Fiscal fourth quarter results are Nikesh Arora, our Chairman and Chief Executive Officer; and Dipak Golechha, our Chief Financial Officer. You can find the press release and other information to supplement today's discussion on our website at investors.paloaltonetworks.com.

While there, please click on the link for quarterly results to find the Q4 '26 supplemental financial information and Q4 '26 earnings presentation. During the course of today's call, we'll be making forward-looking statements and projections regarding the company's business operations and financial performance as well as the company's recent acquisitions.

These statements made today are subject to a number of risks and uncertainties that could cause our actual results to differ from these forward-looking statements. Please review our press release and recent SEC filings for a description of these risks and uncertainties.

We assume no obligation to update any forward-looking statements made in today's presentation. This presentation also contains non-GAAP financial measures and key metrics relating to the company's past and expected future performance.

Non-GAAP financial measures should not be considered a substitute for financial measures prepared in accordance with GAAP. The most directly comparable GAAP financial metrics and reconciliations are in the press release and the appendix of the investor presentation.

Unless specifically noted otherwise, all results and comparisons are on a fiscal year-over-year basis. I will now turn the call over to Nikesh.

Thank you, Hamza. Good day, everyone, and thank you for being with us to discuss our progress.

As you can see, our execution fueled a record finish to the fiscal year. We exceeded our guidance across every financial metric in Q4 with bookings momentum accelerating for the second straight quarter.

This performance is a direct result of record-breaking platformization adoption and the growing urgency among customers to fortify their defenses as AI fundamentally redefines the security landscape. We achieved record RPO, surpassing the $20 billion threshold for the first time, to close the year at $21.2 billion, representing a growth rate of 34%.

NGS ARR reached $9.1 billion, up 63%, enabling us to report one of our most substantial next-generation security ARR outperformances to date. Most notably, we added nearly $1 billion in net new NGS ARR this quarter alone.

I remember my first analyst day in 2019, shortly after I arrived, we set a high bar to reach $1 billion in next-generation security revenue by fiscal 2022, just as we were initiating our pivot from a single-product firewall vendor to a unified security platform. That transformation journey has reached a pivotal inflection point, and the scale of our current sex success is a testament to that vision.

We delivered broad-based strength across our platforms in Q4, with network security, our largest business, reporting exceptional results across SASE, software, and hardware firewalls. XSIAM maintained its strong momentum, while Prisma AIRS achieved a significant milestone, surpassing $100 million in ARR within four quarters of general availability.

This represents the fastest scaling product in the history of Palo Alto Networks. Fiscal 2026 marked a pivotal inflection point in our transformation journey.

We closed the two largest acquisitions in our history with CyberArk and Chronosphere, both of which are exceeding our initial expectations. Both businesses are gaining significant traction within our platformized architecture and are scaling at an accelerated pace compared to their previous stand-alone performance.

These achievements are a testament to the execution and deep collaboration with the thousands of new colleagues who've joined us this past year. We look forward to continuing this shared momentum into FY '27.

Q4 was the very first quarter in which we witnessed the profound implications of cyber-capable models. As I've said before, AI is a long-term tailwind for cybersecurity.

While these models are becoming increasingly proficient at uncovering vulnerabilities, detection is merely the opening act. Truly validating, interpreting context, and resolving these issues requires broad cybersecurity platforms working alongside frontier AI.

This synergy is essential to stress-test environments, manage agentic actions, and trigger machine-speed remediation during an active threat. Defending at that speed necessitates a unified data architecture where AI processes every signal, collapsing response times from days to just minutes.

Platformization is the only viable strategy for real-time defense, fighting AI with AI. That philosophy continued to gain significant resonance with our customers in Q4.

During the fourth quarter, we achieved approximately 220 net new platformizations, surpassing our prior record and representing more than twice the volume of when we initiated this metric 2 years ago. The performance validates that our philosophy of real-time defense through unified architecture continues to gain significant resonance.

Beyond initial adoption, standardizing on our platform yields superior retention and expansion, with NRR, or net revenue retention, exceeding 120% for our platformized cohort in Q4. As we look forward, we remain on track towards our long-term objective of over 4,000 platformizations by fiscal 2030, which serves as the bedrock for reaching our $20 billion next-generation security ARR target.

Our largest Q4 wins show platformization in action. During the fourth quarter, we secured $126 million agreement with a global telecoms leader.

This organization moved to standardize on our network security platforms, bolstering their next-generation firewall footprint while displacing legacy proxy providers with Prisma Access for SASE. We also closed a $72 million transaction with a premier IT services provider.

This client has fully embraced platformization across network security, Cortex, and Ideera, making eight-figure investments in each, serving as a powerful validation of our cross-sell momentum in Q4. A further highlight was a $53 million platformization deal with a leading global payments platform.

Beyond standardizing their network defense on our architecture, they committed high seven figures to Prisma AIRS as they accelerate their enterprise AI initiatives. Fiscal 2026 has emerged as a landmark period in the rapid evolution of AI, marked by three distinct inflections the last 6 months.

Each of these shifts fundamentally redefines how AI enters AI interacts with the enterprise and, by extension, how it impacts the cybersecurity landscape. For us to effectively lead and protect our customers, maintaining our position at the vanguard of these structural changes is paramount.

The first inflection was the arrival of OpenClaw. Earlier this year, OpenClaw served as the catalyst for the transition from standard LLMs to agentic action, fundamentally altering the dynamic between human operators and AI systems.

Just a year ago, AI was largely defined by individual human prompting, asynchronous, multiturn dialogue, where a task was completed with a person in the loop. Virtually overnight, we witnessed the emergence of fully autonomous agents.

These are persistent entities that operate for extended durations, executing complex workflows without direct supervision. Where a single employee once managed one task at a time, that same individual can now orchestrate thousands of autonomous agents.

The implications for the enterprise are profound. Each of these agents generates continuous traffic, interacting with models, querying internal data, and communicating with other tools and agents around the clock.

This creates a massive volume of telemetry that must be observed, while every agent requires its own set of credentials. We're now securing a whole new class of machine identities with autonomous permissions.

This surge in traffic, data, and identity complexity represents a significant long-term tailwind across every one of our platforms. The second was the Mythos moment, which proved that deep domain training enables AI to achieve unprecedented proficiency.

In our sector, this is manifested as the weaponization of AI to identify and exploit vulnerabilities at scale. This shift has exposed the deep technical debt within the enterprise, where legacy flaws and persistent misconfigurations that once took months for a human to uncover are now exploited in minutes.

In an AI-threat-driven threat environment, there's no longer anywhere to hide. For our customers, the Mythos moment reframed the security challenge from visibility to velocity.

Organizations must now identify exposures before they are weaponized and respond in machine speed. This is why real-time defense has shifted from a future roadmap item to a present-day requirement.

To address this, we expanded our Frontier AI Defense service last month, introducing a multivariable harness that enables enterprises to stress-test their environments. This service leverages the most sophisticated cyber-capable models available, and we are proud to be the first certified commercial partner for Mythos 5.

The third involves an emerging inflection point that we expect will dominate the cybersecurity dialogue in the coming quarters. Over the past 90 days, the market has moved beyond a handful of frontier models towards a diversified ecosystem of open-weight and open-source architectures.

Enterprises are increasingly prioritizing sovereign control over their AI, leading to the deployment of specialized models deeply integrated with proprietary data. We expect a major acceleration as organizations utilize internal telemetry to fine-tune models for bespoke enterprise use cases.

While frontier models will continue to set the high-water mark for intelligence, the broader market is heading towards rapid fragmentation and proliferation. Crucially, each new deployment adds more infrastructure to fortify and more sensitive data to protect.

The surface area requiring platformized protection is expanding dramatically. Three pivotal moments, each with a unique impact, yet all leading to a single conclusion.

As the relationship between humans and AI evolves and deployments multiply, the necessity for unified, real-time defense has never been greater. It is early days, but we're beginning to see the signs of how these trends are impacting our business, starting with our largest business, network security.

AI represents a significant long-term tailwind that is expanding our total addressable market in network security while reinforcing that platformization is the only viable strategy for the modern enterprise. As the global AI buildout continues, every new data center becomes critical infrastructure that requires robust fortification through hardware and software firewalls, whether delivered natively by cloud providers or via a unified security platform.

The ecosystem driving this infrastructure expansion has reached a pivotal inflection point, and now we are seeing a new vanguard of buyers emerge, spanning sovereigns, neoclouds, and frontier AI labs, all racing to deploy massive computational capacity that must be secured. We achieved strong early traction with this cohort in FY '26, including multiple seven-figure bookings in the fourth quarter.

In total, our firewall execution drove accelerated bookings for the fiscal year, fueled by robust demand for our latest Gen 5 hardware and the continued momentum of our software offerings as customers scale their cloud and AI workloads. As this infrastructure matures and autonomous agents are deployed, we expect a dramatic proliferation of agentic traffic across every network and cloud environment.

The impact on our SASE platform is already evident, where agentic traffic has surged 9x over the last 9 months. Defending at this scale requires machine-speed inspection, our competence, a core competence we have refined for two decades, enabling us to block more than 30 billion attacks in a single day.

Ultimately, AI is underscoring the urgent need for unified platforms that deliver real-time defense. In FY '26, our platform advantage drove exceptional results in our SASE business, where bookings grew 40% with broad strength across access, SD-WAN, and Secure Browser.

We successfully displaced legacy incumbents in nearly 100 accounts, representing over $400 million in total contract value, nearly double the volume of displacement from a year ago. While we have rapidly ascended to the number-two position in this market, we are playing to win and remain on a clear trajectory to become the SASE leader within the next 5 to 7 years.

We're in the early chapters of this shift, where the future necessitates securing both human and machine identities through a unified architecture capable of providing defenses at machine speed. Organizations are transitioning AI initiatives from experimentation to full-scale production, significantly widening the defensive perimeter with each new deployment.

Prisma AIRS has continuously adapted alongside these adoption cycles, evolving to mitigate the unique risks emerging from every phase of the AI journey. While our initial focus addressed the chat-box-centric era of generative AI, our vision has expanded towards providing a comprehensive architecture for agentic security.

This unified approach begins with securing machine identities and credentials, incorporates deep observability of agentic footprints, and extends to the endpoint, where we analyze behavioral intent. By funneling this traffic through our AI gateway, we ensure that security policies are enforced in real time across every interaction.

Prisma AIRS achieved a remarkable milestone in Q4, surpassing $100 million in ARR within just four quarters of general availability, marking the most rapid scale out of any product in our history. Our momentum is reflected in a growing base of over 800 customers for this product, with the majority of our largest transactions now featuring multimodule adoption in Q4.

We're also seeing significant early validation of our agentic endpoint strategy following the Koi acquisition. We believe the endpoint is reaching a critical inflection point as AI [dev tool?]

development tools migrate to the desktop environment. This shift creates an expanded surface area where agents autonomously manage files and access sensitive credentials.

Legacy security tools often remain blind to the underlying intent and reasoning behind these machine-speed actions. In this landscape, visibility without action is insufficient.

Our platformized approach delivers end-to-end transparency from the initial prompt to the final execution, enabling in-line prevention in machine speed. This capability is becoming a fundamental requirement for the enterprise.

We've already secured over 100 logos, representing a 2.5x increase since finalizing the Koi integration earlier this year. Ultimately, the synergy of detection and prevention is most effective when unified on a single platform, with XSIAM serving as a central nervous system for this critical telemetry.

Earlier this year, our Unit 42 researchers demonstrated the staggering speed of modern threats by simulating a comprehensive AI-driven attack in under 30 minutes. Contrast that with the industry standard defense report response of 4 days, and it's clear that legacy approaches are no longer sustainable.

Customers standardizing on XSIAM are transforming their operations, reducing their mean time to respond to less than 10 minutes, a massive leap from the days or weeks required previously. As we continue to our relentless push towards true real-time defense, in the fourth quarter, XSIAM maintained its exceptional momentum, concluding the year with over $700 million in ARR, up 70%, while surpassing the 1,000th-customer milestone in the platform.

The power of our architecture lies in the fact that live telemetry is already resident within XSIAM, allowing us to seamlessly unlock new value through our unified data lake. Expanding a deployment does not require the friction of new product integration; it simply involves querying existing data in new ways.

As of Q4, the majority of customers have have embraced this platform advantage, utilizing multiple modules, including exposure management and cloud security. Turning to observability, we continue to see the world's premier AI-native and cloud-first organizations standard on our technology.

The entire entities pioneering the AI frontier generate telemetry at a scale that traditional tools cannot withstand. Chronosphere has engineered specifically for these massive data volumes, capturing every training run and agent loop.

This quarter, we signed a $20 million deal with a hyper-growth AI inference provider that pro processes tens of trillions of tokens a day. This is no longer There's no stronger validation of our platform than when the architects of the AI ecosystem trusts us to monitor their own infrastructure.

Since finalizing the Chronosphere acquisition in Q2, our observability ARR has more than doubled, eclipsing the $500 million mark. This performance has significantly outperform outperformed our initial targets and represents the most rapid post-acquisition scaling in our history.

Our cross-sell strategy is delivering tangible results, with XSIAM contributing to 50% of net new Chronosphere logos this quarter through multiple seven-figure agree agreements. We are further enriching this stack with the acquisition of Embrace, integrating real-user monitoring to complement our core metrics, logs, and traces.

This expansion enables us to provide a comprehensive end-to-end observability platform that spans from the core infrastructure to the final user experience. Collectively, XSIAM and observability now represent over $1 billion in ARR, a remarkable achievement for data-intensive platforms that were not part of our portfolio just a few years ago.

A cornerstone of our success throughout my tenure at Palo Alto Networks has been our ability to identify premier technology and world-class talent and seamlessly integrate them into our culture. While the complexity of our integration efforts naturally increased the scale of this year's acquisitions, the result has been extraordinary.

In Q4, this success was most evident in our performance with CyberArk, or now called Ideera. Just two quarters after finalizing our largest acquisition to date, we are accelerating growth while capturing synergies ahead of schedule, a rare feat that demonstrates the power of our integration engine.

These results are a testament to the deep collaboration with our new colleagues. From a go-to-market perspective, our joint efforts yielded over 400 shared leads, driving more than 200 net new logos from our installed base.

We are also seeing a significant move towards larger commitments, with $5 million-plus TCV deals up 50% year-over-year in the fourth quarter. Yet the most significant challenge and opportunity remains the rise of agentic AI.

By definition, an agent possesses agency, necessitating creating a machine identity with the precise context and permissions required to execute its workflow. As enterprises deploy thousands of these autonomous entities, many remain outside of formal governance, often lacking properly scoped permissions.

This summer served as a wake-up call as rogue agents compromised environments at several frontier AI labs. In one notable instance, an agent escaped its sandbox and exploited system vulnerabilities because its access had never been properly restricted.

At its core, this represents a fundamental identity crisis for the enterprise. This is the strategic imperative behind our Ideera platform.

Ideera extends sophisticated identity security and privilege controls to AI agents, ensuring every machine action is authorized, scoped, and fully auditable. As we integrate these agentic controls via AI gateway into Prisma AIRS, we're empowering organizations to enforce security policies and maintain defense in real time.

Fiscal 2026 was a transformative year for Palo Alto Networks and broader industry. We remain convinced that the AI tailwinds catalyzing cybersecurity demand will only intensify as we look towards the future.

First, the global AI infrastructure buildout is drawing trillions in investment. We anticipate more capital expenditure in the next 5 years than the preceding two decades.

This massive expansion is fueled by demand that continues to outstrip supply. For AI to deliver on this promise, both traffic and data volumes must scale, and as they do, every bit requires inspection and every byte requires observability.

This surge in critical infrastructure is a prominent tailwind for cybersecurity, a trend already manifesting in the accelerated momentum of our network security and observability businesses this year. Second is the strategic imperative to transition towards real-time defense.

With cyberattacks now operating at machine speed, fragmented legacy tools are no longer viable. There is approximately $1 trillion of global cybersecurity debt that must be modernized to defend against automated threats because AI operates instantaneously.

This modernization must occur on unified platforms. Platformization is the only solution for real-time defense, ensuring that telemetry and policy are harmonized across every control point.

We're still in the early chapters of this structural change. Third, AI has inaugurated inaugurated a fundamentally new market for cybersecurity.

The rise of autonomous agents will dramatically expand the network surface area that requires fortification. Robust governance and security guardrails for AI have shifted from optional features to essential enterprise requirements.

While this market is evolving rapidly, we believe the future belongs to architectures providing end-to-end controls, a vision we are delivering through Prisma AIRS. Lastly, I do want to mention, in breaking news, we closed our acquisition of Console today.

Console brings an AI-first approach to product development in the IT and security operations space. Andre and his team are going to work as part of our Cortex effort to agentify our capabilities and drive us faster into the AI era.

I want to welcome both the Embrace and Console teams, acquisitions we closed this quarter to Palo Alto Networks. As we move into fiscal 2027 with significant momentum, we understand that our continued leadership must be earned through disciplined execution every quarter.

I want to express my gratitude to our employees for their performance during this milestone year and to our customers for their enduring partnership. With that, let me hand over to Dipak.

Thank you, Nikesh, and good afternoon, everyone. We delivered a strong close to a record year, driven by the broad-based strength across our platforms and the early success of our integration efforts.

Our teams executed with discipline, and we exceeded guidance across every metric. Before walking through the details, please note that I'll be speaking to our results both on a reported and a pro forma basis to provide a normalized growth comparison where applicable.

All growth percentages will be on a year-over-year basis unless stated otherwise. Starting with the top line, Q4 RPO exceeded $20 billion for the first time, ending the year at $21.2 billion, up 34%.

Our bookings growth accelerated for the second consecutive quarter on a pro forma basis, driven by the success of our platformization strategy. Current RPO reached $9.3 billion, also up 34%, as contract durations remained steady year-over-year.

We also delivered a record result in NGS ARR, which reached $9.1 billion in Q4, up 63%. As Nikesh highlighted, most notable was the nearly $1 billion of net new NGS ARR in Q4, which almost doubled year-on-year and is a milestone that only a select category of technology companies have ever achieved.

I still recall my first quarter as CFO in Q3 of fiscal '21, when we surpassed $970 million in total NGS ARR. We've now added approximately that amount in a single quarter.

That's a testament to the multiple growth drivers in our business. Five years ago, SASE was still in its infancy, and XSIAM had not yet launched.

Today, those have either surpassed or are approaching $1 billion ARR businesses. To provide more visibility into our growth drivers, we're introducing new revenue disclosure by platform, as I previewed last quarter.

Those three platforms are Network and AI Security, Cortex, and Ideera. We've provided historical periods as well as product composition for these platforms in the appendix of our earnings presentation published on our website.

Before diving into our revenue by platform, please note that Network and AI Security includes the certificate lifecycle management business we acquired with CyberArk, which has since been rebranded to Next-Generation Trust Security, or NGTS. NGTS contributed approximately $85 million to Network and AI Security revenue in fiscal year '26.

Additionally, the revenue by platform I will discuss excludes certain items like professional services, which are reported in the category titled Other, as shown in the earnings presentation appendix. Let's start with Network and AI Security.

Our revenue here grew 17% for the full fiscal '26, reaching $8.35 billion in revenue. We continue to deliver above-market and double-digit growth in network security, which speaks to our strong competitive position and the large market opportunities still ahead of us in our largest platform.

As an example, we continue to gain share in SASE, with bookings and ARR growing well ahead of the overall market. Our software firewall business accelerated once again, reaching 29% ARR growth in Q4, and Prisma AIRS surpassed $100 million in ARR within its first year of general availability.

Finally, we had another strong quarter in our hardware firewall business, driven by the adoption of our latest Gen 5 appliances. Turning to Cortex, which includes our security operations and observability platform, revenue grew 25% in fiscal year 2026 to $1.92 billion in revenue.

As noted earlier, XSIAM continues to be a key driver of Cortex, with ARR growing 70% in Q4. On the observability side, our ARR surpassed $500 million and more than doubled since we closed the acquisition of Chronosphere in Q2.

Keep in mind, and as we noted last quarter, our Q4 net new ARR includes a nine-figure benefit from a large LLM customer migrating to Chronosphere from an incumbent vendor. Lastly, we have Ideera, which consists of our identity security platform from the CyberArk acquisition closed in early fiscal Q3.

As noted earlier, Ideera excludes revenue from certificate lifecycle management acquired from CyberArk. On a pro forma basis, Ideera revenue reached $1.26 billion in fiscal year '26 and grew 21%.

Our bookings grew faster than revenue in Q4, which is a testament to our early integration success and go-to-market collaboration. In total, our revenue grew 34% to $3.41 billion in the fourth quarter.

For the full fiscal year, revenue reached $11.5 billion, up 24% year-over-year. From a geographic perspective, we delivered robust growth across all of our regions.

The Americas was up 33% year-over-year, EMEA was up 39% year-over-year, and JAPAC JAPAC was up 34% year-over-year. Moving down the P&L, total gross margin in Q4 was 74.8%, down 100 basis points year-over-year.

For the full fiscal year, gross margin was 75.8%, down 60 basis points year-over-year. This decline reflects a mix shift towards our faster-growing SaaS offerings, which continue to scale with our platforms and have yet to reach their gross margin maturity.

Looking ahead, the growing majority of revenue is cloud and SaaS, and we anticipate that mix shift will drive our cloud hosting costs faster than total revenue in fiscal year '27. Turning to the supply chain, we expect rising commodity costs to persist in our hardware business, particularly as it relates to memory and storage.

As a reminder, while we're pleased with the strength that we're seeing in our hardware demand, revenue from hardware represents approximately 10% of the total company. We continue to manage our component cost exposure through our strategic supplier relationships and selective pricing actions across our portfolio of hardware products.

Ultimately, our primary focus remains on optimizing the business for total operating income and margin, and this focus was reflected in our Q4 results and our full-year results. Q4 non-GAAP operating margin came in at 29.6%.

For the full fiscal year, we achieved operating margin of 29.2%, an increase of 40 basis points year-over-year. This annual expansion is particularly notable as it includes a partial year of our largest acquisitions, which operated at much lower operating margins as stand-alone entities.

We're making excellent progress on this front. Regarding CyberArk synergies, our integration synergy targets remain 3 to 6 months ahead of plan.

Looking ahead to fiscal year '27, we anticipate higher cost of goods sold will be more than offset by continued operating leverage as we scale efficiently, efficiently and deliver on M&A synergies. Our focus on operating leverage drove Q4 non-GAAP EPS of $1.02, exceeding the high end of our guided range by $0.04.

Adjusted free cash flow for the fourth quarter reached 1.99- the uh sorry, reached $1.29 billion, growing 35% year-over-year. For the full fiscal year '26, adjusted free cash flow was $4.41 billion, delivering a margin of 38.4%, an increase of 40 basis points year-over-year.

As a result of our strong free cash flow generation, we ended fiscal '26 with a robust balance sheet, including $7.9 billion in cash, cash equivalents, and short-term investments. Stepping back over the past 3 years, we've proven our ability to deliver durable and profitable growth.

Our execution has driven over 500 basis points of operating margin expansion. We've achieved this whilst capturing market share across new categories, driven by our industry-leading R&D investments.

Our operating leverage has also translated directly to cash flow. Adjusted free cash flow margin has been 38% or better in each of the last 4 years.

We sustained the strong cash flow generation even while absorbing the impact of large M&A and as our customers moved increasingly from multiyear to annual billing. This track record of scaling profitably is the bedrock of our financial model.

It provides us with the ability to to neutralize potential cost headwinds while simultaneously fueling our innovation engine, our ultimate competitive advantage, and the catalyst for our customers' platformization journeys. Looking ahead, we continue to have increasing visibility into our free cash flow.

This has been driven by a combination of steady operating margin expansion as well as a smooth transition to deferred or annual billing in our core business. To provide some context, annual billings increased significantly from 6% of bookings in fiscal '20 to 27% in fiscal '25.

Now we're seeing a steadier rise, with the percentage of annual billings having increased by low single digits year-over-year in fiscal '26 to about 30% of total bookings. With this structural transition now largely stabilized, we have highly predictable compounding cash engine going forward.

This cash flow visibility, paired with our continued focus on margin expansion and durable double-digit bookings growth, reinforces our confidence in achieving our 40% free cash flow margin target in fiscal '28. Before we turn to guidance, I also want to step back and frame the growth opportunity ahead.

As I mentioned earlier, our industry-leading R&D investment over the years has fueled our innovation engine and expanded our market opportunity into new categories. That ongoing commitment has earned us leadership recognition in nearly every major category that we operate in.

What began predominantly as a stand-alone firewall business is now a platform with multiple billion-dollar ARR businesses and several more approaching that milestone. We continue to remain underpenetrated against our total addressable market of $340 billion by 2030.

We believe that AI will not only will will only expand our opportunity whilst reinforcing the need for platformization and real-time cyber defense. This puts us on track to achieve our target of $20 billion in NGS ARR by fiscal year 2030.

With that long-term framework in mind, let's turn to our Q1 and our fiscal year '27 guidance. Note that our recently closed acquisitions of Console and Embrace are immaterial to our fiscal year '27 guidance.

For the first For the fiscal first quarter 2027, we expect for Q1, we expect NGS ARR of $9.54 billion to $9.56 billion, or 63% growth. We expect RPO of $20.8 billion to $20.9 billion, or 34% to 35% growth.

We expect revenue of $3.3 billion to $3.31 billion, or 33% to 34% growth. Fully diluted share count of 837 million to 844 million shares, and diluted non-GAAP EPS to be in the range of $0.96 to $0.98 share.

For the fiscal year 2027, we expect NGS ARR of $11.075 billion to $11.175 billion, or 22% to 23% growth. We expect RPO of $25.2 billion to $25.4 billion, or 19% to 20% growth.

We expect revenue of $14.1 billion to $14.2 billion, or 23% to 24% growth. We're guiding operating margin of 29.5% and diluted non-GAAP EPS to be in the range of $4.16 to $4.19 um per share.

Fully diluted share count of 844 million to 847 million shares and adjusted free cash flow margin of 38%. We've included our typical modeling points in the appendix of our presentation for your review, but I would like to point out a few things.

First, as previously mentioned, our fiscal year '26 net new NGS ARR included a nine-figure benefit from a large LLM customer migrating to Chronosphere from an incumbent provider. Our outlook assumes the tail end of this migration will last through Q1 of fiscal '27 and that the net new ARR contribution from this migration will be less than what was added in Q4.

This will impact the seasonality of the net new NGS ARR in fiscal '27, making Q1 larger than normal. We expect 60% to 61% of the net new NGS ARR to fall in the second half of fiscal year '27.

Second, while we do not intend to give revenue guidance by platform, we are providing initial modeling points to help you establish the revenue growth trajectory for each of the platforms within the context of our total company guidance. For fiscal year '27, we expect Network and AI Security revenue growth of low double digits year-over-year.

We expect Cortex revenue up approximately 30% year-over-year. We expect Ideera revenue of approximately $1.5 billion, representing pro forma growth of high teens to 20% year-over-year.

With that, I will turn it back to Hamza for Q&A.

Okay. Thank you, Dipak.

Um Please ensure uh that uh only one question is asked by each analyst. Uh First question will be Rob Owens uh from Piper Sandler, followed by uh Brian Essex from J.P.

Morgan.

Great. Uh thank you, Hamza, and and thank you, guys, for taking my question.

Uh Nikesh, your prepared remarks spoke uh to a lot of the tailwinds that you guys are seeing across cyber right now, and I think that was evidenced in your your booking strength, and you mentioned the second straight quarter of acceleration, but this has been uneven um throughout the environment. Obviously, scaled players and players with uh breadth of coverage really has mattered here.

To that end, as you look at the new fiscal year, how are you thinking about M&A? How are you thinking about something else that could be transformational to Palo Alto, just given that the market is shifting so quickly, and while you have had an ability to take advantage of it uh given what you've done in the past, uh what are you contemplating moving forward?

Thanks.

Rob, thank you for your question. Uh I'll just send you the names of the companies so it makes it easier.

I don't have to answer them in such detail.

You

appreciate that, right? Now look,

We appreciate that.

as I've always maintained that, M&A is not a strategy. M&A is a consequence of stuff what we do from a product development perspective.

To give you a sense, if you, you know I talked about the three major pivots we've seen in AI already in the last 7 months. We've seen people go from LLMs to agents to now open-weight models.

Every one of these technological shifts on the customer side obviously requires a slightly different security architecture. How do you protect these agents?

How do you ensure that open-weight models are protected, agents don't go rogue? Obviously, we have a point of view internally, and we're building towards that from a product development perspective, but sometimes you can get caught flat-footed because you're going down one path, and suddenly the market shifts elsewhere.

This is where I, we have the privilege of looking at the entire cybersecurity landscape and seeing 40 or 50 companies that have been funded in this category, and then you suddenly realize that some other company had the strategy right, and that's when you step in and make an acquisition. The acquisition happens because they've got a technology trend right, and we'd rather embrace it quickly and get on that so our customers can have that capability much faster.

Because honestly, as you can see, after Mythos, what has happened is customers are willing to experiment with a lot of AI implementations, but before they deploy, they want to ensure a robust security harness around it. The most sort of common questions we get are, what do I do about the vulnerabilities that Mythos' going to find in my environment?

How do I solve it today? How do I follow-up for the long term?

Or what happens if we deploy agents and our agents go rogue? How do we make sure our agent doesn't go running to Hugging Face?

Excellent. Thank you.

All right, thank you, Rob.

I'll keep your request, and I'll send you the company's name as soon as I buy it.

I appreciate that.

All right. Thanks for the question, Rob.

Uh next, we have uh Brian Essex from J.P. Morgan, uh followed by Saket Kalia from Barclays.

Hey, great. Thanks for taking that question.

Um Nikesh, I'd love it's great to see the acceleration in CyberArk performance. Um and and only 200 net new logos from the from the um Palo Alto installed base.

W- Would love to get a sense of, what those conversations are like, how big are those deals relative to the rest of the CyberArk platform, and you still host a substantial amount of your installed base. I think a lot of people focused on the cost synergies.

They forget about the revenue synergies. Um how much penetration do you think you can get into your installed base with the the CyberArk platform?

Thank you.

Look, I'm really excited about CyberArk. Uh I think if you look at both ends, and you've rightfully articulated, uh we have been able to really uh hit the ground running on the cost energy side.

You've seen that our margin is reverting back to what our stand-alone margin was in just about two quarters. We think we'll be at a stable point coming into the next quarter.

To be able to transform a large company like CyberArk in 9 months and get their margins up by 1,000 basis points or more is already good work on the cost side. Like you said, we didn't buy it because we had cost energy.

We bought it because we felt there was a need in the market for uh identity security, and this was an inflection point. Mhm.

I think the phase one from our perspective was, don't break it, accelerate their their momentum. You've seen we've began we've been able to do that.

Uh we just hired a new leader last quarter, uh Sunny Singh. He's right now at our sales conference in Asia uh rallying the troops in CyberArk.

Uh the team has taken really well to joining Palo Alto. I think there's been phenomenal collaboration between the two teams.

I'm excited we just launched a new product called Modern PAM. CyberArk was in traditional PAM.

Modern PAM is a expansion category for PAM, something they hadn't spent a lot of time on before. Uh the product team at CyberArk has been or Ideera now, I should say, has been amazing at being able to embrace it.

That product is generally available now. We expect to try and upgrade all of the existing traditional PAM customers to that.

There's a lot of activities we have going on in both on the upsell and expansion side as well as the net new sales side. As long as we can, run at a faster growth rate than CyberArk ran individually, independently, and expand the margin by 11 or basis points, I think that's a phenomenal acquisition for us, not to mention that they have a pole position in being able to help with non-human identities and agents going forward because that is a whole new field where there is no established leader.

Got it. Very helpful.

Thank you.

All right. Thank you, Brian.

Next, we have Saket Kalia from Barclays, followed by Fatima Boolani from Citi.

Great. Hey, guys.

Thanks for taking my questions. Great finish to the year.

Um Nikesh, maybe maybe for you, you've you've said that Mythos isn't a moment, but it's rather the beginning. Maybe the question here is how are you seeing buying behavior change as as the AI threat becomes the new normal?

What I mean by that is, do you see more of a willingness to platformize? Do you see more pipeline growth than you would expect?

Do you see more appreciation for value, less sensitivity on pricing? I guess I'm just curious if you can translate this new beginning to some of the deal dynamics that you saw in the quarter or the last couple quarters.

Uh

please make sure the sweets show up at Hamza's house a week before. Otherwise, you won't get your first spot to ask questions in the future.

Uh in terms of the momentum Look, I did say Mythos is the beginning because what is happening is I mean so I tried for 8 years to try and get CEOs' interest in cybersecurity. I couldn't, but Dario did a phenomenal job by having Mythos because every CEO now wants to talk about what does this mean to us, how do we get access to it, how do we test ourselves from a vulnerability perspective.

They're wise. They sit there and say, "Listen, I get it that this is the new normal.

People will be able to find vulnerabilities much faster. How do I solve this problem in the long term?"

That's really where the conversation starts about the only way to solve this problem in the long term is if something escapes past your perimeter, you got to find it quickly and shut it down. That talks about modernizing their cyber estate, that talks about platformization, that talks about having a AI-driven SOC.

That's why we've been able to have so many conversations around the modernization of infrastructure, and every conversation is not about fragmenting their estate and buying yet more smaller vendors, it's more about finding a consolidated way of sort of standardizing on a platform, evaluating a platform. I think this is a big tailwind for the larger players in the in the sector.

I don't think this is a moment where uh, you will see, obviously, startups with some unique products, niche products, which they are able to bring to market faster, which customers will use in the interim, but I think this is definitely a long-term, I'd say, duration-changing trajectory change to our growth rate. Because you think about it, open-source models are now already able to compete with the capabilities of Mythos, and we this thing's going to get better, not worse.

If that happens and this capability becomes commonplace, we have a short window by when to get all the cybersecurity technical debt, which hasn't been paid for so many years, back to up to the mark. I I suspect there will be some major breaches over the coming years because customers have not been able to get their transformation act in place, and that's generally going to be a tailwind for all of us in this space.

Very helpful. Thank you.

Okay. Thank you, Saket.

Uh next, we have Fatima Boolani from Citi, followed by Matt Hedberg from RBC.

Thank you for taking my question. Um Nikesh, you brought up this concept of technical debt.

I wanted to zoom out and ask you a question in the context of something you announced earlier this week or a couple weeks ago: Frontier AI Critical Defense. One thing we haven't necessarily heard you talk about is this notion of operational technology and the use case here, potentially gaining critical mass, and especially in the context of your own platformization strategy.

Now that we know what the the models are capable of in terms of insane vulnerability chaining against a part of your technical environment that has historically been underinvested in, again with a lot of technical debt, um what are some of the gating factors here still for you to be able to accelerate wallet capture? Then relatedly, how does that cooperation versus competition continuum with some of the frontier lab partners that you have get expressed in in this market opportunity with OT that seems like it would be ripe for for more capture?

Look,

Fatima, a lot of questions in there. Look, first and foremost, I think 9 months ago we were all guilty and convicted of near death at cybersecurity and software because a Frontier AI was going to eat all of our lunch and breakfast and dinner.

Clearly, in the last 6 to 9 months, it's become apparent that that's not happening. We're all going to be enjoying this feast together.

We've seen both uh OpenAI and Anthropic, and even Google come to the table in terms of partnerships. We have early access to these models.

We are able to test them, and we'll test their cybersecurity capabilities. As I said in my prepared remarks, we are the we were the first or are the first commercial partner allowed to use Mythos as part of our testing harness.

We already use OpenAI 5.6 as part of our testing harness. We are able to build bring multiple models to customers because the customers are quickly disenchanted from this notion of finding more vulnerabilities.

They want to know, "What do I do about them?" The last thing they want is more security problems.

They have enough already. The conversation is quickly shifting from what do I do about this, and in that conversation is where the need for platforms, as I was mentioning earlier, comes up.

In terms of OT specifically, I think the challenge is even more pronounced because OT is hard to patch. Even if you found a vulnerability in an OT instance or deployment, you, imagine patching an oil rig out in the ocean, or imagine patching uh a bunch of technology which does not have remote access, cannot be remotely patched, you'd have to go there and fix it.

The good news is, Lee's not here this week, I'm going to do Lee right now. We have actually built a capability where we can build signatures for OT vulnerabilities and open-source vulnerabilities and deploy them in under 4 hours.

We can find an open-source vulnerability and OT vulnerability, deploy the fix in 4 hours, and propagate that to our software and hardware firewalls, so that will stop the bad actors in their tracks, uh which is a far cry from the current standard of 55 days. Takes 55 days to patch open-source vulnerabilities or OT vulnerabilities in the wild.

This will allow our customers to have the ability to block the bad actors for any network-related OT or open-source vulnerability in under 4 hours. It's a good thing you asked me what the gating factor was.

The gating factor is really the customers uh taking the time to understand what major changes do they need to make, doing POCs, assessing what the environment looks like, thinking about who they want to deploy, then eventually getting down to deployment. Uh this is not something customers are they take their time to go to the deployment.

That's why I think it's a long-term tailwind, and we will start seeing that in constant sort of, overperformance in the industry on a quarterly basis, but it's not going to be, coding agent-style ARRs that we're seeing in the AI space, which I'm envious of, but

Good Lee answer, but not good sideburns, Lee sideburns.

That's easy to fix.

Okay. Thank you,

uh

Fatima, for the questions. Um Uh next, we have Matt Hedberg from RBC uh followed by Michael Turrin from Wells Fargo.

Thanks, thanks, Hamza. Uh Nikesh, you guys have a long-standing vision of being the number-one vendor in a category.

You don't enter a market unless you think you can be the share leader. I guess, putting putting Lee's hat on again, you've had a lot of success obviously in observability with stand-alone Chronosphere, you added Embrace, synthetic- or you developed synthetics.

Where are you from a functionality perspective now versus some of the, sort of the historic market leaders there? How much of this is share shift versus just like this market's just getting bigger with AI, and and we think we can take a a a lion's share of it?

Look, the the premise uh of Chronosphere has been that it was designed for the AI era. It is a net new technology.

The premise of Chronosphere is that because of the large volumes of data that are being sort of, spit out in the observability space, it is designed as a architecture that allowed you to have a lower total cost of ownership. Chronosphere is, on average, 30% or 40% cheaper than any of the leading incumbent observability solutions out there.

From a parity of capability perspective, now we started off being very good from an AI-native perspective from traces, logs, and metrics. The majority of Chronosphere's customers are uh AI-native customers, including a very large frontier AI lab.

Uh with the absorption of Embrace and the development of synthetics, that will put us at par with some of the leading players on across sort of capability perspective, which allows us to go after the enterprise space. That'll allow all the Palo Alto sellers to start selling.

For now, we're restricting Chronosphere just to AI-native sales because it's where it's most suited. I expect, the next 6 months, we'll get to a point where Chronosphere will be a competitive product in its category vis-a-vis other enterprise players.

Then we have both an AI-first capability as well as cost advantage. That should allow us over time, as the space normalizes, to have a multibillion-dollar ARR business.

I'm very excited. It's it's we bought it when it was $85 million ARR, it's already crossed a half a billion in ARR.

We can clearly see the line of sight for that to keep getting bigger over the next few quarters, and then hopefully address the enterprise market with it as well. Because remember, for us to reach our aspirations of a bigger business, we need to have multiple multibillion-dollar ARR businesses.

Observability is such a TAM, SIEM is such a TAM, and obviously, our network security business and identity business are similar TAMs.

Thank you.

Thank you, Matt. Uh next, we have Michael Turrin from Wells Fargo, followed by Gray Powell from BTIG.

Thanks very much for taking the question. Great close to the year.

Maybe just on the initial fiscal '27 guide, um I'm curious how you approach that exercise given the inflection points taking shape across cyber. You mentioned three major AI inflections you've seen form or so early in the overall 2027 cybersecurity budget discussions.

Maybe just walk us through what you're assuming as a baseline and any key drivers of upside you see on the horizon we should focus in on as well. Thank you.

Michael, we take the guidance very thoughtfully. We look at where you are from a consensus perspective.

We make sure we look at the underlying business plans of our businesses, evaluate if we are able going to be able to meet, beat, or exceed your consensus. We're delighted to see that we expect, with our execution and the tailwinds, we are going to be able to exceed your consensus, and that's how we guide.

It's very clear. We look forward to it.

Yeah. No, I I I think, Michael, look, we we we do look at a lot of different inputs.

If I just look at a number of the different trends, we will look at what's happening to pipeline. Are we seeing traction?

Do we see a trend in terms of what's going on with some of the new uh areas that we have? We take all of that, ingest it all, look at the resource requirement required for territory planning, et cetera, et cetera.

Um and that's effectively how we do it. It's It's a pretty well-established uh world-class process.

I wouldn't say much has changed from a process point of view in the in the last 5, 6 years that I've been here as the as the CFO. I think we've been pretty pretty transparent, and there have been a number of inflection points that we've been able to kind of like capture within our forecast criteria.

Thank you.

All right. Thank you, Michael.

Uh next, we have Gray Powell from BTIG, followed by Meta Marshall from Morgan Stanley.

All right. Thanks for Thanks for taking the questions, and uh congratulations on the uh really strong results.

Uh so I I just want to make sure that I was looking at something correctly. I I think, last quarter, you called out $200 million uh in competitive SASE displacements for the last 9 months.

Uh this quarter, that number jumped to $450 million. I I just want to make sure that those are comparable [put?]

statistics cuz, if so, you've probably had a really big Q4. Um, I Either way, what's um Either way, the numbers are impressive.

What What What's uh driving the improved pace of displacements and just overall strength in SASE relative to peers here?

Gray, I think uh the number's $400, if I remember correctly. $450?

It's $450. Good.

Clearly, we had a good Q4. Uh that's evident in our number, yes, we did have a good Q4.

Um Look, the displacement is a consequence of two events. One, when SASE as a category came about early, it was very Internet-driven phenomena.

It was, Internet access-driven. COVID changed all of that.

When we hit the COVID mark, people wanted sort of access consistently both to their private access as well as the Internet access, which is where we come from. We come from the private access space, and obviously, our product on the Internet access space is now at par or far exceeds the competitive uh landscape we have in front of us.

It's really the the sort of integration of SASE with SD-WAN, which we were early in. We were the first player to go acquire CloudGenix, integrated that to our SASE fabric.

Uh Having our SASE fabric be consistent with our hardware and software firewall fabric allows our customers who use Palo Alto firewalls to actually gravitate towards our SASE solution as opposed to elsewhere. Not just that, it also makes it an easier choice if they're looking to consolidate and have one platform cuz they already are using our consoles, our Strata Cloud Manager, our services for the hardware and software firewall use case.

Then it doesn't feel like a big sort of change or to go adopt us on the SASE front as well, because they already also have our agents in many cases which do the VPN product is now a consistent agent with SASE. We've surrounded the SASE sort of incumbents with effectively a complete platform where the choice of make of course standardizing on our platform is a simpler choice for them if they choose to just replace the SASE piece, because they already have the other elements from us.

Sometimes it's that. Sometimes it's just, uh perhaps customers want to want to modernize their SASE infrastructure.

Just to clarify, Gray, it's like it was $200 year-to-date at Q3, and it's $450 for the full year.

All right, so that's It's a pretty big number for Q4. Uh thank you.

That That all makes a lot of sense.

Okay. Uh next, we have uh Meta Marshall from Morgan Stanley, and our last question will be Brad Zelnick from Deutsche Bank.

Great. Thanks.

Um Nikesh, you were mentioning kind of this addressing of the billion trillion dollars of technical debt. Platforms can help enterprises pay for that in some ways.

Um but just how do you think either about ways that you can help them in terms of professional services investment or other things that can help from just uh speeding up the amount of technical debt they can address in a compressed period of time? Thanks.

As Meta, a few years ago, when we launched the platformization strategy, we have had very clear models in the market where we're willing to take staggered payment or align their contracts or deploy before the existing vendor has to be replaced to drive faster platformization. We make all that available.

Honestly, the the constraint that you always run into is the customers always have a full deck. They're already working on a series of things that they would like to get done in their enterprise.

Today, with AI, there's a very large contingent of AI transformation that's out there. People want to transform customer support, they want to go do coding on aggressive basis, they want to deploy LLMs.

This is yet another priority that must be managed in the context of their overall priority. It's just a balance the customers strike.

That's why they don't go whole hog and say, "Let's go replace everything tomorrow." They do sit down and say, "Let's have a more cohesive and intelligent transformation plan."

As the transformation plans can take 5 years, it's too long. We got to get it done sooner.

You typically end up in the 1-, 2-, 3-range, but it's not something that gets done in one quarter. They want to sort of crawl, walk, run.

They want to get some stuff done as other vendors sort of fall off their their sort of end-of-life periods, or their contracts are for renewal. All I can say is the the desire to standardize or platformize on larger vendors where products are at par or better than the state-of-the-art in the market is becoming more and more of a trend, and that's generally in our favor.

Great. Thanks.

All right. Thank you, Meta.

Last, but certainly not least, we have Brad Zelnick from Deutsche Bank.

Wonderful. Thanks very much, Hamza.

Nice to see everybody. Nikesh, you have strong credibility doing M&A at this point, and today's Console acquisition seems directionally consistent with moving closer to autonomous security operations.

I can ask the simple why Console, but if you fast-forward 5 years and Palo Alto has succeeded beyond your wildest expectations, what's the most valuable activity that customers have completely stopped doing themselves because Palo Alto Networks is doing it for them?

It's a great question, Brad. I think five that's why I know why Hamza saves you for last.

Look, if you believe that we're going to spend $5 trillion of CapEx the next 5 years building data centers and AI capability, I have to believe that AI is going to be adding tremendous value to our lives in the enterprise space. Otherwise, it makes no sense to deploy $5 trillion in the ground.

I'm an optimist and believe that we will be using a lot of AI to do a lot of agentic tasks. If that's true, cybersecurity has to become less manual and more agentic and more done by us than the customers themselves, because the bad actors will be using AI from their angle, which means we have to make sure our customers are as agentified or AI-fied as the bad actors are.

Now that is not possible, as you're discovering in every industry category. You cannot deploy AI effectively until you have the right data in place.

The right training data, the right data, you have to break the silos and have things talk to each other. Now that leads itself towards a cohesive, unified data lake of some sorts, whether it's an enterprise IT data lake, an observability data lake, a security data lake.

If you see uh strategically where we have been pivoting the business over the last two or three years is we're a very data-first company. We ingest a lot of data on XDR, we're ingest 19 petabytes a day in the SIEM product already, and we have just barely north of 1,000 customers.

Uh We have observability data, which is now the data of an entire frontier LLM that is being ingested to provide them observability. We are becoming a data-oriented AI-first cybersecurity company.

Our aspiration is to reduce the amount of human intervention in the act of detection, prevention, and remediation in the cyberspace. If you would ask me, "What's that North Star?"

that's our North Star. The question is, how do we get there?

That's where the whole company is focused and trying to get there. If 5 years from now, if we were far exceeding our expectations of ourselves, I would be able to walk in to a company and say, "You want to replace X?

Guess what, I have agents that can understand your deployment. My agents will replace that product.

I can do that in under a week. When I deploy my product, you will need a lot less people, and our products will actually just look for validation from you and get the task done without having you to get into the nits and grits of how to configure things, what policies to write, because we've seen that across thousands of instances, and we can bring that intellectual knowledge to bear."

Today if we look at enterprise products, every enterprise product starts dumb for the next customer, despite being deployed for 100,000 customers. I think AI gives us the opportunity of learning from the multiple deployments we do and the multiple customers we have and act show up more intelligent for the next customer every time.

That's the aspiration we have.

Makes sense. Thank you.

Thanks, Brad.

All right, that concludes the Q&A portion of the call. I'll hand it back to Nikesh for any closing remarks.

Just want to take the opportunity once again to thank all of you guys for being here. Thank our customers, our shareholders, and all of our employees for what was a spectacular FY '26 for all of us at Palo Alto Networks.