Palo Alto Earnings Report Summary - February 2026

Overview

Palo Alto Networks, a leading cybersecurity firm based in California, released its earnings report after the market closed on February 18, 2026. Despite exceeding expectations, the company's stock experienced a decline of over 6% in after-hours trading.

Financial Performance

• Earnings Per Share (EPS): Reported at $1.03, surpassing the expected $0.94, marking a year-over-year growth of approximately 20%.
• Revenue: Increased to $2.6 billion, slightly above the anticipated $2.58 billion, reflecting a year-over-year growth of just over 10%.

Strategic Initiatives

During the earnings call, Palo Alto highlighted its successful "platformization" initiative, which aims to integrate its cybersecurity solutions into a unified platform. The company is also adapting quickly to clients focused on implementing AI solutions.

Additionally, Palo Alto announced the completion of its significant acquisition of CyberArk, an Israeli company, which is expected to enhance its offerings, particularly in identity protection and verification systems.

Guidance and Market Reaction

Despite the positive revenue growth, the company lowered its fiscal year 2026 EPS growth guidance from a range of $3.8–$3.9 to $3.65–$3.7, which is below the consensus estimate of $3.87. However, revenue expectations were raised significantly from approximately $10.5 billion to $11.3 billion.

The company indicated that while it is growing, the costs associated with the development and deployment of its new solutions have been higher than anticipated, leading to a slight decline in profitability despite revenue increases.

Analyst Outlook

Despite the stock's decline, analysts from major investment firms such as Morgan Stanley and BTIG maintain a positive outlook, seeing meaningful upside potential for Palo Alto Networks.

Technical Analysis

At the peak of the recent correction, Palo Alto's stock price fell more than 30% from its highs. The 78.6% Fibonacci retracement level provided short-term support. Analysts suggest that the stock may retest the $150 level, which is crucial for resuming an upward trend. A bearish signal is indicated by the crossover of the 100 and 200 EMAs, but a quick recovery towards the 50% Fibonacci level could lead to another upward movement, reminiscent of late 2022.