Palo Alto Networks’ quarterly profit jumps as AI security demand accelerates

Investing.com -- Palo Alto Networks reported a strong finish to its fiscal year on Tuesday, with growing demand for cybersecurity products helping the company deliver double-digit revenue growth and higher adjusted profit as businesses increase spending to secure AI-driven operations.

The cybersecurity company said fiscal fourth-quarter revenue rose 34% from a year earlier to $3.41 billion, while adjusted profit increased to $853 million, or $1.02 per diluted share, from $673 million, or $0.95 per share, a year earlier. For the full fiscal year, revenue rose to $11.48 billion from $9.22 billion, while adjusted profit increased to $2.93 billion, or $3.84 per diluted share, from $2.35 billion, or $3.34 per share a year earlier.

The results highlight continued momentum across Palo Alto Networks' security platforms, with Chief Executive Nikesh Arora saying advances in artificial intelligence are pushing cybersecurity higher on corporate technology spending priorities. The company said it added nearly $1 billion in net new next-generation security annual recurring revenue during the quarter, supporting its longer-term ambition to expand the business substantially by the end of the decade.

Demand was particularly strong across its Network & AI Security, Cortex and Idira platforms. Next-generation security annual recurring revenue rose 63% year over year, while remaining performance obligations also increased 34%, pointing to continued strength in contracted demand.

The company is also expanding its AI capabilities through acquisitions. It said it had acquired Console, an AI-native platform designed to enable agentic workflows across enterprise operations, which it expects will broaden the role of its Cortex platform as companies increasingly deploy AI agents.

Looking ahead, Palo Alto Networks expects revenue growth to remain strong in fiscal 2027, while forecasting continued expansion in its next-generation security business. Management also reiterated its focus on improving profitability and cash generation, as it seeks to capitalize on rising cybersecurity requirements stemming from the rapid adoption of AI.

You May Also Be Interested In

• Lutnick Says 'we Trust Anthropic' - Axios
• Canada jobs fall sharply in August as labour market loses summer momentum
• Palo Alto Networks (PANW) PT Raised to $420 at DA Davidson on Strong Q4 Upside