Palo Alto Networks Shares Drop Despite Strong Quarter, Cautious Profit Outlook

Overview

• Palo Alto Networks reported fiscal Q2 revenue of $2.59 billion, up 15% year over year, with net income rising 62% to $432 million.
• The company guided full-year revenue to $11.28 billion to $11.31 billion and projected diluted non-GAAP EPS of $3.65 to $3.70.
• For fiscal Q3, management forecast revenue of $2.941 billion to $2.945 billion with diluted non-GAAP EPS of $0.78 to $0.80.
• The stock fell 6.82% to $152.35 after the update, with the move framed as investors having priced in strong results.
• CEO Nikesh Arora highlighted accelerating platformization tied to AI and steady adoption of AI security, while analysts cited acquisition-related integration costs, rising Next-Gen Security ARR, and growing RPO as key factors for the outlook.