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Palo Alto Networks sees accelerating growth and raises guidance
Fiscal Q4 revenue rose to $3.41 billion, up 34% year over year, and remaining performance obligation increased 34% as AI-driven security demand expands.
Palo Alto Networks reported accelerating fiscal Q4 results, with revenue rising to $3.41 billion, up 34% year over year and ahead of expectations. The company said momentum is building as its platformization strategy gains traction and AI drives demand for security modernization.
According to MarketBeat Ratings, Palo Alto Networks also raised its guidance. Analysts highlighted that the company is trading at elevated valuation levels, but the setup is supported by the reported acceleration, including 220 net new platform subscribers and a 63% increase in Next Generation Solutions annual recurring revenue.
MarketBeat Ratings added that platformization strength was reflected across segments, with the smaller product segment up 29% and the larger subscription segment up 36%. The company reported a 34% increase in remaining performance obligation and a 120% net retention rate, which it flagged as indicators of sustained strength going into future quarters.
On margins, Palo Alto Networks faced expected pressure tied to its platformization transition, but MarketBeat Ratings said the margin impact was less than expected, aided in part by unexpected revenue strength. CEO Nikesh Arora said a large amount of cybersecurity infrastructure is not yet ready for AI, framing the demand trend around modernization and expansion of existing security networks.