⚠ Acquired Revenue, Acquired LossesModerate threat

Palo Alto Networks (PANW) — threat to the moat

CyberArk and Chronosphere added $930 million of revenue to Palo Alto and lost $797 million doing it.

The two largest acquisitions came with losses attached. After closing, CyberArk and Chronosphere together contributed "revenue of $ 930 million and operating loss of $ 797 million" in fiscal 20261.

CyberArk and Chronosphere after closing, fiscal 2026 ($M)930Revenue-797Operating lossPalo Alto Form 10-K FY2026, acquisition note
Nearly a dollar of loss for each dollar of sales.

Much of that loss is accounting. Amortization of acquired intangibles rose to $638 million from $164 million2, acquisition costs were $295 million3, and accelerated vesting on CyberArk and Koi awards cost $177 million4.

Pro forma figures show the combined picture. Had the deals closed at the start of fiscal 2025, the company would have reported fiscal 2026 revenue of $12,312 million and a net loss of $114 million5.

The third quarter, when CyberArk closed, showed the effect most clearly. Revenue that quarter included $388 million from CyberArk and Chronosphere6, and the company reported a GAAP operating loss of $183 million, against operating income of $219 million a year earlier7.

Losses at acquired businesses are expected in the first months. What matters is whether they shrink. If CyberArk and Chronosphere still produce an operating loss in fiscal 2027, after a full year of integration and with amortization in both years, the deals will be costing more than the platform argument promised.

References
  1. ReportedAfter closing, CyberArk and Chronosphere together contributed "revenue of $ 930 million and operating loss of $ 797 million" in fiscal 2026.
    Palo Alto Networks Form 10-K for fiscal 2026 (year ended 31 July 2026) - acquisition notes: CyberArk, Chronosphere and other purchase accounting, and pro forma results. — FY2026 · publ. 10 September 2026 · source ↗
  2. ReportedAmortization of acquired intangibles rose to $638 million from $164 million, acquisition costs were $295 million, and accelerated vesting on CyberArk and Koi awards cost $177 million.
    Palo Alto Networks fourth-quarter and fiscal 2026 results release, Form 8-K exhibit 99.1 - income statement, non-GAAP reconciliation, balance sheet, cash flow, Next-Generation Security ARR, remaining performance obligations and fiscal 2027 guidance - balance sheet and cash flow statement. — Q4 FY2026 · publ. 1 September 2026 · source ↗
  3. ReportedAmortization of acquired intangibles rose to $638 million from $164 million, acquisition costs were $295 million, and accelerated vesting on CyberArk and Koi awards cost $177 million.
    Palo Alto Networks fourth-quarter and fiscal 2026 results release, Form 8-K exhibit 99.1 - income statement, non-GAAP reconciliation, balance sheet, cash flow, Next-Generation Security ARR, remaining performance obligations and fiscal 2027 guidance - balance sheet and cash flow statement. — Q4 FY2026 · publ. 1 September 2026 · source ↗
  4. ReportedAmortization of acquired intangibles rose to $638 million from $164 million, acquisition costs were $295 million, and accelerated vesting on CyberArk and Koi awards cost $177 million.
    Palo Alto Networks Form 10-K for fiscal 2026 (year ended 31 July 2026) - financial statements and notes: deferred revenue, obligations, convertible notes, share-based pay, capital returns and receivables. — FY2026 · publ. 10 September 2026 · source ↗
  5. ReportedHad the deals closed at the start of fiscal 2025, the company would have reported fiscal 2026 revenue of $12,312 million and a net loss of $114 million.
    Palo Alto Networks Form 10-K for fiscal 2026 (year ended 31 July 2026) - acquisition notes: CyberArk, Chronosphere and other purchase accounting, and pro forma results. — FY2026 · publ. 10 September 2026 · source ↗
  6. ReportedRevenue that quarter included $388 million from CyberArk and Chronosphere, and the company reported a GAAP operating loss of $183 million, against operating income of $219 million a year earlier.
    Palo Alto Networks third-quarter fiscal 2026 results release, Form 8-K exhibit 99.1 - including $1.6 billion of NGS ARR, $1.8 billion of remaining performance obligations and $388 million of revenue from CyberArk and Chronosphere. — Q3 FY2026 · publ. 2 June 2026 · source ↗
  7. ReportedRevenue that quarter included $388 million from CyberArk and Chronosphere, and the company reported a GAAP operating loss of $183 million, against operating income of $219 million a year earlier.
    Palo Alto Networks third-quarter fiscal 2026 results release, Form 8-K exhibit 99.1 - including $1.6 billion of NGS ARR, $1.8 billion of remaining performance obligations and $388 million of revenue from CyberArk and Chronosphere. — Q3 FY2026 · publ. 2 June 2026 · source ↗
Sources
Generated September 26, 2026