Q4 2026 Palo Alto Networks Inc Earnings Call Transcript
Key Points
- Palo Alto Networks Inc (PANW) delivered a record fiscal Q4 2026, exceeding guidance across all financial metrics with bookings momentum accelerating for the second consecutive quarter.
- The company achieved record RPO surpassing $20 billion for the first time, closing the year at $21.2 billion, representing 34% growth year-over-year.
- NGS ARR reached $9.1 billion, up 63%, with nearly $1 billion in net new NGS ARR added in Q4 alone, a milestone that almost doubled year-on-year.
- Platformization adoption hit a record with approximately 220 net new platformizations in Q4, more than double the volume from two years ago, and the platformized cohort's NRR exceeded 120%.
- Prisma AIRS surpassed $100 million in ARR within four quarters of general availability, marking the fastest scaling product in the company's history, while XSIAM ARR grew 70% to over $700 million.
- The CyberArk (Idira) and Chronosphere acquisitions are exceeding expectations, with Idira revenue growing 21% pro forma and observability ARR more than doubling to surpass $500 million since the Chronosphere acquisition.
- Total gross margin in Q4 declined 100 basis points year-over-year to 74.8%, and full-year gross margin was down 60 basis points, reflecting a mix shift towards faster-growing SaaS offerings.
- The company expects rising commodity costs, particularly for memory and storage, to persist in the hardware business, which could pressure margins despite hardware being only ~10% of total revenue.
- Fiscal 2027 guidance for NGS ARR growth of 22-23% represents a significant deceleration from the 63% growth in fiscal 2026, indicating a normalization of growth rates.
- The fiscal 2027 outlook assumes the tail end of a nine-figure benefit from a large LLM customer migrating to Chronosphere will last only through Q1, with less net new ARR contribution than in Q4, impacting seasonality.
- The company anticipates higher cost of goods sold in fiscal 2027, with cloud hosting costs expected to grow faster than total revenue due to the increasing mix of cloud and SaaS offerings.
- While the company exceeded guidance, the Q1 fiscal 2027 EPS guidance of $0.96-$0.98 is below the Q4 fiscal 2026 EPS of $1.02, suggesting potential near-term margin pressure or seasonality.
Good day, everyone, and welcome to Palo Alto Networks' Fiscal Fourth Quarter 2026 Earnings Conference Call. I am Hamza Fodderwala, Senior Vice President of Investor Relations and Strategic Finance. Please note that this call is being recorded today, Tuesday, September 1, 2026, at 1:30 PM Pacific Time.
With me on today's call to discuss our fiscal fourth quarter results are Nikesh Arora, our Chairman and Chief Executive Officer; and Dipak Golechha, our Chief Financial Officer. You can find the press release and other information to supplement today's discussion on our website at investors.paloaltonetworks.com. While there, please click on the link for quarterly results to find the Q4 '26 supplemental financial information and Q4 '26 earnings presentation.
During the course of today's call, we will be making forward-looking statements and projections regarding the company's business operations and financial performance as well as the company's recent acquisitions. These statements
| Access to All Earning Calls and Stock Analysis | |
| 30-Year Financial on one screen | |
| All-in-one Stock Screener with unlimited filters | |
| Customizable Stock Dashboard | |
| Real Time Insider Trading Transactions | |
| 8,000+ Institutional investors’ 13F holdings | |
| Powerful Excel Add-in and Google sheets Add-on | |
| All data downloadable | |
| Quick customer support | |
| And much more... |
Trustpilot
We'd love to learn more about your experiences on GuruFocus.com and how we can improve!
Take Survey
