Abstract

Palo Alto Networks will report fiscal Q2 2026 results on February 17, 2026 Post Market; this preview summarizes consensus expectations for revenue, profitability, and EPS alongside segment dynamics and aggregated analyst views.

Market Forecast

Market consensus indicates Palo Alto Networks’ fiscal Q2 2026 revenue is projected at $2.58 billion, up 15.33% year over year; EBIT is estimated at $760.53 million, and adjusted EPS is estimated at $0.94 with an estimated year-over-year growth of 21.21%. The company’s margin profile is expected to remain robust, with gross profit margin supported by a high mix of subscriptions and services and net profit margin anticipated to be healthy; if management offers an outlook, investors will watch for adjusted operating margin discipline and EPS leverage.

The main business continues to be anchored by subscriptions and support, which are expected to drive sustained double-digit growth via platform consolidation and cross-sell across network security and cloud-delivered offerings. The most promising segment remains subscriptions and support at $2.04 billion last quarter, with steady year-over-year growth implied by continued expansion in next-gen security and platform attach; product revenue was $434.00 million.

Last Quarter Review

In the prior fiscal quarter, Palo Alto Networks delivered revenue of $2.47 billion, a gross profit margin of 74.21%, GAAP net profit attributable to shareholders of $334.00 million with a net profit margin of 13.50%, and adjusted EPS of $0.93, reflecting year-over-year growth on key profitability metrics.

A notable highlight was resilient margin execution, reflected in a mid-70% gross margin and double-digit net margin despite investment in go-to-market and R&D. The main business mix skewed to subscriptions and support at $2.04 billion, while product revenue was $434.00 million, underscoring the ongoing transition from hardware-heavy sales to higher-margin, recurring services.

Current Quarter Outlook (with major analytical insights)

Main business: Subscriptions and support revenue durability and margin quality

Subscriptions and support comprise the core of Palo Alto Networks’ revenue base and margin structure, accounting for the majority of total sales in the prior quarter. The forecasted revenue growth to $2.58 billion hinges on sustained expansion of next-generation security offerings, including cloud-delivered platforms and AI-enhanced threat prevention, which tend to carry attractive gross margins. Investors should monitor net new large deals and platform consolidation wins as leading indicators for renewals and expansion, particularly where customers standardize on the company’s unified security platform. A recurring revenue mix at this scale supports visibility and cash flow quality, though sales cycles and budget scrutiny can affect deal timing and mix.

Most promising business: Next-generation security platforms within subscriptions

Within subscriptions and support, next-generation security platforms are positioned to contribute outsized growth, supported by cross-sell of cloud security controls, secure access, and AI-driven analytics. The revenue base of $2.04 billion last quarter for subscriptions and support provides a foundation for consistent upsell, while the forecasted 15%+ year-over-year total growth suggests continued momentum in these higher-value subscriptions. Execution on platform attach and enterprise-wide standardization can elevate adjusted operating leverage as incremental subscription revenue drops through at higher margins, though integration complexity and competitive discounting remain factors to watch. Investors will focus on remaining performance obligations and billings as guides to forward revenue recognition, particularly for multi-year contracts in strategic accounts.

Stock price drivers: Billings trajectory, margin discipline, and large-deal momentum

Share performance around results is likely to be most sensitive to billings growth, implied demand for consolidated platforms, and any signals on spend optimization by large enterprises. Sustained gross margin in the mid-70% range and operating efficiency are expected to support adjusted EPS of $0.94, with incremental EBIT of $760.53 million reinforcing the operating leverage thesis. Any commentary on macro-driven deal scrutiny, duration changes in contracts, or shifts in product versus subscription mix could influence sentiment, as would updates on AI product adoption and consolidation pipeline. Guidance for the remainder of fiscal 2026, especially on revenue and margin ranges, will frame the durability of double-digit growth and the company’s ability to balance investment with profitability.

Analyst Opinions

The balance of recent analyst commentary skews bullish, emphasizing durable double-digit subscription growth, improving operating leverage, and a favorable mix shift toward recurring revenue. Well-followed institutions highlight that forecast revenue growth of approximately 15% year over year, combined with an estimated adjusted EPS increase of about 21%, reflects continued demand for platform consolidation and reinforced pricing power in mission-critical security workloads. Several analysts point to robust enterprise adoption of next-generation security suites and healthy win rates in large accounts as supportive of sustained billings growth and high-70% gross margin potential. The bullish cohort expects the company’s guidance to underscore resilience in security budgets and ongoing migration to cloud-delivered defenses, though they remain attentive to signs of elongated sales cycles or competitive incentives that could affect near-term billings. Overall, the majority view anticipates an in-line to slight beat on revenue and adjusted EPS, with continued focus on billings and remaining performance obligations as the primary leading indicators for the second half of fiscal 2026.