Palo Alto Networks (PANW)

Platform cybersecurity — firewalls + cloud security (Prisma) + AI SecOps (Cortex) — broadest security suite

AI exposure 11% — derived from reported segment revenue, not asserted.

Where it sits

Software Stack → Cybersecurity · figures rebased to Q4 FY2026, reported 2026-09-01

Security subscriptions and support are 80.1% of FY2026 revenue and firewall product a further 19.9%, so the 2 businesses in this sub-tier are 100% of revenue and Cybersecurity is effectively the whole company rather than one leg of it.

Reported segments

• Subscription & Support — 80.1% of revenue
• Product — 19.9% of revenue

Palo Alto Networks (FY2026 revenue $11,480M, +24.5% YoY; Q4 FY2026 $3,410M, +34%). Modelled on the reported revenue disaggregation rather than the platform view: Subscription & Support 80.1% ($9,200M, +24%) = primary B5 Cybersecurity, covering Strata, Prisma Cloud, Cortex and CyberArk identity; Product 19.9% ($2,280M, +27%). The mix has barely moved — it was 80.2/19.8 a quarter earlier — because two large acquisitions land inside the subscription line rather than alongside it. The transformation is visible only in ARR: Next-Generation Security ARR reached $9.10B, up 63%, guided to 22-23%…

How the 11% is built

• Subscription & Support — 80.1% of revenue × 12% AI-driven (estimate). Cortex applies AI to security operations and the stack increasingly secures AI workloads and agent identities — the Console acquisition is explicitly AI-native — but the base is conventional enterprise security and no AI revenue line is disclosed
• Product — 19.9% of revenue × 8% AI-driven (estimate). Firewall appliances, including those deployed in front of AI data centres

Investment read

Moat. Platform-consolidation lock-in spanning network, cloud, endpoint and privileged identity, with Console adding AI-native agentic workflow. Next-Generation Security ARR reached $9.10B in Q4 FY2026, up 63%, with nearly $1B of net new ARR in a single quarter and remaining performance obligations of $21.2B. The anchor is the network-security install base: firewalls sit in the traffic path carrying years of accumulated policy, which makes them the slowest layer in security to displace.

Bottleneck / pricing power. Real pricing power from breadth and consolidation economics, evidenced by a 38.4% adjusted free cash flow margin and a 29.2% non-GAAP operating margin on $11.48B of revenue. The FY2027 guide is the more honest read on the engine: 22-23% NGS ARR growth and 23-24% revenue growth once CyberArk sits in the base, against 63% reported.

Role in the AI stack. The platform-cybersecurity layer (network + cloud + identity + AI-SOC).

Connected companies

• CrowdStrike (CRWD) — PANW competes with: Endpoint/XDR + platform consolidation — CRWD Falcon vs PANW Cortex XSIAM
• Fortinet (FTNT) — PANW competes with: Network security / firewalls / SASE (Palo Alto vs Fortinet)
• Zscaler (ZS) — PANW competes with: SASE/SSE — Prisma Access vs Zscaler (Gartner SSE leaders)
• Cisco Systems (CSCO) — PANW competes with: cybersecurity — Cisco (Splunk/SASE/Hypershield) vs PANW
• Broadcom (AVGO) — PANW competes with: Symantec (Broadcom) SWG/DLP/endpoint overlaps PANW SASE/cloud, but Broadcom focuses Symantec on top accounts — partial rivalry
• Amazon (AMZN) — PANW supplies: cloud security (Prisma) for AWS workloads

Others in Cybersecurity

• CrowdStrike (CRWD)
• Fortinet (FTNT)
• Zscaler (ZS)
• Akamai Technologies (AKAM)

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