Palo Alto Networks, Inc.

- The company recently closed the CyberArk acquisition with a $2.3 billion cash outlay expected in Q3, and combined with the Chronosphere acquisition, total cash outlay is $4.9 billion. - In connection with the CyberArk acquisition, the company guaranteed payment obligations on CyberArk’s convertible senior notes due 2030. - The acquisition triggered a make-whole fundamental change under these notes, and the company plans to make an offer to repurchase these notes in the coming days. - The company issued 112 million shares as consideration for the CyberArk acquisition. - No explicit mention of new fundraising through debt or equity beyond these activities related to acquisitions. - Guidance and financial planning currently factor in these acquisitions and associated financing moves.

- The document does not explicitly detail specific current or future capital expenditures (capex) or strategic capital investments. - However, it highlights significant recent acquisitions: CyberArk and Chronosphere, with combined cash outlay of approximately $4.9 billion, signaling strategic investment in expanding product capabilities and market reach. - Emphasis on platformization strategy with investments in AI-driven security products (e.g., Prisma AIRS, AgentiX) and integration plans for acquired companies. - Plans to achieve 40% free cash flow margin by fiscal 2028, indicating disciplined capital management. - Confidence in handling supply chain dynamics and leveraging scale, suggesting ongoing investment to manage costs and efficiency. - Investment focus appears centered on R&D, M&A, and integration for growth rather than traditional capex projects like infrastructure or facilities.

- Q3 2026 revenue expected between $2.941 billion and $2.945 billion, up 28%-29%, including $340 million from M&A. - Fiscal year 2026 revenue forecasted at $11.28 billion to $11.31 billion, a 22%-23% increase, including $760 million from M&A. - Next-generation security ARR to reach $7.94 billion to $7.96 billion in Q3 (56% growth) and $8.52 billion to $8.62 billion for FY 2026 (53%-54% growth). - Growth driven by platformization strategy, AI security products (Prisma AIRS), SASE, software firewalls, and XSIAM. - Adoption of AI security solutions is early but growing; over 100 customers for Prisma AIRS, customers ramping AI deployment. - Enterprise AI traffic currently low but expected to grow as large data centers come online, increasing future demand. - Software product revenue growing, supported by rising hardware demand and new product introductions. - Strong volume growth in secure browser licenses (over 2 million Q2 sales).

- Fiscal Q3 2026 guidance: - NGS ARR expected in range of $7.94B to $7.96B, up 56% (includes $1.47B from M&A) - Revenue expected between $2.941B to $2.945B, up 28-29% (includes $340M from M&A) - Diluted non-GAAP EPS of $0.78 to $0.80 - Fiscal year 2026 guidance: - NGS ARR of $8.52B to $8.62B, up 53-54% (includes $1.52B from M&A) - Revenue expected between $11.28B to $11.31B, up 22-23% (includes $760M from M&A) - Operating margins between 28.5% to 29% - Diluted non-GAAP EPS of $3.65 to $3.70 - Adjusted free cash flow margin targeted at 37% - Long-term goals: - Achieve 40% free cash flow margin by fiscal 2028 - Reach $20 billion in NGS ARR by fiscal 2030

- Remaining Performance Obligation (RPO) grew 23% to $16.0 billion, including approx. $150 million from Chronosphere acquisition. - Current near-term revenue realization represented by current RPO is $7.1 billion, an 18% growth. - For fiscal Q3 2026, the remaining performance obligation is expected to be in the range of $17.85 billion to $17.95 billion, a 32% to 33% increase, including $1.6 billion contribution from M&A. - Full-year 2026 RPO guidance is $20.2 billion to $20.3 billion, a 28% increase inclusive of $1.6 billion from M&A. - These figures reflect a strong and growing order backlog supporting recurring revenue streams.