Palo Alto Networks posts $9.10 billion in security ARR in fourth quarter
Key Facts
Palo Alto Networks' next-generation security annual recurring revenue reached $9.10 billion in the fourth quarter of fiscal 2026, up 63% year over year, according to the company's results. The figure measures the annualized value of active contracts on the last day of the reporting period, not revenue generated during the quarter. The company excludes hardware revenue and some legacy subscriptions and services, as well as professional services, from the metric. In the same period, total revenue rose 34% to $3.41 billion. Remaining performance obligations also increased 34% to $21.2 billion, placing growth in the metric alongside revenue and contractual-obligation indicators.
Chief Executive Nikesh Arora said the company added nearly $1 billion in net new next-generation security ARR during the quarter alone. Arora described the year-end finish as strong, linking the quarterly addition to the company's performance at the close of the fiscal year. Management attributed the year's strong results to its Network & AI Security, Cortex and Idira platforms. The statement points to the areas management identified as performance drivers, without detailing each platform's contribution to the reported figures. ARR growth of 63% was faster than total revenue growth of 34% in the same quarter.
A comparison with fiscal 2025 shows an acceleration in growth of the active-contract metric, as NGS ARR rose 32% to $5.6 billion that year. Revenue in the same year increased 15% to $9.2 billion. In the fourth quarter of fiscal 2026, the company posted a GAAP net loss of $282 million, compared with net income of $254 million in the year-earlier period. On a non-GAAP basis, net income was $853 million, versus $673 million a year earlier. The figures show net income moving in different directions under the two accounting measures during the quarter, alongside growth in revenue and ARR.
Cash flow was higher than in the year-earlier period, with net cash generated from operating activities at $1.4 billion in the fourth quarter, versus $1.0 billion in the fourth quarter of fiscal 2025. Adjusted free cash flow was $1.3 billion, compared with $954 million a year earlier. These cash metrics put quarterly flows alongside growth in revenue and remaining obligations, while differing from accounting profitability measures. Remaining performance obligations rose to $21.2 billion as quarterly revenue increased 34%. Together, these indicators provide a picture of the volume of business booked, revenue and cash flows during the period, according to the figures reported by the company.
For the first quarter of fiscal 2027, the company is targeting NGS ARR of between $9.54 billion and $9.56 billion, with expected year-over-year growth of 63%. It also expects revenue of between $3.300 billion and $3.310 billion, with growth ranging from 33% to 34%. For fiscal 2027, the company set a target range for NGS ARR of between $11.075 billion and $11.175 billion, representing year-over-year growth of between 22% and 23%. It is targeting annual revenue of between $14.10 billion and $14.20 billion, with expected growth of between 23% and 24%. These ranges are the company's targets for upcoming periods, after it recorded $9.10 billion in NGS ARR in the fourth quarter.
Arora said recent developments in artificial intelligence are pushing cybersecurity to the top of IT executives' priorities, linking this to the company's fiscal 2030 NGS ARR target of $20 billion. The target follows 63% growth in the metric in the fourth quarter, according to the reported results. The company's shares, traded under the ticker PANW, closed at $326.36 on November 10, 2026. The trading data available here do not include a documented high or low price for the session. The first-quarter results and fiscal 2027 outlook are the next milestones for the figures announced by the company.