Palo Alto Networks reported positive results in its latest earnings call, with revenue rises offsetting the exit of its founder.

The vendor posted fiscal fourth quarter 2025 revenues of $2.5 billion, up 16% year over year (YoY) while revenues for the fiscal year 2025 jumped 15% YoY to $9.2 billion.

Total revenue for the quarter was buoyed by a 19% rise in product revenue, with Palo Alto attributing the increase to growth in software form factors.

In the fourth quarter, some 56% of product revenue was from software form factors, while on a 12-month basis, the vendor’s product revenue from software surpassed 40%, which it put down to growth in software firewall form factors and PAN-OS’s SD-WAN.

Net income did drop, however, by around $245 million, or 36 cents per share, from $358 million, or 51 cents per share in the same period last year.

The revenue rise joined the news that founder Nir Zuk was set to retire. Having founded the firm back in 2005, Zuk departs the firm to “turn his attention to a new set of challenges and untapped ideas he is passionate about pursuing.”

Zuk, who was serving as Palo Alto Networks’s CTO, will be replaced by Lee Klarich, who is currently the firm’s CPO.

During the company’s earnings call, chairman and CEO Nikesh Arora thanked Zuk for his service, saying: “He started [a] revolution with the next-generation firewall, forever changing the security landscape.”

For Palo Alto Networks’ first fiscal year without its founder, the firm predicts it’ll see revenues of around $10.48 billion to $10.53 billion, with its Next-Generation Security (NGS) unit expected to bring in $7.00 billion to $7.10 billion, in what would be a YoY rise of between 26% and 27%.

For the fiscal first quarter 2026, the vendor said it expects to bring in revenues ranging from $2.45 billion to $2.47 billion, in what would represent YoY growth of 15%.

Public sector and Strata Cloud Manager demand remains strong

The firm recorded double-digit growth across the Americas for the quarter, rising by 15%, while demand from customers in Europe, the Middle East, and Africa (EMEA) grew by 19%.

CFO Dipak Golechha told investors that the firm’s public sector business saw a YoY improvement in bookings growth, while its NGS unit recorded “very healthy growth" in annual recurring revenue (ARR).

“We ended the quarter at $5.58 billion in NGS ARR, which grew 32%,” Golechha said, revealing that the unit was boosted by bringing in $17.5 million in support from customers who purchased access to Strata Cloud Manager.

Unveiled back in late 2023, Strata Cloud Manager combines the vendor’s network security and secure access service edge (SASE) offerings into an AI-powered platform that provides more detailed insights into potential threats.

The CFO added that the firm expects Strata Cloud Manager to be “a growing contributor going forward” but remaining “immaterial” to its NGS unit.

Full steam ahead on CyberArk deal

Top of line during Palo Alto Networks’ earnings call was its prospective purchase of cybersecurity firm CyberArk.

The $20 billion deal, announced in late July, would see Palo Alto Networks transform into an end-to-end cybersecurity platform to rival the likes of Zscaler and Fortinet, with CyberArk’s identity and privileged access management (IAM/PAM) offerings set to bolster its identity service offerings.

CEO Arora told investors that, upon the deal’s completion, Palo Alto Networks plans to “optimize” its combined go-to-market resources, saying: “We have nearly 10x the number of core sellers, and they see an opportunity to expand CyberArk's presence into our much larger 75,000 customer base.”

“We believe CyberArk will be able to both deepen [its] penetration in privileged access management and target a significantly larger base of global IAM users and machine identities,” Arora added.

The deal, expected to close during the second half of Palo Alto Networks' fiscal 2026, would be the latest in a string of acquisitions for the firm, including the recent purchase of AI security firm Protect AI.

Arora told investors that the addition of CyberArk would help double the value of the business over the next five years, adding: “We look forward to providing more details on our strategy once we close the transaction.”