PALO ALTO NETWORKS INC (NASDAQ:PANW) reported its fiscal second quarter 2026 financial results after the market close on Tuesday, February 17, 2026. The cybersecurity leader delivered a mixed performance, beating profit expectations but falling short on revenue, while its forward-looking guidance triggered a sharp negative reaction from investors.
Quarterly Results vs. Estimates
The company's results for the quarter ended January 31, 2026, presented a clear split between earnings and sales performance when measured against Wall Street's forecasts.
- Revenue: The company reported quarterly revenue of $2.59 billion. This fell short of the analyst consensus estimate of approximately $2.63 billion.
- Earnings Per Share (Non-GAAP): Palo Alto Networks reported adjusted earnings per share of $1.03. This surpassed the analyst estimate of $0.96, representing a positive earnings surprise.
Market Reaction and Forward Guidance
Despite the earnings beat, the stock fell sharply in after-hours trading, declining approximately 7.6%. This immediate sell-off is primarily attributed to the company's updated annual profit forecast, which was trimmed from previous expectations. Management cited rising costs associated with recent strategic acquisitions, particularly those aimed at bolstering its artificial intelligence capabilities, as a key factor pressuring profitability.
The company's outlook for the upcoming third quarter also appears to be a point of concern for the market. While the provided analyst sales estimate for Q3 2026 stands at $2.65 billion, the press release and accompanying news suggest the company's own profit guidance for the period fell short of expectations, contributing to the negative investor sentiment.
Press Release Summary
The official announcement confirmed the financial results for Q2 2026 and positioned the company as continuing its focus on integrating AI across its security platform. Key elements highlighted in the release include the performance of its core platforms—Network Security, Cloud Security, and Security Operations—and the ongoing expansion of its AI-driven offerings like Prisma AIRS. The strategic acquisition of Israeli startup Koi was also noted as part of its effort to enhance its AI and automation portfolio, though this investment is concurrently impacting near-term profit margins.
Performance Context
The post-earnings drop adds to a challenging recent period for the stock. Prior to the earnings announcement, Palo Alto Networks shares had already declined approximately 12.9% over the past month. This indicates that investor concerns regarding growth sustainability or competitive pressures may have been building, with the quarterly results and guidance serving as a catalyst for the downward move.
For a detailed breakdown of historical earnings, future estimates, and analyst projections, you can review the full data here.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, a recommendation, or an offer to buy or sell any securities. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
