Palo Alto Networks (PANW) · Software
Palo Alto Networks Q3 FY2026 earnings: summary, key numbers & outlook
Results filed 2 Jun 2026 · Quarter ended 30 Apr 2026
Press release ↗Investor relations ↗
Summaries and transcripts are machine-generated and can contain errors.
In brief
Palo Alto Networks reported fiscal Q3 2026 total revenue that grew 31% year over year to $3.0 billion, Next-Generation Security ARR that grew 60% year over year to $8.1 billion, and a GAAP net loss of $177 million, or ($0.22) per diluted share.
Palo Alto Networks grew total revenue 31% year over year to $3.0 billion in its fiscal third quarter, including $388 million from the newly acquired CyberArk and Chronosphere. Next-Generation Security ARR, its key subscription metric, rose 60% to $8.1 billion. Adjusted free cash flow was $910 million. Acquisition costs and amortization pushed it to a GAAP net loss of $177 million, while non-GAAP net income was $684 million, or $0.85 per diluted share.
For the fiscal fourth quarter, management expects revenue of $3.345 billion to $3.355 billion and non-GAAP earnings of $0.96 to $0.98 per share. For fiscal 2026 it expects revenue of $11.415 billion to $11.425 billion and an adjusted free cash flow margin of 37.5%. The tension is that the acquisitions lift growth and ARR but weigh on GAAP profit. The company must integrate them while working toward its 40% adjusted free cash flow margin goal for FY28.
Key numbers
- Total revenue · GAAP
- $3.0 billion
- Net loss · GAAP
- $177 million
- Diluted EPS · GAAP
- ($0.22)
- Non-GAAP diluted EPS · non-GAAP
- $0.85
- GAAP operating loss · GAAP
- $183 million
- Non-GAAP operating income · non-GAAP
- $814 million
- Net cash provided by operating activities · GAAP
- $871 million
- Adjusted free cash flow · non-GAAP
- $910 million
grew 31% year over year
compared with GAAP net income of $262 million a year ago
compared with $0.37 a year ago
compared with $0.80 a year ago
compared with GAAP operating income of $219 million a year ago
compared with $627 million a year ago
compared with $628 million a year ago
compared with $578 million a year ago
| Segment or metric | Value | Change |
|---|---|---|
| Next-Generation Security ARR | $8.1 billion | grew 60% year over year |
| Remaining performance obligation | $18.4 billion | grew 36% year over year |
| Revenue from CyberArk and Chronosphere | $388 million |
Where each number comes from
- Total revenue: “Total revenue for the fiscal third quarter 2026 grew 31% year over year to $3.0 billion. This includes $388 million from CyberArk and Chronosphere.”
- Net loss: “GAAP net loss for the fiscal third quarter 2026 was $177 million, or ($0.22) per diluted share, compared with GAAP net income of $262 million, or $0.37 per diluted share”
- Diluted EPS: “GAAP net loss for the fiscal third quarter 2026 was $177 million, or ($0.22) per diluted share, compared with GAAP net income of $262 million, or $0.37 per diluted share”
- Non-GAAP diluted EPS: “Non-GAAP net income for the fiscal third quarter 2026 was $684 million, or $0.85 per diluted share, compared with non-GAAP net income of $561 million, or $0.80 per diluted share”
- GAAP operating loss: “GAAP operating loss for the fiscal third quarter 2026 was $183 million, compared with GAAP operating income of $219 million, for the fiscal third quarter 2025.”
- Non-GAAP operating income: “Non-GAAP operating income for the fiscal third quarter 2026 was $814 million, compared with non-GAAP operating income of $627 million for the fiscal third quarter 2025.”
- Net cash provided by operating activities: “Net cash provided by operating activities for the fiscal third quarter 2026 was $871 million, compared with net cash provided by operating activities of $628 million”
- Adjusted free cash flow: “Adjusted free cash flow for fiscal third quarter 2026 was $910 million, compared with adjusted free cash flow of $578 million, for the fiscal third quarter 2025.”
- Next-Generation Security ARR: “Next-Generation Security ARR for the fiscal third quarter 2026 grew 60% year over year to $8.1 billion. This includes $1.6 billion in NGS ARR from CyberArk and Chronosphere.”
- Remaining performance obligation: “Remaining performance obligation grew 36% year over year to $18.4 billion. This includes $1.8 billion from CyberArk and Chronosphere.”
- Revenue from CyberArk and Chronosphere: “Total revenue for the fiscal third quarter 2026 grew 31% year over year to $3.0 billion. This includes $388 million from CyberArk and Chronosphere.”
Copied from the press release ↗ and other documents in the SEC filing ↗. A figure is published only if its sentence is in the filing.
| From the filing | Q3 FY2026 | vs year ago | vs last quarter |
|---|---|---|---|
| Revenue | $3.0B | +31.1% | +15.7% |
| Operating income | -$183.0M | — | — |
| Net income | -$177.0M | — | — |
| Diluted EPS | -$0.22 | — | — |
| Free cash flow | $788.0M | +40.7% | +105.2% |
| Gross margin | 67.6% | −5.4 pts | −6.0 pts |
| Operating margin | -6.1% | −15.7 pts | −21.4 pts |
Calculated by code from XBRL, not by the model.
Outlook
| Metric | Period | Outlook |
|---|---|---|
| Next-Generation Security ARR | fiscal fourth quarter 2026 | $8.90 billion to $8.95 billion |
| Remaining performance obligation | fiscal fourth quarter 2026 | $20.9 billion to $21.0 billion |
| Total revenue | fiscal fourth quarter 2026 | $3.345 billion to $3.355 billion |
| Diluted non-GAAP net income per share | fiscal fourth quarter 2026 | $0.96 to $0.98 |
| Total revenue | fiscal year 2026 | $11.415 billion to $11.425 billion |
| Non-GAAP operating margin | fiscal year 2026 | 28.9% to 29.2% |
| Diluted non-GAAP net income per share | fiscal year 2026 | $3.77 to $3.79 |
| Adjusted free cash flow margin | fiscal year 2026 | 37.5% |
| Next-Generation Security ARR | fiscal year 2026 | $8.90 billion to $8.95 billion |
Key takeaways
Revenue grew 31% with acquisition help
Total revenue grew 31% year over year to $3.0 billion, including $388 million from CyberArk and Chronosphere.
Next-Generation Security ARR reached $8.1 billion
NGS ARR grew 60% year over year, and $1.6 billion of it came from CyberArk and Chronosphere.
Acquisition costs drove a GAAP loss
GAAP operating loss was $183 million, versus non-GAAP operating income of $814 million. Acquisition-related costs were $198 million and amortization of acquired intangibles was $280 million.
Cash generation strengthened year over year
Adjusted free cash flow was $910 million versus $578 million a year earlier. Trailing 12-month adjusted free cash flow margin was 38.5%.
Fourth-quarter outlook implies continued 32% growth
Management guided Q4 revenue to $3.345 billion to $3.355 billion and non-GAAP EPS to $0.96 to $0.98. It reiterated a path to 40% adjusted free cash flow margin in FY28.
Charts
Fourth quarter worked out from the annual figure.
Data
| Q1 FY25 | $2.1B |
| Q2 FY25 | $2.3B |
| Q3 FY25 | $2.3B |
| Q4 FY25 | $2.5B * |
| Q1 FY26 | $2.5B |
| Q2 FY26 | $2.6B |
| Q3 FY26 | $3.0B |
| Q4 FY26 | $3.4B * |
Data
| Q1 FY25 | $0.49 |
| Q2 FY25 | $0.38 |
| Q3 FY25 | $0.37 |
| Q1 FY26 | $0.47 |
| Q2 FY26 | $0.61 |
| Q3 FY26 | -$0.22 |
Fourth-quarter EPS appears once the press release is read; filings report it only for the full year.
Data
| Q1 FY25 | 13.4% |
| Q2 FY25 | 10.7% |
| Q3 FY25 | 9.6% |
| Q4 FY25 | 19.6% |
| Q1 FY26 | 12.5% |
| Q2 FY26 | 15.3% |
| Q3 FY26 | -6.1% |
| Q4 FY26 | 5.0% |
Data
| Q1 FY25 | $1.5B |
| Q2 FY25 | $509.0M |
| Q3 FY25 | $560.0M |
| Q4 FY25 | $934.0M |
| Q1 FY26 | $1.7B |
| Q2 FY26 | $384.0M |
| Q3 FY26 | $788.0M |
| Q4 FY26 | $1.3B |
Operating cash flow minus capital expenditure, from cash flow statements.
Questions
What were Palo Alto Networks' fiscal Q3 2026 revenue and growth?
Total revenue was $3.0 billion, up 31% year over year, including $388 million from CyberArk and Chronosphere.
Why did Palo Alto Networks report a GAAP loss?
GAAP net loss was $177 million, or ($0.22) per diluted share. Non-GAAP adjustments included $517 million of share-based compensation-related charges, $198 million of acquisition-related costs and $280 million of intangible amortization. Non-GAAP net income was $684 million, or $0.85 per share.
What is the company guiding for the fiscal fourth quarter?
It expects revenue of $3.345 billion to $3.355 billion, non-GAAP EPS of $0.96 to $0.98, and Next-Generation Security ARR of $8.90 billion to $8.95 billion.
What is the full-year fiscal 2026 outlook?
Management expects revenue of $11.415 billion to $11.425 billion, up 24%. It also expects non-GAAP operating margin of 28.9% to 29.2%, non-GAAP EPS of $3.77 to $3.79 and an adjusted free cash flow margin of 37.5%.
How is cash flow and profitability trending?
Operating cash flow was $871 million and adjusted free cash flow was $910 million, up from $578 million. Trailing 12-month adjusted free cash flow margin was 38.5%, and management says it is on track for 40% in FY28.
Documents
SEC filing