Palo Alto Networks Posts Strong Q3 Beats and Sees AI Security Demand Drive Bookings

The results show durable subscription growth that supports forward revenue while acquisition costs pushed GAAP into a loss.

Overview

Palo Alto reported fiscal third-quarter results in early June with $3.0 billion in revenue and $0.85 earnings per share, both above analyst estimates.
The company said Next‑Generation Security annual recurring revenue rose about 60% to more than $8 billion and remaining performance obligations grew 36% to $18.4 billion, signaling multi‑quarter revenue visibility.
Palo Alto recorded a GAAP net loss of $177 million tied to acquisition‑related charges from recent deals including CyberArk and Chronosphere while non‑GAAP net income increased to $684 million.
Management and analysts linked faster bookings to rising demand for tools that protect AI infrastructure, and Wedbush raised its price target to $340 and added PANW to its 'AI 30' list.
Investors have pushed the stock higher after a large May rally and analysts raised targets broadly, but the company must show it can integrate acquisitions and sustain high ARR growth to meet raised expectations.