Palo Alto Networks (PANW) Stock Beats Earnings as Revenue Jumps 31%

TLDR

• Palo Alto Networks posted Q3 adjusted EPS of $0.85, beating the $0.80 consensus estimate.
• Revenue hit $3 billion, up 31% year-over-year, topping expectations of $2.94 billion.
• The company’s backlog grew 36% to $18.4 billion, also ahead of analyst forecasts.
• PANW rose over 10% in after-hours trading before pulling back as investors noted the beat was partly acquisition-driven.
• Several analysts raised price targets, with Evercore ISI going to $375 and Stifel moving to $330.

Palo Alto Networks (PANW) reported third-quarter fiscal 2026 results on Tuesday that beat on every major metric.

$PANW (Palo Alto Networks) #earnings are out: pic.twitter.com/abtdD9YLsh

— The Earnings Correspondent (@earnings_guy) June 2, 2026

Adjusted earnings per share came in at $0.85, above the Wall Street consensus of $0.80 and up from $0.80 in the same quarter last year. Revenue reached $3 billion, ahead of the $2.94 billion estimate.

The stock jumped more than 10% in after-hours trading Tuesday night. By Wednesday premarket, it had given back most of those gains, trading down about 4.8%. The stock was recently near $297.18, just below its 52-week high of $302.95.

Palo Alto Networks, Inc., PANW

Revenue grew 31% year-over-year. Organic sales, excluding acquisitions, grew 14%.

The company’s backlog rose 36% to $18.4 billion, beating analyst consensus there too. Next-Generation Security annual recurring revenue grew 60% year-over-year.

CEO Nikesh Arora credited the beat to “an acceleration in organic bookings momentum, the sustained tailwinds from our platformization strategy, and surging cybersecurity needs as AI transitions from experimental stages to enterprise-wide production.”

Acquisitions Drive Growth

The gap between headline and organic growth reflects several acquisitions being absorbed at once. The biggest is identity security firm CyberArk, which Palo Alto acquired in a cash-and-stock deal that closed in February and valued CyberArk at roughly $25 billion.

Product revenue grew 31%, driven by firewall bookings, XSIAM, AI, and SASE offerings, as well as contributions from CyberArk and the Chronosphere acquisition.

Management raised Q4 fiscal 2026 guidance by more than the amount of the beat. They also said both organic and inorganic expectations for Q4 increased beyond the beat amount, though no explicit organic/inorganic breakdown was provided.

Analysts Raise Targets

Multiple analysts lifted their price targets following the results.

Evercore ISI raised its target to $375 from $320. Cantor Fitzgerald went to $340 from $285. Wells Fargo moved to $325 from $285, and Citizens raised to $320 from $250 with a Market Outperform rating. Stifel lifted its target to $330 from $275, maintaining a Buy rating, citing strong execution across both organic and acquisition-driven growth.

The CyberArk deal adds identity security software to Palo Alto’s platform. AI agents — software that uses AI models to handle complex tasks — require access to private data and external communications, creating new attack surfaces. Identity governance is seen as a key layer of defense.

Okta, a competitor in identity security, saw its stock jump 30% after its own earnings last week when investors responded to agent-identity software upside. CyberArk has similar software announced in late 2024, which is now being folded into Palo Alto’s broader platform.

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