# Palo Alto Networks (PANW) Q3 FY2026 earnings

Results filed 2026-06-02 for the quarter ended 2026-04-30. Source page: https://earnings.opennash.com/companies/panw/2026-q3/
Press release and exhibits: https://www.sec.gov/Archives/edgar/data/1327567/000132756726000012/0001327567-26-000012-index.htm
> 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

| Metric | Value | Change | Basis |
| --- | --- | --- | --- |
| Total revenue | $3.0 billion | grew 31% year over year | GAAP |
| Net loss | $177 million | compared with GAAP net income of $262 million a year ago | GAAP |
| Diluted EPS | ($0.22) | compared with $0.37 a year ago | GAAP |
| Non-GAAP diluted EPS | $0.85 | compared with $0.80 a year ago | non-GAAP |
| GAAP operating loss | $183 million | compared with GAAP operating income of $219 million a year ago | GAAP |
| Non-GAAP operating income | $814 million | compared with $627 million a year ago | non-GAAP |
| Net cash provided by operating activities | $871 million | compared with $628 million a year ago | GAAP |
| Adjusted free cash flow | $910 million | compared with $578 million a year ago | non-GAAP |
| Trailing 12-month adjusted free cash flow margin | 38.5% | up 430 basis points year over year | non-GAAP |

## Segments and operating metrics

| Name | 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 |  |

## 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

1. **Revenue grew 31% with acquisition help** Total revenue grew 31% year over year to $3.0 billion, including $388 million from CyberArk and Chronosphere.
2. **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.
3. **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.
4. **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%.
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.

## 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.