Palo Alto Tops Q2 Estimates On Continued AI Strength, Shares Slide

Palo Alto Networks reports strong Q2 results, but guidance disappoints

Published on Feb. 19, 2026

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Palo Alto Networks Inc. reported financial results for the second quarter of fiscal 2026 after the market close on Tuesday. The cybersecurity company exceeded analyst estimates for revenue and adjusted earnings per share, but its stock fell in after-hours trading as the company's guidance for the third quarter and full fiscal year disappointed investors.

Why it matters

Palo Alto Networks is a leading provider of cybersecurity solutions, and its quarterly results are closely watched as an indicator of broader trends in the industry. The company's performance and outlook provide insights into the demand for AI-powered security tools as well as the overall health of the enterprise technology market.

The details

Palo Alto reported fiscal second-quarter revenue of $2.59 billion, beating analyst estimates of $2.58 billion. The company posted adjusted earnings of $1.03 per share, also topping the consensus estimate of 94 cents per share. Total revenue was up 15% year-over-year, and remaining performance obligations grew 23% to $16 billion. Next-generation security annual recurring revenue increased 33% to $6.3 billion.

  • Palo Alto reported its fiscal Q2 2026 results after the market close on Tuesday, February 17, 2026.

The players

Palo Alto Networks

A leading cybersecurity company that provides firewall, cloud security, and other enterprise security solutions.

Nikesh Arora

Chairman and CEO of Palo Alto Networks.

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What they’re saying

“We saw continued strength in platformizations, a trend that is accelerating due to AI – customers are keen to both modernize and normalize their cybersecurity stack, aligning them to our approach. We also saw steady and strong adoption of AI security, which we expect will be a long term trend.”

— Nikesh Arora, Chairman and CEO (Benzinga)

What’s next

Palo Alto Networks' management team will further discuss the company's quarterly results and outlook during an earnings call scheduled for 4:30 p.m. ET on Tuesday.

The takeaway

Palo Alto Networks' strong Q2 performance highlights the continued demand for AI-powered cybersecurity solutions, but the company's disappointing guidance suggests potential headwinds in the enterprise technology market. Investors will be closely watching the company's earnings call for more insights into the factors driving its business.