PANW stock | Earning crash | Feb 17 2026

 Palo Alto Networks (PANW) shares fell more than 5% in after-hours trading on February 17, 2026, despite reporting fiscal second-quarter results that exceeded analyst estimates. While the company beat on both the top and bottom lines, the "crash" was primarily driven by underwhelming profit guidance for the upcoming third quarter and the full fiscal year. 

Q2 2026 Earnings Summary (Ended Jan 31, 2026)

The company demonstrated strong operational performance but faced concerns regarding future profitability due to acquisition costs. 

• Adjusted EPS: $1.03, beating the $0.93 consensus estimate.
• Revenue: $2.6 billion, a 15% year-over-year increase, topping the expected $2.58 billion.
• Next-Generation Security (NGS) ARR: Grew 33% year-over-year to $6.3 billion.
• Remaining Performance Obligation (RPO): Rose 23% to $16.0 billion. 

Why the Stock Fell: The "Guidance Gap"

Investors reacted negatively to a lower-than-expected earnings outlook, suggesting that recent large acquisitions—including the $25 billion CyberArk deal and $3.35 billion Chronosphere purchase—are weighing on near-term margins. 

• Q3 2026 EPS Guidance: Forecasted at $0.78 to $0.80, significantly below the analyst consensus of $0.92.
• Full-Year 2026 EPS Guidance: Lowered to a range of $3.65 to $3.70, trailing the market expectation of $3.86.
• Revenue Surge: Conversely, the company raised its full-year revenue guidance to $11.28 billion – $11.31 billion (up from $10.52 billion), but the market prioritized the bottom-line miss. 

Key Strategic Context

• Platformization Strategy: CEO Nikesh Arora noted that the "platformization" trend is accelerating due to AI, with customers consolidating their security stacks onto Palo Alto’s unified platform.
• Recent Acquisitions: The stock's performance is currently sensitive to integration risks following the closures of the Chronosphere (Jan 29) and CyberArk (Feb 11) deals.
• New Deal: Simultaneously with earnings, the company announced the acquisition of Koi Security to bolster its AI agent risk detection capabilities.