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Palo Alto Networks posts stronger-than-expected free cash flow margins
Management said it expects its adjusted FCF margin to rise to about 38% in fiscal 2027 and remain on track for a 40% margin in fiscal 2028.
Palo Alto Networks reported better-than-expected fiscal fourth-quarter free cash flow, along with higher free cash flow margins, and management expects those margins to improve, according to Yahoo Finance. The outlet said Palo Alto Networks generated a trailing 12-month adjusted FCF margin of 38.4%, which topped both expectations and last year's 38.0%. Management also guided to a 38% adjusted FCF margin for fiscal 2027, which ends July 31, 2027, and it said it is still on track to deliver a 40% margin in fiscal 2028. Yahoo Finance added that analysts raised revenue expectations after the results, lifting the FY 2027 revenue forecast to $14.17 billion from $13.84 billion, an increase of 23.4% versus FY 2026. The same source said analysts introduced an FY 2028 revenue forecast of $16.19 billion, implying sales growth of about 41% over the next two years. The article also noted the stock closed at $333.26 on Sept. 4, down from before the Sept. 1 earnings release, and discussed an implied upside scenario tied to the company sustaining strong adjusted FCF margins.