Total Revenue
$2.54 billion, grew 16% year-over-year. Growth driven by product revenue (19%) and services revenue (15%).
Product Revenue
Grew 19% year-over-year, driven by growth in software form factors. 56% of product revenue was from software form factors.
Services Revenue
Grew 15% year-over-year. Subscription revenue grew 17%, and support revenue rose 11%.
Remaining Performance Obligation (RPO)
Grew 24% year-over-year to $15.8 billion. Current RPO grew 17% year-over-year to $7.0 billion.
Next-Generation Security ARR
$5.58 billion, grew 32% year-over-year. Net new ARR for the quarter was up 12% year-over-year. Growth driven by software firewalls, SASE, and XSIAM.
Operating Margin
Expanded by 340 basis points, achieving over 30% for the first time in the company's history.
Free Cash Flow Margin
38% for the third consecutive year. Visibility to go even higher in the future.
AI ARR
Approximately $545 million, up over 2.5x year-over-year.
Product Gross Margin
76.8%. Fiscal year 2026 expected to increase to high 70s or low 80s.
PANW
$186.955+Infinity%1D
Analyst Views on PANW
Wall Street analysts forecast PANW stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for PANW is 234.31 USD with a low forecast of 190.00 USD and a high forecast of 255.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
34 Analyst Rating
Wall Street analysts forecast PANW stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for PANW is 234.31 USD with a low forecast of 190.00 USD and a high forecast of 255.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
30 Buy
4 Hold
0 Sell
Strong Buy
Current: 191.690
Low
190.00
Averages
234.31
High
255.00
Current: 191.690
Low
190.00
Averages
234.31
High
255.00
Jefferies
Buy
to
Hold
downgrade
$480
2025-11-30
Reason
Jefferies
Price Target
$480
2025-11-30
downgrade
Buy
to
Hold
Reason
Jefferies downgraded CyberArk (CYBR) to Hold from Buy with an unchanged price target of $480. The firm cites the pending takeover by Palo Alto Networks (PANW) for the downgrade.
HSBC
Hold -> Reduce
downgrade
$157
2025-11-21
Reason
HSBC
Price Target
$157
2025-11-21
downgrade
Hold -> Reduce
Reason
HSBC last night downgraded Palo Alto Networks to Reduce from Hold with an unchanged price target of $157. The firm views the company's fiscal Q1 the print as "sufficient, not transformational." The stock's risk/reward is turning negative with limited potential for upward estimate revisions in fiscal 2026 and 2027, the analyst tells investors in a research note. HSBC says that with Palo Alto's decelerating revenue growth, it sees an increased opportunity of a negative share re-rating.
Scotiabank
Patrick Colville
Sector Perform
downgrade
$90 -> $76
2025-11-21
Reason
Scotiabank
Patrick Colville
Price Target
$90 -> $76
2025-11-21
downgrade
Sector Perform
Reason
Scotiabank analyst Patrick Colville lowered the firm's price target on Elastic (ESTC) to $76 from $90 and keeps a Sector Perform rating on the shares after fiscal Q2 top-line results the firm calls "a tad disappointing versus guidance and cloud peers." While the firm acknowledges Elastic's potential in security and observability, it is concerned that Palo Alto Networks' (PANW) acquisition of Chronosphere could result in a more competitive environment in capturing the opportunity from Splunk, New Relic and Sumo Logic displacement, the analyst tells investors.
UBS
Roger Boyd
Neutral
downgrade
$230 -> $220
2025-11-20
Reason
UBS
Roger Boyd
Price Target
$230 -> $220
2025-11-20
downgrade
Neutral
Reason
UBS analyst Roger Boyd lowered the firm's price target on Palo Alto Networks to $220 from $230 and keeps a Neutral rating on the shares. Palo Alto's Q1 results were solid, with strong annual recurring revenue, RPO, and free cash flow offset slightly by softer services revenue and a mixed FY26 adjustment, the analyst tells investors in a research note. Guidance still implies a second half reacceleration in services, and the planned Chronosphere acquisition, along with CyberArk and new features, supports a meaningfully larger long-term next-generation security ARR target of $20B for FY30, the firm adds.
About PANW
Palo Alto Networks, Inc. provides comprehensive artificial intelligence (AI)-powered security solutions across network, cloud, security operations and AI. The Company focuses on four areas: Network Security, Cloud Security, Security Operations and Threat Intelligence and Advisory Services (Unit 42). Its network security platform comprises ML-powered firewalls, AI Runtime Security, and a Secure Access Service Edge (SASE) framework, which includes Prisma Access, Prisma SD-WAN, and Prisma Access Browser to secure remote workforces and branch offices. Its Cloud security is delivered via Prisma Cloud, a Code to Cloud platform that protects applications, data, GenAI environments, and the cloud-native stack throughout the development lifecycle. Its Unit 42 division provides intelligence-led consulting, incident response, managed detection and response, and threat hunting services. Its Prisma AIRS is an AI security platform which secures applications, agents, models and data.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
