Palo Alto Networks reports the fourth quarter of fiscal 2026 — the three months ended 31 July 2026 — and the full year, after the US close on Tuesday 1 September 2026. Consensus is $0.98 of non-GAAP earnings per share on $3.35 billion of revenue, press-reported from third-party estimate feeds.
Neither figure is news. On 2 June the company guided revenue of $3.345–3.355 billion, up 32%, and non-GAAP diluted EPS of $0.96–0.98 on 830–840 million shares. Consensus is the exact top of the guided EPS range and the middle of a revenue range one third of one percent wide.
What is news, and what the release settles, is how much of that 32% is Palo Alto's own business. In the April quarter the company disclosed the answer for itself: revenue excluding CyberArk and Chronosphere grew 14%.
The points
- More than half of last quarter's growth was acquired. Total revenue grew 31% in the April quarter; revenue excluding the two acquisitions grew 14%. Both are the company's own figures.
- The same wedge runs through every headline metric. Next-Generation Security ARR grew 60% reported and 28% organic. Remaining performance obligations grew 36% reported and 22% organic. Current RPO grew 34% reported and 17% organic — against 15% in the quarter before it.
- $1.63 billion of the $8.13 billion NGS ARR base was bought. The company disclosed the acquired contribution separately, which is the only reason the organic figure above can be checked at all.
- The guide asks for about $795 million of net new NGS ARR. Ending NGS ARR of $8.90–8.95 billion against the $8.13 billion disclosed at 30 April is $770–820 million. The subtraction is ours; both balances are the company's.
- The free cash flow margin is guided backwards. Palo Alto guided a 37.5% adjusted free-cash-flow margin for fiscal 2026, below the 38.5% trailing figure it reported in the same release and below the 38–39% it guided in November 2025 — in the year before a stated 40% target year.
- GAAP is a loss and will stay one for a while. The April quarter carried $280 million of acquired-intangible amortisation against $7.3 billion of net intangibles, plus $517 million of share-based compensation, turning $814 million of non-GAAP operating income into a $183 million GAAP operating loss and a GAAP diluted loss of $0.22.
- Our trailing Rule of 40 is 55.3 — revenue growth of 19.5% plus a free cash flow margin of 35.8% on $3.79 billion of free cash flow against $10.61 billion of revenue. Our arithmetic, on reported figures.
- Only one case in our forward model clears the price. Base $200.93, bull $304.36, and the chief executive's own maximal case $403.36, against $382.85 at the 27 August close.
Two growth rates, and the company publishes both
This is the unusual and creditable thing about the April release: Palo Alto did not leave the organic figure to be guessed at. It disclosed the acquired ARR contribution and the ex-acquisition revenue growth rate, so both rates are the company's own and the gap between them is not an estimate.
| Metric, April quarter | Reported | Organic |
|---|---|---|
| Total revenue growth | +31% | +14% |
| Next-Generation Security ARR | +60% | +28% |
| Remaining performance obligations | +36% | +22% |
| Current RPO | +34% | +17% |
Every figure in that table is Palo Alto's, from the third-quarter release of 2 June 2026. The bars above this article show the same four rows as a split between the part that was built and the part that was bought.
The reason it matters on Tuesday is timing. CyberArk and Chronosphere closed during the January quarter, which makes the April quarter the first full quarter of consolidation and the July quarter the second. From the January quarter of fiscal 2027 onward, the comparatives contain the acquisitions too, and the wedge closes on its own. So the 32% guided for Tuesday is one of the last two prints on which the reported and underlying rates differ by seventeen points.
That is not an argument that the acquisitions were a bad idea. It is an argument about what a reader should take from a 32% number: on the company's own disclosure, the business underneath it grew 14%, and the multiple attached to the stock is being paid on the first figure.
The margin goes backwards in the year before the target year
The second thing the July quarter settles is cash. Palo Alto guided a fiscal 2026 adjusted free-cash-flow margin of 37.5%. In the same release it reported a trailing twelve-month adjusted free-cash-flow margin of 38.5%, up from 34.2% a year earlier. And in November 2025 it had guided the same full-year figure to 38–39%.
So the guide is below the achieved rate and below its own earlier version, and it is the last guide before a year in which management has said the margin reaches 40%. There are good reasons for it — a full year of acquired operating expense is still to come, and the company took on CyberArk's convertible notes — but they are reasons why the number goes down, not reasons why it goes back up.
Tuesday closes the fiscal year, so this is the quarter that either lands the 37.5% or does not. It is also the first opportunity to hear the fiscal 2027 margin guide, which is the figure that says whether 40% is a plan or an aspiration.
What the price is paying for
Our Palo Alto model was published on 27 August against a price of $339.31, the previous close. The stock then rose 12.8% on 27 August, to $382.85, on press reports that the company was looking at acquisitions again after being turned down by Okta and Datadog — reporting, not a company statement, and Palo Alto has confirmed nothing.
| Case | Fair value | vs $382.85 |
|---|---|---|
| Bear | $119.23 | −69% |
| Base | $200.93 | −48% |
| Bull | $304.36 | −21% |
| Arora | $403.36 | +5% |
All four are ours. The base case exits the horizon at 9 times terminal revenue, which on this model's own terminal free cash flow margin of 36.3% is about 25 times free cash flow — a mature compounder's multiple. Hold every other assumption fixed and solve for the multiple that makes fair value equal the 27 August close, and it is 19.1 times terminal-year revenue. That solve is ours.
Only the case built in the chief executive's own frame — that frontier models capable of autonomous attack have permanently repriced the category, and that $20 billion of fiscal 2030 NGS ARR is a floor rather than a target — clears the price, by 5%.
Which puts Tuesday in proportion. The quarter is guided within a third of a percent on revenue and two cents on EPS. The disclosure that moves the model is the fiscal 2027 NGS ARR and margin guidance, because the model's argument is entirely about the rate at which the ARR base compounds after the acquired contribution stops flattering it.
What to watch
- Whether the organic disclosure is repeated. The ex-acquisition revenue growth rate and the acquired NGS ARR contribution are the two figures that make the headline readable. They were given in April; they are not a required disclosure, and if they disappear the 32% cannot be checked.
- Net new NGS ARR against the implied $770–820 million, and the fiscal 2027 ending ARR guide. The second is the number our model turns on; the first is one quarter of it.
- The fiscal 2026 adjusted free cash flow margin against the guided 37.5%, and whatever fiscal 2027 figure replaces it. Management has stated a 40% target year; this is the guide that either steps toward it or does not.
- RPO against the guided $20.9–21.0 billion, and current RPO organic growth against the 17% printed in April and 15% in January. Two quarters of organic cRPO in the mid-to-high teens is a different company from the one a 34% headline describes.
- Whether management addresses the acquisition reports. The stock added roughly 13% in a day on press reporting the company has not commented on. A question on capital allocation is more informative than the reporting was.
Palo Alto Networks reports the quarter and fiscal year ended 31 July 2026 after the US close on Tuesday 1 September; the company announced the date by press release. Consensus of $0.98 and $3.35 billion is press-reported from third-party estimate feeds as of 1 September 2026 on a non-GAAP basis, and is not a series this site stores or verifies. All guidance — fourth-quarter revenue, non-GAAP EPS, NGS ARR and RPO, and the fiscal 2026 adjusted free-cash-flow margin — is the company's own, from its third-quarter fiscal 2026 release of 2 June 2026, as are every reported figure quoted here and both the organic growth rates and the acquired ARR contribution, which Palo Alto disclosed itself. Ours rather than the company's: the net new NGS ARR implied by the ending-ARR guide, which is one disclosed balance subtracted from a guided one; the trailing Rule of 40; and the fair values, exit multiples and the multiple implied by the price, which are assumptions in our Palo Alto Networks model of 27 August 2026 and not company forecasts. The acquisition interest reported on 27 August is press-reported and uncommented on by the company; no figure here depends on it. The price of $382.85 is the 27 August 2026 close.
