Chief executive officer at Palo Alto Networks Inc., Nikesh Arora attends the 9th edition of the VivaTech trade show at the Parc des Expositions de la Porte de Versailles on June 11, 2025, in Paris.
Palo Alto Networks beat Wall Street's fiscal first-quarter estimates after the bell on Wednesday and announced plans to buy cloud observability platform Chronosphere for $3.35 billion.
The stock fell about 3%.
Here's how the company did versus LSEG estimates:
Earnings per share: 93 cents adjusted vs. 89 cents expected
93 cents adjusted vs. 89 cents expected Revenue: $2.47 billion vs. $2.46 billion expected
Revenues grew 16% from $2.1 billion a year ago. Net income fell to $334 million, or 47 cents per share, from $351 million, or 49 cents per share in the year-ago period.
Palo Alto's Chronosphere deal is slated to close in the second half of its fiscal 2026. The cybersecurity provider is also in the process of buying Israeli identity security firm CyberArk for $25 billion under CEO Nikesh Arora's acquisition spree.
He told investors in an earnings call that Palo Alto is making this simultaneous acquisition to address the fast-moving AI cycle.
"This large surge towards building AI compute is causing a lot of the AI players to think about newer models for software stacks and infrastructure stacks in the future," he said.
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