Palo Alto Networks Lifts FY26 Revenue Outlook as 2Q Profit Jumps

By Elias Schisgall

Palo Alto Networks lifted its full-year revenue outlook after recording a jump in second-quarter profit driven by continued demand for cybersecurity services.

The Santa Clara, Calif.-based company on Tuesday said it now expects full-year revenue to come in between $11.28 billion and $11.31 billion, up from a range of $10.5 billion to $10.54 billion.

In the fiscal second quarter, Palo Alto reported a profit of $432 million, or 61 cents a share, compared with a profit of $267.3 million, or 38 cents a share the prior year.

Stripping out certain one-time items, the company posted adjusted earnings of $1.03 a share. Analysts polled by FactSet were expecting 94 cents a share.

Revenue grew to $2.59 billion, up from $2.26 billion a year earlier. Analysts were expecting $2.58 billion.

"We saw continued strength in platformizations, a trend that is accelerating due to AI - customers are keen to both modernize and normalize their cybersecurity stack, aligning them to our approach," Chief Executive Officer Nikesh Arora said. "We also saw steady and strong adoption of AI security, which we expect will be a long term trend."

Palo Alto reported annual recurring revenue from its security services growing to $6.3 billion, beating Wall Street expectations of $6.13 billion.

Remaining performance obligations, which measures contracted revenue that is yet to be recognized on the financial statements, grew 23% to $16 billion.

In the current fiscal third quarter, the company projected adjusted earnings of between 78 cents and 80 cents a share, short of analysts' estimates of 92 cents a share, according to FactSet.

The company projected third quarter revenue of between $2.94 billion and $2.95 billion.

For the full fiscal year, the company lowered its adjusted earnings guidance to between $3.65 and $3.70 a share, down from a range of $3.80 to $3.90 a share. The updated outlook assumes about 63 million to 68 million more shares outstanding.

Palo Alto is projecting full-year security annual recurring revenue of between $8.52 billion and $8.62 billion, with remaining performance obligations of between $20.2 billion and $20.3 billion.

The release comes as Palo Alto Networks continues its spree of acquisitions, with the company saying before the bell that it agreed to buy the agentic endpoint security company Koi following its purchases of Chronosphere and CyberArk.

Shares fell 4.7% to $155.84 in after-hours trading.

Write to Elias Schisgall at elias.schisgall@wsj.com

(END) Dow Jones Newswires

February 17, 2026 16:59 ET (21:59 GMT)