Palo Alto Networks (NASDAQ: PANW) is a leading global cybersecurity provider focused on delivering comprehensive security solutions built on advanced technologies, including artificial intelligence. The company specializes in helping organizations manage and secure their networks, cloud services, and endpoints via its platformization strategy, which integrates a variety of security services.

In its fiscal third quarter of 2025, ended April 30, 2025, Palo Alto Networks experienced strong growth, with total revenue reaching $2.29 billion, a 15% increase year-over-year compared to $1.98 billion in the same quarter of the previous year. Within this revenue, product revenue grew by 16% to $452.7 million, while subscription and support revenue increased by 18% to $1.84 billion.

Palo Alto’s Next-Generation Security (NGS) Annual Recurring Revenue (ARR) surpassed the $5 billion mark, totaling $5.09 billion, representing a year-over-year growth of 34%. The company also reported a 19% year-over-year increase in remaining performance obligation (RPO), totaling $13.5 billion. The average duration of new contracts remained stable at approximately three years.

The gross margin for the quarter was 76%, with the product gross margin reported at 78.4%. Operating expenses as a percentage of revenue improved by 340 basis points year-over-year, leading to an operating income of $218.8 million. The company generated $578 million in adjusted free cash flow during the quarter, and its non-GAAP net income was reported at $560.9 million, or $0.80 per diluted share.

Looking ahead, the guidance for fiscal year 2025 was reaffirmed, with expectations for NGS ARR to range between $5.52 billion and $5.57 billion, marking a growth of 31% to 32%. Revenue guidance for the fourth quarter ranges from $2.49 billion to $2.51 billion, which translates to a year-over-year growth of 14% to 15%. Additionally, diluted non-GAAP earnings per share are projected to be between $0.87 and $0.89.

Palo Alto Networks’ ongoing commitment to innovation and an expansive portfolio of AI-driven security solutions positions it for sustained growth as the demand for comprehensive and integrated cybersecurity strategies continues to rise.