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Palo Alto Networks Tops Q3 Estimates as Acquisitions Lift Revenue and Backlog

The stronger quarter reflects rising enterprise demand for AI-era identity and security, with integration costs and the durability of bookings still unresolved.

Overview

  • The company, which reported results Tuesday night, posted adjusted EPS of $0.85 versus $0.80 expected and revenue of $3.0 billion, a 31% year-over-year increase that beat consensus.
  • Organic revenue excluding acquisitions rose 14%, while Palo Alto said accelerating organic bookings helped drive the beat alongside contributions from recent deals.
  • CyberArk, which closed in February for about $25 billion, and the Chronosphere purchase materially lifted headline growth as management absorbs multiple acquisitions.
  • Order backlog climbed 36% to $18.4 billion and Next-Generation Security annual recurring revenue expanded about 60% year-over-year, giving the company contracted revenue visibility.
  • Management raised fourth-quarter and full-year guidance, analysts boosted price targets, and shares spiked over 10% after hours then pared gains as investors weighed integration costs and whether higher bookings will convert into sustained wins.