PANW · Forward model · Subscription
What has to happen in Subscription
Model as of
This page changes Subscription inside the complete PANW model. Every other vertical, corporate programme and valuation assumption stays in the selected portfolio case.
Shares this vertical and portfolio case. Slider and horizon edits stay in your browser.
Subscription
Basis quarter$1.63B
Final quarter$3.70B
Implied CAGR+18%
Final revenue mix63%
The recurring software line and the largest single vertical. Its operational constraint is the contracted recurring base the company publishes as Next-Generation Security ARR: $8.13B at 2026 Q3, up 60% year over year, of which $1.63B came from CyberArk and Chronosphere and $6.5B was organic (+28%). Management's long-run frame is $20B of NGS ARR by FY2030 carried by 4,000+ platformizations, with roughly 120% net revenue retention and single-digit churn inside the platformized cohort.
Last four quarters
2025 Q4
$1.31B
Reported
2026 Q1
$1.36B
Reported
2026 Q2
$1.40B
Reported
2026 Q3
$1.63B
Reported
SASE - Prisma Access, Prisma SD-WAN, SaaS Security, DLPCortex - XSIAM, XDR, XSOARCloud security (Prisma Cloud)Identity security (CyberArk / Idira)Observability (Chronosphere)Prisma AIRS AI securityLegacy attached subscriptions, which sit in this line but are excluded from NGS ARR
Subscribers
2K
9.1% of a 25K addressable base
~2,280 platformizations at Q3 FY2026 (slide 6), of which ~630 are Identity and Observability. Platformizations, not customers.
Addressable subscribers
25K
the S-curve ceiling
The metric's own footnote caps it: the 5,000 largest customers, at most five platformizations each. 25,000 is the structural ceiling, not a forecast.
Net adds
124/qtr
ramping toward 148/qtr, throttled as the base approaches the TAM
~110 net new platformizations printed in Q3; 124 before the saturation damping the engine applies at 9.1% penetration returns that ~110.
Net-add ceiling
148/qtr
what supply can deliver at full rate
Identity and Observability add a fifth and sixth platform to sell, so the run rate drifts up rather than doubling.
ARPU
$159,442.08/mo
drifting +1.8% per quarter, floor $0.00
$2.317M NGS ARR per platformization x the 80.3% subscription-revenue bridge, on the deseasonalised basis quarter: $159.4k a month.
Non-subscriber revenue
$587M/qtr
growing +1.0% per quarter
The 35% of the line that is not platformized - legacy attached subscriptions and single-product accounts - on the deseasonalised basis quarter.
Subscription
Latest: $3.70B (2031Q3E)
| Period | Value |
|---|---|
| 2024Q4 | $1.13B |
| 2025Q1 | $1.19B |
| 2025Q2 | $1.23B |
| 2025Q3 | $1.23B |
| 2025Q4 | $1.31B |
| 2026Q1 | $1.36B |
| 2026Q2 | $1.40B |
| 2026Q3 | $1.63B |
| 2026Q4E | $1.77B |
| 2027Q1E | $1.87B |
| 2027Q2E | $1.94B |
| 2027Q3E | $1.96B |
| 2027Q4E | $2.12B |
| 2028Q1E | $2.23B |
| 2028Q2E | $2.31B |
| 2028Q3E | $2.33B |
| 2028Q4E | $2.51B |
| 2029Q1E | $2.63B |
| 2029Q2E | $2.72B |
| 2029Q3E | $2.74B |
| 2029Q4E | $2.94B |
| 2030Q1E | $3.08B |
| 2030Q2E | $3.19B |
| 2030Q3E | $3.19B |
| 2030Q4E | $3.43B |
| 2031Q1E | $3.59B |
| 2031Q2E | $3.70B |
| 2031Q3E | $3.70B |
Assumptions & reasoning
- SEASONALITY, derived jointly for Subscription and Support: Q1 1.014, Q2 1.008, Q3 0.973, Q4 1.006. Method - ratio-to-centred-four-quarter-moving-average on the eleven-quarter consolidated revenue series (2024 Q1 to 2026 Q3), which yields company factors of Q1 0.982, Q2 0.999, Q3 0.976, Q4 1.043; Product's own factors are then removed at its FY2025 revenue weight of 19.5% and the residual applied to both recurring lines.
- SEASONALITY SPREAD: the consolidated series gives two clean windows on Q3 (0.9732, 0.9752 - 0.20 points apart) and on Q4 (1.0391, 1.0431 - 0.40 points apart) against a 6.7-point company amplitude, so the company-level shape is reliable. The per-line eight-quarter windows are single observations and are used only as corroboration: Subscription's own moving-average factors are Q1 0.994, Q2 1.016, Q3 0.980, Q4 1.010 and Support's are Q1 1.010, Q2 1.004, Q3 0.972, Q4 1.013, both agreeing with the residual that fiscal Q3 is the trough. One shared residual is carried rather than two per-line shapes, because eight quarters cannot support a distinction between them.
- NGS ARR is the only published volume metric that maps to this line, and its definition spans all product, subscription and support offerings while excluding hardware and legacy attached subscriptions, support and professional services. It therefore straddles the product and subscription revenue lines and excludes part of support. It is used here as the driver of subscribers and ARPU through a disclosed bridge, not as a one-to-one revenue proxy.
- The 60% headline NGS ARR growth and the 28% organic figure describe the same quarter. A model built on the headline over-forecasts; a model built on organic under-forecasts, because the acquired $1.63B is now permanently in the company. The subscriber path here is landed platformizations, which is unaffected by the distinction, and the acquisition arrives through ARPU and the Identity and Observability platformization count instead.