-release-details/palo-alto-networks-reports-fiscal-fourth-quarter-and-fiscal-9
and here is the presentation with much more detail on the platformization efforts: https://investors.paloaltonetworks.com/static-files/fa70bf3c-c9d7-4ac3-a73e-f20c2e29ad1f
Randy
Long PANW and Tickerguide