Palo Alto Networks shares declined 1.3% to $357.29 in pre-open trading Wednesday, extending losses from the prior session where the stock fell more than 5% and shed another ~1.8% in after-hours trading. The pullback came despite the company reporting fourth-quarter fiscal 2026 results that surpassed Wall Street expectations on both the top and bottom lines.
Quarterly revenue came in at $3.41 billion, beating consensus estimates of $3.35 billion, while adjusted earnings per share reached $1.02, above the $0.98 forecast. Non-GAAP operating margin for the full year came in at 29.2%, showing only modest year-over-year expansion. Remaining performance obligations stood at $21.2 billion, and next-generation security annual recurring revenue surged 63% to $9.1 billion.
Investors appear to have focused on the company's forward outlook, which signaled a step down. First-quarter revenue guidance for fiscal 2027 was set at $3.30–$3.31 billion, implying a sequential decline from Q4's $3.41 billion. On a full-year basis, the company guided for EPS of $4.16–$4.19, slightly above the Street's approximate $4.11 estimate.
The stock's decline also reflected broader headwinds. The 10-year Treasury yield climbed to its highest level since January 2025 during the prior session, adding pressure on high-multiple growth and technology names across the market. Rising oil prices tied to Middle East tensions further weighed on sentiment. The NASDAQ was down 0.2% in the prior session.
Uncertainty surrounding integration costs from recent acquisitions — including CyberArk, Chronosphere, and the AI-native Console platform — may also have contributed to investor caution heading into the fiscal year ahead.
