Hansa Faralla, Senior Vice President of Investor Relations, introduces the earnings call for Palo Alto Networks' Q4 2026, emphasizing the presentation of financial results, forward-looking statements, and the importance of reviewing the company's press release and SEC filings for detailed information on risks and uncertainties. The call is moderated by the CEO and CFO, with all financial metrics provided in both GAAP and non-GAAP formats for comprehensive analysis.

The company achieved record-breaking Q4 results with strong bookings momentum, surpassing $20 billion in RPO for the first time. Notable achievements include nearly $1 billion in net new NGFA, significant platformization, and successful acquisitions. AI-driven cybersecurity and platform standardization validate the company's strategy, leading to high NRR and setting the stage for future growth.

In fiscal 2026, AI's evolution significantly impacts enterprise cybersecurity, with the emergence of autonomous agents and diversified AI models. These shifts necessitate real-time defense, unified platforms, and advanced endpoint security to protect expanding digital infrastructures. Organizations must adapt to secure both human and machine identities, leveraging sophisticated models and comprehensive architectures for proactive threat mitigation.

The dialogue highlights the urgency for advanced cybersecurity measures, emphasizing AI-driven threats and the necessity for real-time defense strategies. It underscores the success of integrating AI and observability platforms, achieving significant growth in error handling and customer acquisition. The discussion also addresses the emerging challenge of managing autonomous AI agents, advocating for sophisticated identity and security controls to ensure enterprise-wide governance and compliance.

The dialogue highlights the transformative impact of AI on cybersecurity, emphasizing global infrastructure investment, the imperative of Zero Trust defense, and the emergence of AI as an essential enterprise requirement. It also announces the acquisition of Console, integrating AI-first solutions, and underscores the importance of disciplined execution and customer partnership for sustained leadership.

The dialogue highlights a robust conclusion to a record-breaking year, emphasizing the strength across various platforms and the early achievements of integration efforts. The speaker notes exceeding guidance in all areas, discussing results on both a recorded and pro forma basis for a clearer growth comparison.

Achieved record RPO and NGS ARR growth, surpassing $20B and nearly $1B in Q4, respectively, with a 34% and 63% increase year-over-year. Introduced new revenue disclosure by platform: Network & AI, Security Cortex, and IO, reflecting business growth since Sassy's inception and X's launch.

Revenue across various platforms, including network and AI security, Cortex, and Idera, grew significantly in fiscal year 26, driven by market share gains, strategic acquisitions, and successful integration. Despite gross margin declines due to the shift towards SaaS offerings and rising hardware costs, the company anticipates continued growth, focusing on optimizing total operating income and margins.

The company achieved significant operating margin expansion and increased free cash flow margins, leveraging M&A synergies and efficient scaling. With a stable transition to annual billing and a robust balance sheet, the firm is poised for sustained profitable growth, aiming for a 40% free cash flow margin target in fiscal 28.

The dialogue outlines a strategic vision emphasizing innovation and AI to achieve $20 billion in NGS ARR by 2030, with fiscal Q1 and full-year guidance set at 63% and 23% growth, respectively, while noting the impact of a large customer migration on ARR seasonality.

The dialogue focuses on cybersecurity trends and strong bookings, as discussed in analyst questions. Analysts inquire about market momentum, with emphasis on current sector performance and future outlook.

Discusses uneven acceleration in the market, emphasizing the importance of company coverage and strategic planning for product development and M&A as a consequence rather than a primary strategy in the upcoming fiscal year.

Discusses adapting security architectures for AI advancements like agents and open models, emphasizing quick market trend adaptation through strategic acquisitions to ensure customer AI implementations remain secure.

The dialogue explores the acceleration in cyber performance, discussing the size of deals from new logos within the install base and the potential for revenue synergies. It highlights the untapped market within the existing customer base and the strategic focus on leveraging the sidebar platform for further penetration.

The dialogue highlights the successful integration of Cyber Art into a larger company, emphasizing cost synergy, margin improvement, and strategic product launches under new leadership. The focus on identity security, accelerated momentum, and expansion into new categories like Modern Pam showcases a proactive approach to market needs. With plans for upselling and net new sales, the acquisition is deemed highly beneficial, positioning the company well for future growth in non-shuttle i's and agents, a field lacking a clear leader.

The dialogue discusses the evolving landscape of cybersecurity, emphasizing the shift towards platformization and AI-driven solutions as threats become normalized. It highlights increased interest from CEOs in cybersecurity, the need for modernized infrastructure, and the urgency to address long-standing technical debt to prevent major breaches. This transformation is seen as a significant tailwind for growth in the cybersecurity sector, moving away from fragmented solutions towards consolidated, scalable platforms.

The dialogue explores the challenges of operational technology in cybersecurity, emphasizing the need for rapid vulnerability patching and platform solutions. It discusses the transition from identifying vulnerabilities to actionable solutions, highlighting a 4-hour deployment capability for Ot and open source vulnerabilities. The conversation also touches on customer adoption timelines and the strategic partnerships in the AI cybersecurity space.

Discusses Chronosphere's position as a leading observability solution designed for the AI era, offering cost advantages and competitive capabilities, aiming to capture a significant market share in the growing observability space.

Discusses the methodology behind fiscal 27 cybersecurity budget forecasting, emphasizing process transparency, trend analysis, and resource planning to exceed consensus expectations amidst AI advancements.

The dialogue discusses a significant increase in competitive SASI displacements, attributed to the integration of SASI with SD1 and the offering of a comprehensive platform, simplifying customer choice for standardization and modernization. This approach leverages existing customer relationships and products, enhancing market position post-COVID.

The dialogue explores methods to expedite enterprise technical debt resolution through staggered payments and platformization strategies, emphasizing the balance between current priorities and long-term transformation plans, particularly in the context of AI adoption.

Discusses the strategic shift towards AI and data-centric cybersecurity, aiming to reduce manual intervention in detection, prevention, and remediation, leveraging AI to enhance intelligence across multiple deployments and customers, envisioning a future where cybersecurity operations are autonomous and highly efficient.