Palo Alto Networks FY2026: revenue up 24.5%, GAAP profit down 72.9%
Palo Alto Networks closed FY2026 with $11.48 billion of revenue, up 24.5% year over year, and an adjusted free cash flow margin of 38.4%, yet GAAP net income fell to $307 million and the next-quarter revenue guide sits about 2.0% below consensus. This is a fast-growing, cash-rich business whose reported profit is being squeezed by share-based compensation and acquisition accounting. Read the GAAP and non-GAAP lines side by side — the gap between them is the story.
1 · Expected vs. Actual
Free preview belowGAAP diluted EPS was $0.40 for the year and $(0.35) in the fourth quarter, against non-GAAP EPS of $3.84 and $1.02 — the same business, two very different pictures. The exclusions driving the gap were $1.71 billion of share-based compensation, $638 million of amortization of acquired intangibles, $295 million of acquisition-related costs and a $562 million convertible-note fair-value swing. GAAP net income of $307 million is a 2.7% net margin, versus $2.93 billion of non-GAAP net income.
Full-year revenue was $11.48 billion, up 24.5% from $9.22 billion, and growth accelerated through the year: $2.47 billion, $2.59 billion, $3.00 billion, then $3.41 billion in the quarter ended July 31, 2026. Subscription and support supplied $9.20 billion of the year's revenue and $2.67 billion of the fourth quarter, while product was $2.28 billion and $738 million. The fourth quarter was up 34.5% year over year against $2.54 billion.
Fiscal first quarter 2027 revenue is guided to $3.300–$3.310 billion, up 33.0%–34.0% year over year, with non-GAAP diluted EPS of $0.96–$0.98. For fiscal 2027 the plan is $14.10–$14.20 billion of revenue, a 29.5% non-GAAP operating margin, $4.16–$4.19 of non-GAAP EPS and a 38.0% adjusted free cash flow margin. The Q1 midpoint sits about 2.0% below the $3.37 billion consensus revenue estimate, and the guided fiscal 2027 growth of 23.0%–24.0% is slower than the 24.5% just delivered.
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Figures on this page come from the company's original SEC filings. The analysis is generated automatically and checked against validation rules, but may still contain errors or omissions. Not investment advice. · Generated 2026-09-17
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