Why Palo Alto Networks (PANW) Is Really Down 6.5% This Morning

"Palo Alto Networks reported Q2 fiscal 2026 results after the close on February 17. The Q2 FY2026 analyst EPS estimate stood at $0.96 per share on revenue of approximately $2.63 billion, per the most recent available estimates. In Q1 FY2026, the company had guided Q2 revenue to $2.57-$2.59 billion and EPS of $0.93-$0.95. Next-Generation Security ARR reached $5.9 billion in Q1, up 29% year over year, with remaining performance obligations of $15.5 billion."

"The earnings pressure appears tied to integration costs from recent acquisitions. 500 job cuts were announced as part of ongoing integration efforts. On Tuesday, the company also revealed it is acquiring Israeli cybersecurity startup Koi for $400 million to bolster AI agent security capabilities. CEO Nikesh Arora emphasized that "customers are keen to both modernize and normalize their cybersecurity stack, aligning them to our approach," pointing to continued strength in platformization deals."

Palo Alto Networks delivered solid Q2 fiscal 2026 results with Next-Generation Security ARR of $5.9 billion, up 29% year over year, and remaining performance obligations of $15.5 billion. Analyst estimates for Q2 EPS were $0.96 and prior Q1 guidance had set Q2 revenue at $2.57-$2.59 billion and EPS of $0.93-$0.95. Shares fell after the close and opened down as weaker-than-expected Q3 profit guidance concerned investors. Management cited integration costs from recent acquisitions and announced 500 job cuts, while also acquiring Israeli cybersecurity startup Koi for $400 million to bolster AI agent security capabilities. The stock is down 16% year to date and 26% over the past year.

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