Palo Alto Networks beat fiscal fourth-quarter estimates as demand for AI-driven cybersecurity tools accelerates, and it announced the acquisition of AI agent platform Console. The company posted $3.41 billion in revenue, up 34% year over year, and guided above Wall Street's expectations for the current quarter and fiscal year.
Palo Alto Networks reported adjusted earnings of $1.02 per share, above the 98 cents analysts expected. Revenue reached $3.41 billion for the quarter, up 34% from $2.54 billion a year earlier, topping the $3.35 billion analysts had expected. However, the company reported a net loss of $282 million, or 35 cents per share, compared with net income of $254 million a year ago.
Shares added about 2% in extended trading, following a 5% drop during regular trading. Even so, Palo Alto Networks shares have nearly doubled this year as agentic AI tools drive enterprises toward newer threat-detection products in the stock market.
AI threats fuel next-gen growth
CEO Nikesh Arora told CNBC that accelerating AI-driven attacks are forcing customers to build faster defenses. According to CNBC: "This is a long-term tailwind", he said. Palo Alto has held more than 2,000 customer briefings, up from roughly 1,200 last quarter, since Anthropic's Mythos model launched.
Separately, the company's Next-Generation Security annual recurring revenue reached $9.1 billion in the quarter, growing 63% year over year. Meanwhile, remaining performance obligations rose 34% to $21.2 billion, beating consensus estimates of $20.91 billion.
Console deal deepens AI push
Alongside earnings, Palo Alto announced the acquisition of Console, an AI-native platform built around natural-language workflows, with financial terms not disclosed. Console will fold into Palo Alto's Cortex security operations platform, powering alert investigation, threat prioritization and automated remediation. The deal extends an acquisition run that already includes a $25 billion purchase of CyberArk and nearly $3.4 billion for Chronosphere, Palo Alto's largest acquisitions to date.
Upbeat guidance
For the fiscal first quarter, Palo Alto guided for $3.30 billion to $3.31 billion in revenue, above the $3.22 billion analysts expected. For fiscal 2027, the company guided for total revenue of $14.10 billion to $14.20 billion, exceeding the $13.84 billion Wall Street anticipated. The Console deal and Palo Alto's other 2026 acquisitions ladder up to the company's target of $20 billion in Next-Generation Security annual recurring revenue by fiscal 2030.
Palo Alto isn't the only beneficiary of the AI security race: CrowdStrike and Okta also surged last week on upbeat earnings and guidance as enterprises keep spending on cyber tools.
Sources: CNBC, MarketWatch, Crypto Briefing
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