Home / Business and Economy / Palo Alto Networks Cuts Profit Forecast Amid AI Acquisitions
Palo Alto Networks Cuts Profit Forecast Amid AI Acquisitions
18 Feb
Summary
- Palo Alto Networks revised its annual profit forecast downwards.
- Acquisition costs surged due to recent strategic purchases.
- The company increased its annual revenue forecast significantly.
Palo Alto Networks has reduced its fiscal year 2026 profit per share forecast to a range of $3.65 to $3.70, a decrease from the previous $3.80 to $3.90 outlook. This adjustment reflects higher costs associated with recent strategic acquisitions designed to bolster the company's artificial intelligence capabilities.
The cybersecurity leader has been actively expanding its portfolio through key purchases, including the recent acquisition of Israeli startup Koi. This follows previous significant deals such as the acquisition of CyberArk Software in July and Chronosphere in November, all aimed at addressing sophisticated AI-driven cyber threats.
Despite the revised profit outlook, Palo Alto Networks has elevated its annual revenue forecast to between $11.28 billion and $11.31 billion, an increase from earlier projections. The company reported that second-quarter revenue grew 15% year-over-year to $2.59 billion, meeting estimates, and adjusted profit per share for the quarter was $1.03, surpassing expectations.
Acquisition-related costs saw a substantial increase, jumping to $24 million in the second quarter from $10 million in the prior year. The company acknowledges the complexities of integrating larger acquisitions like CyberArk, which necessitate extensive reengineering and restructuring.
