Company Reports

We view Palo Alto Networks as a leader in cybersecurity, with platforms spanning network security, cloud security, identity, and security operations. We believe the firm stands to materially benefit from secular tailwinds across its three key end markets as cloud migrations, the shift to zero-trust security, and increased automation in cybersecurity increase Palo Alto’s value proposition to its clients. In our view, the firm’s sticky platforms, combined with the broad range of its cybersecurity solutions, have helped Palo Alto build a wide economic moat around its business.

Palo Alto reported fourth-quarter earnings, with sales up 34% to $3.41 billion and adjusted operating margins flat at 30%. The firm's next-generation security annual recurring revenue grew 63% to $9.10 billion, with artificial intelligence being an incremental driver.

OpenAI revealed on July 21 that during an evaluation of its models' cyber capabilities, these models escaped the evaluation environment, discovered a never-before-seen (zero-day) exploit, and breached the infrastructure of the digital AI library Hugging Face to get answers for the evaluation test.

Palo Alto reported very strong third-quarter results, with the firm's sales growing 31% to $3.00 billion and its adjusted operating margins contracting 30 basis points to 27.1%. The firm's next-generation annual recurring revenue, or NGS ARR, grew 60% in the quarter to $8.13 billion.

We view Palo Alto Networks as a leader in cybersecurity, with platforms spanning network security, cloud security, and security operations. We believe the firm stands to materially benefit from secular tailwinds across its three key end markets as cloud migrations, the shift to zero-trust security, and increased automation in cybersecurity increase Palo Alto’s value proposition to its clients. In our view, the firm’s sticky platforms, combined with the broad range of its cybersecurity solutions, have helped Palo Alto build a wide economic moat around its business.

On April 7, Anthropic announced Project Glasswing, its collaboration with security-focused vendors that aims to better prepare organizations as more advanced large language models, such as Claude Mythos, are released.

Anthropic confirmed the existence of an upcoming model after Fortune first reported plans for it on March 26. This new model, named either Mythos or Capybara, is reportedly much better than existing models at finding cyber vulnerabilities. This news sent our cyber coverage down 5% on average.

Over the last few months, investors have become increasingly worried about the future of software economic moats as fears of software disintermediation driven by artificial intelligence have grown.

We view Palo Alto Networks as a leader in cybersecurity, with platforms spanning network security, cloud security, and security operations. We believe the firm stands to materially benefit from secular tailwinds across its three key end markets as cloud migrations, the shift to zero-trust security, and increased automation in cybersecurity increase Palo Alto’s value proposition to its clients. In our view, the firm’s sticky platforms, combined with the broad range of its cybersecurity solutions, have helped Palo Alto build a wide economic moat around its business.

On Feb. 20, Anthropic released a vulnerability-scanning tool aimed at security applications, leading to an average drawdown of over 5% across our cybersecurity coverage as investors worry that Anthropic and other artificial intelligence labs could replace cybersecurity functions within companies.

Palo Alto reported strong second-quarter results, with the firm's sales growing 15% year over year to $2.6 billion and its adjusted operating margins expanding 190 basis points to at 30%. The firm's next-generation annual recurring revenue grew 33%, with 4 points of inorganic growth.

CyberArk reported solid fourth-quarter results, with sales up 19% to $373 million and adjusted operating margins expanding 100 basis points to 20%. The firm did not hold an earnings call due to its impending acquisition by Palo Alto Networks.

Investors have become increasingly concerned about software valuations, and as they consider the possibility that artificial intelligence-driven software solutions will replace the incumbents in the software sector, the broader software sector is experiencing a material pullback.

We view Palo Alto Networks as a leader in the cybersecurity space, with cybersecurity platforms spanning network security, cloud security, and security operations. We believe the firm stands to materially benefit from secular tailwinds across its three key end markets as cloud migrations, shift to zero-trust security, and increased automation in cybersecurity increases Palo Alto’s value proposition to its clients. In our view, the firm’s sticky platforms, combined with the broad range of its cybersecurity solutions have helped Palo Alto build a wide economic moat around its business.

Palo Alto reported solid first-quarter results, with sales growing 16% to $2.5 billion and adjusted operating margins expanding 140 basis points to 30%. The firm's next-generation security annual recurring revenue grew 29% to $5.9 billion.

CyberArk reported strong third-quarter results that included sales growing 43% to $343 million and adjusted operating margins expanding 400 basis points to 19%. The firm did not hold an earnings call due to the impending acquisition of the firm by Palo Alto Networks.

Palo Alto reported solid fourth-quarter results, with the firm's top line growing 16% year over year to $2.5 billion and its adjusted operating margins expanding 300 basis points to 30%. The firm's next-generation security annual recurring revenue expanded 32% to $5.6 billion.

We view Palo Alto Networks as a leader in the cybersecurity space, with cybersecurity platforms spanning network security, cloud security, and security operations. We believe the firm stands to materially benefit from secular tailwinds across its three key end markets as cloud migrations, shift to zero-trust security, and increased automation in cybersecurity increases Palo Alto’s value proposition to its clients. In our view, the firm’s sticky platforms, combined with the broad range of its cybersecurity solutions have helped Palo Alto build a wide economic moat around its business.

Palo Alto announced its intention to acquire identity security vendor CyberArk for $25 billion, broken down as 2.2005 Palo Alto shares and $45 in cash for each CyberArk share. Palo Alto's shares have fallen more than 10% since the news about the deal got leaked on July 29.

CyberArk reported solid second-quarter earnings ahead of schedule, alongside the announcement that Palo Alto intends to acquire the firm for around $25 billion. The firm also canceled its earnings conference call as a result of the announced Palo Alto transaction.