Palo Alto Networks Powers Through with Stellar Fiscal Q3 2025 Results
Highlights
- Total Revenue: $2.29 billion (+15% YoY)
- Product Revenue Growth: 16%
- Next-Generation Security ARR: $5.09 billion (+34%)
- Adjusted Free Cash Flow: $578 million
- Diluted non-GAAP EPS: $0.80
- Americas Revenue Growth: 12%
- EMEA Revenue Growth: 20%
- JAPAC Revenue Growth: 23%
- Cortex AI ARR: ~$400 million (+2.5x)
Palo Alto Networks has once again demonstrated its prowess in the cybersecurity arena, posting a robust fiscal third-quarter performance for 2025. The highlights include a noteworthy 15% year-over-year increase in total revenue, hitting $2.29 billion. The company continued to shine brightly in the Next-Generation Security (NGS) domain, surpassing the $5 billion mark in Annual Recurring Revenue (ARR), a remarkable 34% year-over-year jump.
Revenue and Growth
Product revenue surged by an impressive 16%, supported by a substantial uptick in software forms, nearing 40% of the product revenue mix. The services segment also saw growth, with subscription revenues and support revenues up by 18% and 10%, respectively. This underlying growth is driven by the company's successful platformization strategy and innovative approaches in segments like Cortex AI, which alone has experienced a staggering 2.5 times increase year-over-year, reaching $400 million in ARR.
Geographical Performance
Across the globe, Palo Alto Networks showcased strong regional performance. The Americas saw a 12% increase in revenue, while EMEA and JAPAC were even more impressive, growing 20% and 23% respectively. This broad-based double-digit growth is a testament to the company’s extensive reach and strategic expansion efforts.
Financial Health and Innovation
The robust adjusted free cash flow of $578 million underscores Palo Alto Networks' financial health and commitment to sustainable growth. This financial flexibility will support their strategic initiatives, such as their platformization endeavors that have led to significant large deal momentum and increased adoption of AI-driven security operations.
Overall, Palo Alto Networks’ fiscal Q3 earnings highlight a harmonious blend of strong financial results and strategic foresight into emerging market needs, particularly in AI and cloud security. Their achievements indicate a well-orchestrated effort to meet growing demands in cybersecurity, all while maintaining a strong growth trajectory.