New York, February 19, 2026, 19:05 EST — After-hours
- Stock slips roughly 0.9% after hours, sticking close to $151
- Deal costs and the integration process remain in focus, as the profit outlook stays muted.
- March 20 is the cutoff for CyberArk noteholders to accept the company’s cash repurchase offer.
Palo Alto Networks shares slipped roughly 0.9% to $150.99 after hours on Thursday. Earlier in the session, the stock moved between $148.20 and $153.88.
Palo Alto Networks has lowered its full-year adjusted earnings outlook this week, citing a jump in deal and integration expenses as it folds in recent AI-focused security acquisitions. The company reported $24 million in acquisition-related costs for the second quarter, and it’s eyeing a $2.3 billion cash outflow in its fiscal third quarter connected to CyberArk.
Palo Alto reported fiscal Q2 revenue up 15% to $2.6 billion. Next-gen security annual recurring revenue climbed 33%, hitting $6.3 billion. For the fiscal third quarter, the company projected revenue between $2.941 billion and $2.945 billion, with adjusted earnings guided at 78 to 80 cents per share. The full-year adjusted profit outlook sits at $3.65 to $3.70 a share. CEO Nikesh Arora pointed to customers’ drive to “modernize and normalize” their security stacks as AI adoption intensifies. SEC
Palo Alto wrapped up its CyberArk acquisition on Feb. 11, according to a quarterly filing dated Feb. 17. The company had already closed its buyout of Chronosphere back on Jan. 29. Then, on Feb. 16, it struck a deal to acquire Koi Security, an endpoint posture management firm, for roughly $300 million. That transaction is expected to close in the back half of fiscal 2026, pending regulatory approval and other conditions.
Morningstar’s Malik Ahmed Khan pointed to the drop in profitability, calling it “mostly due to the firm’s acquisitions.” He’s betting Palo Alto will turn to cross-selling to limit the damage. TD Cowen highlighted that CyberArk and Chronosphere add weight to the company’s platform play, while Truist Securities said it would “lean in on weakness” as the integration story steadies. Reuters
Morgan Stanley is calling the drop a pause, not a pivot, cutting its price target to $223 from $245 but sticking with its “overweight” stance. Wedbush isn’t budging either, holding to its “outperform” rating and a $225 price target, according to Investopedia. Investopedia
Palo Alto on Thursday rolled out a cash tender offer targeting all outstanding CyberArk 0.00% convertible senior notes maturing in 2030, after wrapping up its acquisition of CyberArk. Holders of those notes need to act by 5 p.m. New York time on March 20 if they want to require Palo Alto to buy back their securities. The repurchase will take place March 24 at face value plus any accrued special interest, according to the company. These convertible notes let investors swap their bonds for shares if certain criteria are met.
This isn’t new—larger bundles may bump up revenue, but restructuring and integration tend to pressure margins and can pull sales teams off target. Should buyers hesitate or cross-selling miss its stride, investors might not wait around.
Traders are keeping an eye on Palo Alto’s upcoming updates for better detail on integration costs and margin expectations. March 20 is the next date to watch—CyberArk noteholders have a decision to make on the tender. Then comes March 24, the deadline for the cash repurchase.
