Palo Alto Networks Inc (PANW) Q1 2026 Earnings Report

- Revenue: $2.470B in Q1’26, up 16% YoY; Q4’25 comparison not disclosed here but the quarterly trajectory remains positive.
- RPO: $15.5B, up 24% YoY; near-term RPO (current RPO) at $6.9B, 16% YoY growth; average new contract duration ~3 years.
- NGS ARR: $5.85B, up 29% YoY; net new ARR growth >20% YoY excluding QRadar adjustments; 170 customers with NGS ARR >$5M, 50 with >$10M, each growing ~50% YoY.
- Revenue mix and product momentum: Product revenue +23% YoY; software-form-factor product revenue accounts for about 44% of trailing 12-month product revenue; software firewall/SASE/XSIAM contributions remain broad-based.
- Gross margins: Overall gross margin 76.9%; Product gross margin 80.2% (up 50 bps YoY); Services gross margin 76.2% (up 70 bps QoQ).
- Operating profitability: Operating margin 30.2% (up 140 bps YoY); Diluted non-GAAP EPS $0.93 (above the high end of guidance).
- Cash flow and liquidity: Adjusted free cash flow $1.7B, up 17% YoY; cash and cash equivalents ending Q1 over $10B; net cash position of approximately -$2.72B in net debt terms (net cash).
- Guidance highlights: Q2’26 NGS ARR $6.11B–$6.14B; Revenue $2.57B–$2.59B; Diluted non-GAAP EPS $0.93–$0.95. FY26 NGS ARR $7.0B–$7.1B; Revenue $10.50B–$10.54B; Operating margin 29.5%–30%; Adjusted FCF margin 38%–39%; maintenance of 40%+ FCF margin by FY28 (inclusive of CyberArk/Chronosphere).
- Capital allocation: No share repurchases in Q1; $1B remaining buyback authorization through Dec 2026.
- Acquisitions and integration: CyberArk integration on track to close in fiscal Q3; Chronosphere acquisition announced, expected to close in H2 FY26; Chronosphere to remain largely standalone post-close to balance integration timelines.