Palo Alto Networks Cuts EPS Outlook, Boosts Revenue Forecast on $25B CyberArk Costs
Palo Alto Networks shares dropped 6% pre-market after lowering its 2026 adjusted EPS guidance to $3.65-$3.70 due to integration costs from the $25B CyberArk acquisition. It raised 2026 revenue guidance to $11.28-$11.31B and cited recent deals including a $3.35B Chronosphere buy to strengthen its AI security platform.
1. EPS Guidance Cut Sparks Share Drop
Palo Alto Networks slashed its 2026 adjusted EPS outlook to $3.65-$3.70 from $3.80-$3.90, triggering a 6% pre-market share decline. Management attributed the revision to higher-than-expected integration expenses from recent acquisitions.
2. Integration Costs Weigh on Profitability
The firm cited sizeable integration costs tied to its $25B CyberArk acquisition and other deals, including a $2.3B outlay in fiscal Q3. These expenses have compressed near-term margins as Palo Alto builds an integrated AI-driven security platform.
3. Revenue Forecast Raised as Strategy Advances
Despite profit pressures, Palo Alto raised its annual revenue forecast to $11.28-$11.31B from $10.50-$10.54B. Executives highlighted the $3.35B Chronosphere deal and acquisition of Israeli startup Koi as key moves to bolster identity security and observability offerings.