Why did PANW stock fall after an earnings beat?

Shares slipped because management guided FQ3 EPS to $0.78 to $0.80, below the $0.92 consensus. Investors focused on margin pressure from higher investment and integrations, even as revenue, ARR, and RPO trends stayed strong. Near-term profitability visibility matters more than top-line beats in today’s software tape.

What were Palo Alto’s key FQ2 results?

EPS ex-items was $1.03 versus $0.94 expected. Revenue reached $2.59 billion versus $2.58 billion expected, up 15% year over year. Net income rose to $432 million, or $0.61 per share. ARR increased 33% to $6.33 billion, and RPO hit $16 billion, topping a $15.78 billion estimate.

What guidance did Palo Alto give for FQ3?

Management guided FQ3 EPS to $0.78 to $0.80, below the Street’s $0.92. Revenue was guided to $2.94 to $2.95 billion, above a $2.60 billion estimate. The outlook implies healthy demand but near-term margin pressure as AI initiatives, platform investments, and integrations take priority.

How do AI and acquisitions affect profitability?

AI agents and recent acquisitions can raise deal sizes, cross-sell, and retention over time, but they often require upfront spending and integration costs. That can weigh on near-term EPS. The key is whether cost synergies and operating leverage appear on schedule while ARR growth and renewals remain strong.

Global Market Insights

PANW Stock Today: Q3 EPS Guide Miss Weighs on Rally – February 18

ByDanny Kontos February 18, 2026February 18, 2026

PANW stock fell about 7% after Palo Alto Networks topped FQ2 estimates but guided FQ3 EPS below consensus. The company posted $1.03 EPS ex-items vs $0.94 expected and revenue of $2.59 billion vs $2.58 billion. Management sees FQ3 EPS at $0.78 to $0.80 versus the Street’s $0.92, while revenue is guided to $2.94 to $2.95 billion. We break down the print, why guidance rattled sentiment, and what investors should monitor next.