Palo Alto Networks cuts annual profit forecast as deal costs bite, shares fall

Advertisement Business Palo Alto Networks cuts annual profit forecast as deal costs bite, shares fall FILE PHOTO: A Palo Alto Networks logo is seen in this illustration taken August 18, 2025. REUTERS/Dado Ruvic/Illustration/File Photo 18 Feb 2026 06:35AM Bookmark Bookmark Share WhatsApp Telegram Facebook Twitter Email LinkedIn Set CNA as your preferred source on Google Add CNA as a trusted source to help Google better understand and surface our content in search results. Read a summary of this article on FAST. Get bite-sized news via a newcards interface. Give it a try. Click here to return to FAST Tap here to return to FAST FAST Feb 17 : Palo Alto Networks trimmed its annual profit forecast on Tuesday, signaling rising costs from recent acquisitions to enhance AI capabilities, sending the cybersecurity company's shares down around 7 per cent in extended trading. The company announced on Tuesday the acquisition of Israeli cybersecurity startup Koi, following last July's purchase of CyberArk Software in its largest deal to date and the buyout of Chronosphere in November, as it steps up efforts to counter AI-driven cyber threats.Palo Alto said acquisition-related costs jumped to $24 million in the second quarter, from $10 million a year earlier.While acquisitions expand the total addressable market, the company has acknowledged the challenge of effectively integrating larger acquired companies, such as CyberArk, which require more reengineering and restructuring. Subscribe to our Chief Editor’s Week in Review Our chief editor shares analysis and picks of the week's biggest news every Saturday. This service is not intended for persons residing in the E.U. By clicking subscribe, I agree to receive news updates and promotional material from Mediacorp and Mediacorp’s partners. Loading The company now expects adjusted profit per share of $3.65 to $3.70 for its fiscal 2026, down from its prior forecast of $3.80 to $3.90.However, Palo Alto raised its annual revenue forecast to between $11.28 billion and $11.31 billion, compared with its earlier expectations of $10.50 billion to $10.54 billion.Clients are stepping up investments in modernizing their security operations amid a wave of high-profile cyberattacks that have hit global companies, including F5 and UnitedHealth Group.The company said its quarterly and annual forecasts are inclusive of both CyberArk and Chronosphere acquisitions.Palo Alto forecast third-quarter revenue of about $2.94 billion to $2.95 billion, above analysts' average estimate of $2.60 billion, according to data compiled by LSEG.Its quarterly adjusted profit per share forecast of 78 cents to 80 cents was below estimates of 92 cents.Revenue for the second quarter rose 15 per cent to $2.59 billion, in line with estimates.Adjusted profit per share of $1.03 beat estimates of 94 cents for the three months ended January 31. Source: Reuters Newsletter Week in Review Subscribe to our Chief Editor’s Week in Review Our chief editor shares analysis and picks of the week's biggest news every Saturday. Sign up for our newsletters Get our pick of top stories and thought-provoking articles in your inbox Subscribe here Get the CNA app Stay updated with notifications for breaking news and our best stories Download here Get WhatsApp alerts Join our channel for the top reads for the day on your preferred chat app Join here Advertisement Also worth reading Content is loading... Advertisement Expand to read the full story Get bite-sized news via a newcards interface. Give it a try. Click here to return to FAST Tap here to return to FAST FAST