Palo Alto Networks delivered Q2 results that surpassed Wall Street’s expectations, with management crediting the growth to strong customer demand for platformization and next-generation security solutions. CEO Nikesh Arora emphasized that a record volume of large, multi-product deals and increased adoption of AI-powered security offerings were the main contributors. He specifically highlighted robust bookings growth, stating, “the record-breaking number of platformization deals this quarter demonstrates that customers are not just buying products, they are buying into a strategic partnership.” The company also benefited from continued momentum in software-based firewalls and SASE (secure access service edge) solutions, which saw heightened demand as organizations pursued cloud and AI transformation initiatives.

Is now the time to buy PANW? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Palo Alto Networks’s Q2 Earnings Call

• Robbie David Owens (Piper Sandler) asked about the strategic importance of security consolidation and the impact of agentic AI. CEO Nikesh Arora explained that consolidation is accelerating as AI amplifies the need for unified platforms, while highlighting the company’s increasing ability to win large, multi-product deals.

• Brad Alan Zelnick (Deutsche Bank) inquired whether recent results reflected improved macro trends or were primarily due to platformization. Arora responded that platformization and innovation were the main factors, with macro conditions remaining relatively stable.

• Saket Kalia (Barclays) sought details on the shift to software-based firewalls and customer lifetime value implications. CTO Lee Klarich attributed the success to cloud-native innovation, while Arora and CFO Dipak Golechha pointed to easier deployment and higher lifetime value relative to hardware.

• Gabriela Borges (Goldman Sachs) asked about the mix of advanced subscriptions and the durability of virtual firewall growth. Golechha noted the transition to next-generation products as a key growth driver and expects durable performance from software firewalls and new offerings like Prisma AIRS.

• Shaul Eyal (Cowen) questioned the competitive landscape in enterprise browsers and the rise of “browser wars.” Arora explained that the need for secure, enterprise-controlled browsers is growing as AI-driven features proliferate, positioning the company’s browser offering as a future SASE stack staple.

Catalysts in Upcoming Quarters

Looking ahead, the StockStory team will focus on (1) the integration process and customer uptake of CyberArk’s identity security solutions, (2) continued adoption and monetization of AI security offerings like Prisma AIRS, and (3) further progress in shifting customers toward software-based firewalls and multi-platform agreements. Execution on these priorities, along with sustained operating margin expansion, will be key markers for Palo Alto Networks’ performance.

Palo Alto Networks currently trades at $185.95, up from $176.40 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).

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