Palo Alto Networks (NASDAQ:PANW) wrapped up its FY25 with an exceptional Q4, handily beating expectations on both revenue and earnings. This strong performance served as a powerful validation of its “platformization” strategy. The company’s non-GAAP operating margin reached a record 30.3%, a first in its history, which demonstrates a successful balance between aggressive top-line growth and disciplined cost management. This profitability was underpinned by continued growth in key metrics like Next-Generation Security Annual Recurring Revenue (ARR) and Remaining Performance Obligations (RPO), indicating that customers are increasingly adopting the company’s integrated platform approach.
Looking ahead, management’s forward-looking guidance for FY26 also surpassed market expectations, projecting continued strong growth and a healthy free cash flow margin between 38% and 39% for the year, with a long-term target of 40% by FY28. The earnings call was also marked by a significant leadership change, as Nir Zuk, the company’s founder and Chief Technology Officer, announced his retirement.
The planned acquisition of CyberArk for approximately $25 billion has been met with mixed feelings in the investment community. While the deal is a bold move to add a critical identity security pillar to its platform, there is concern about the potential for limited synergies and technical integration challenges. The successful integration of these two platforms will be a key factor to watch over the coming year as Palo Alto Networks seeks to validate this significant and potentially risky investment.
For more details, key highlights, and commentary, check out the high-level earnings summary.
