Palo Alto Networks operates in the global cybersecurity industry, which is characterized by rapid technological change, evolving threats, and a shift toward AI-powered solutions. The industry is highly competitive, with competition based on brand recognition, product quality, price, and innovation. The company's strategy centers on platformization, consolidating disparate point products into integrated platforms to simplify customer security architectures. The company is a global artificial intelligence cybersecurity provider, with a vision of a world where each day is safer and more secure than the one before. The company's platforms and services help secure enterprise users, networks, clouds, endpoints, AI apps and agents, and identities by delivering comprehensive cybersecurity backed by AI and automation, and provide real-time visibility and monitoring across cloud infrastructure, applications and AI workloads.

The company faces competition from a range of vendors, including next-generation firewall and security analytics providers, as well as larger networking and security companies. The company's competitive advantages include its platformization strategy, which combines various products and services into a tightly integrated architecture for more secure, faster, and cost-effective outcomes. The company also emphasizes its AI-powered innovation, with a focus on enhancing its integrated platforms and developing new software and hardware capabilities. The company's mission is to be the cybersecurity partner of choice, protecting our digital way of life.

The company generates revenue through the sale of products and subscriptions and support. Product revenue includes hardware and software NGFWs, while subscription and support revenue includes cloud-delivered security services, AI-powered security platforms, and customer support. The business model is increasingly recurring, with a focus on annual recurring revenue and remaining performance obligations. The company's platformization strategy combines various products and services into a tightly integrated architecture, and it sells through a global network of channel partners and directly to end-customers.

The Network & AI Security platform includes SASE, Next-Generation Firewalls, Cloud-Delivered Security Services, Prisma AIRS, and Strata Cloud Manager. Prisma Access, combined with Prisma SD-WAN, provides a comprehensive AI-powered SASE solution. The ML-Powered NGFWs secure on-premises environments, and software NGFWs secure virtual and cloud networks. CDSS includes Advanced Threat Prevention, Advanced WildFire, Advanced URL Filtering, Advanced DNS Security, Device Security, Quantum Security, Next-Gen Trust Protection, GlobalProtect, Prisma Access Agent, Enterprise DLP, SaaS Security, and AI Access Security. Prisma AIRS is a comprehensive AI security platform designed to help organizations discover, assess, and protect AI agents, applications, models and data across the AI lifecycle. Strata Cloud Manager is an AI-powered unified network security management and operations solution.

The Cortex platform includes Security Operations, Cloud Security, and Observability. Security Operations includes Cortex XSIAM, Cortex XDR, Cortex XSOAR, Cortex Xpanse, and Koi Agentic Endpoint Security. Cortex Cloud is a comprehensive Cloud Native Application Protection Platform combined with Cloud Detection and Response. Chronosphere is a next-generation observability platform that delivers real-time visibility and monitoring across cloud-native infrastructure, applications, and AI workloads. The Idira platform is a next-generation identity security platform designed to secure human, agentic, and machine identities, with modules including Privileged Access Management, Identity and Access Management, Endpoint Privilege Manager, Identity Governance, Workforce Password Management, Vendor Privileged Access, Secrets Management, Secrets Hub, Credential Providers, and Secure AI Agents. Unit 42 brings together threat research, incident response, and security consulting.

During fiscal 2026, the company completed several acquisitions, including Chronosphere, Inc. in January 2026, CyberArk Software Ltd. in February 2026, Koi Security Ltd. in April 2026, Portkey Inc. in May 2026, Embrace Mobile Inc. in July 2026, and Console Systems Inc. in July 2026. The company also launched new offerings, including PAN-OS 12.1 Orion, Prisma AIRS 2.0, NGTS, and Prisma AIRS 3.0. In April 2026, the company launched a new suite of Unit 42 Frontier AI Defense services. The company also issued $2.0 billion aggregate principal amount of 0.25% Convertible Senior Notes due 2030 in February 2026.

Total revenue for fiscal 2026 was $10.348 billion, compared to $9.043 billion in fiscal 2025 and $8.027 billion in fiscal 2024. Net income for fiscal 2026 was $3.102 billion, compared to $2.851 billion in fiscal 2025 and $2.587 billion in fiscal 2024. The company's revenue growth was driven by continued adoption of its platforms and services, with subscription and support revenue representing a significant portion of total revenue. The company's operating margin improved, and it generated strong cash flows from operations.

A key growth vector is the expansion of its AI-powered security platforms, including Prisma AIRS for AI security and Cortex XSIAM for AI-powered security operations. The company plans to continue to significantly invest in its research and development efforts as it evolves and extends the capabilities of its portfolio. The company also sees growth opportunities in identity security with its Idira platform, which unifies identity access management, privilege access management, and identity governance and administration. The company's platformization strategy is designed to help customers consolidate disparate point products, which is expected to drive further adoption.

Another growth vector is the expansion of its observability capabilities through the Chronosphere platform, which is purpose-built to handle the massive data volumes of the AI era. The company also sees growth in its cloud security offerings, with Cortex Cloud delivering comprehensive security across the cloud application development lifecycle. The company's strategic partnerships and acquisitions are expected to accelerate its strategy and enable further investment in key priority areas. The company's global presence is expected to continue to expand.

The company's cost structure is evolving with a focus on AI-powered innovation and platformization. The company expects to continue to invest in research and development, sales, and marketing to support its growth. The company's gross margin is influenced by the mix of product and subscription and support revenue. The company's operating expenses include significant share-based compensation expense. The company's profitability is expected to improve as it scales its platforms.

The company's operational outlook includes continued investment in its sales force, with expectations regarding growth in sales headcount. The company also plans to continue to expand its global presence. The company's technology infrastructure investments are focused on supporting its cloud-delivered services and AI-powered platforms. The company's headcount strategy is aligned with its growth plans, and it expects to continue to hire employees to support its research and development, sales, and marketing efforts.

The company's capital allocation priorities include investing in research and development, with plans to continue to significantly invest in its research and development efforts. The company also allocates capital to acquisitions, as evidenced by its recent acquisitions. The company has a share repurchase program, and it repurchased shares during fiscal 2026. The company does not pay a dividend.

The company faces headwinds from worldwide economic and geopolitical conditions, including hostilities in Israel and the surrounding regions, inflation, tariff rates, interest rate levels, public or administration policies, trade regulations, trade policy, growth rates and other conditions. These factors could affect the company's operating and financial results and performance. The company also faces risks related to the manufacture, delivery and cost of certain of its products.

The company faces execution risks related to its ability to successfully acquire and integrate companies and assets, including its acquisition of CyberArk Software Ltd. The company also faces risks related to the expanded scope of its competitors as a result of entering into new product and service categories. The company's expectations regarding the benefits and synergies from its acquisitions may not be realized.

Management's message emphasizes the company's vision of a world where each day is safer and more secure than the one before, and its mission to be the cybersecurity partner of choice. The key themes include the platformization strategy, which combines various products and services into a tightly integrated architecture for more secure, faster, and cost-effective outcomes. Management highlights the company's AI-powered innovation, with a focus on enhancing its integrated platforms and developing new software and hardware capabilities. The strategic priorities for the period ahead include continuing to invest in research and development, expanding the company's platforms, and executing on its acquisition strategy. Management also emphasizes the importance of its employees and sales force, with expectations regarding growth in sales headcount. The company's forward-looking statements include expectations regarding annual recurring revenue and remaining performance obligations, and expectations regarding the benefits and synergies from its acquisition of CyberArk Software Ltd.

Total revenue for fiscal 2026 was $10.348 billion ², compared to $9.043 billion ³ in fiscal 2025 and $8.027 billion ⁴ in fiscal 2024. Net income for fiscal 2026 was $3.102 billion ⁵, compared to $2.851 billion ⁶ in fiscal 2025 and $2.587 billion ⁷ in fiscal 2024. Diluted net income per share for fiscal 2026 was $3.79 ⁸, compared to $3.49 ⁹ in fiscal 2025 and $3.18 ¹⁰ in fiscal 2024. Operating income for fiscal 2026 was $1.902 billion ¹¹, compared to $1.632 billion ¹² in fiscal 2025. The company's gross margin for fiscal 2026 was 74.5% ¹³, compared to 74.3% ¹⁴ in fiscal 2025. Cash flows from operations for fiscal 2026 were $4.123 billion ¹⁵, compared to $3.682 billion ¹⁶ in fiscal 2025. Free cash flow for fiscal 2026 was $3.789 billion ¹⁷, compared to $3.365 billion ¹⁸ in fiscal 2025. As of July 31, 2026, the company had cash, cash equivalents, and investments of $8.314 billion ¹⁹. The company's total debt as of July 31, 2026 was $2.0 billion ²⁰ in convertible senior notes. The company's product revenue for fiscal 2026 was $1.789 billion ²¹, and subscription and support revenue was $8.559 billion ²². The company's revenue from the Americas was $6.442 billion ²³, from EMEA was $2.389 billion ²⁴, and from Asia Pacific was $1.517 billion ²⁵ in fiscal 2026.

The company's business is subject to risks related to its acquisition and integration of companies, including the acquisition of CyberArk Software Ltd., which may not achieve the expected benefits and synergies. The company faces risks from worldwide economic and geopolitical conditions, including hostilities in Israel and the surrounding regions, which could affect its operations and financial results. The company's revenue is concentrated among a limited number of distributors, with four distributors accounting for a significant portion of accounts receivable. The company's business is highly competitive, and it faces competition from larger networking and security companies, which could impact its market share and pricing. The company's reliance on third-party manufacturers for its hardware products exposes it to supply chain risks, including potential delays or increased costs. The company's convertible senior notes due 2030, with an aggregate principal amount of $2.0 billion ¹, could dilute existing shareholders upon conversion. The company's international operations expose it to regulatory and trade policy risks, including tariffs and trade regulations.