成果超越；宣布收购Chronosphere以把握新的增长机会

acquisition of Chronosphere totap new growth opportunity Results beat; announcedacquisitionofChronosphere totapnewgrowthopportunity Target PriceUS$236.70(Previous TPUS$226.80)Up/Downside27.9%Current PriceUS$185.07 Palo Alto Networks (PANW) announced1QFY26(Jul year-end) results: revenuewas up15.7% YoY to US$2.5bn,0.5% ahead of Bloomberg consensus, andnon-GAAP net income reached US$662mn, up21.5% YoY and4% better thanconsensus.Post results, we lift FY26-28E revenue/non-GAAPnet profitby 0-1%/2% each to factor in better-than-expected product revenue growth andoperating efficiency improvement. ForFY26E, we are anticipating 14/18%growth in revenue/non-GAAP NP (was 14/15%), and an unchanged FCF marginat 38.4%.PANW announced its intent to acquire Chronosphere,a next-generationobservability platform for the AI data center era,for a totalconsideration of US$3.35bn.We believe the level of valuation is partiallyattributable to the fact that Chronosphere is seeing strong ARR growth, andthat US Software & IT Services Saiyi HE, CFA(852) 3916 1739hesaiyi@cmbi.com.hk Ye TAO, CFAfranktao@cmbi.com.hk Wentao LU, CFAluwentao@cmbi.com.hk Solid 1QFY26 results.In1QFY26, subscription and support revenue grew14.3% YoY to US$2.0bn,inline withconsensus, and accounted for82.5%of PANW’s total revenue (1QFY25:83.5%), while product revenue came in3% ahead of consensus. Next-Generation Security (NGS) ARR reachedUS$5.85bn by end-1QFY26, up29.4% YoY (1QFY25:40.1%; 4QFY25:32.2%). Non-GAAP OP reached US$746mn, and translated intoa30.2%non-GAAP OPM, up1.4ppts YoY and 1.0ppts better than consensus, drivenby more optimized-than-expectedsales and marketing spend. We estimate Joanna Ma(852) 3761 8838joannama@cmbi.com.hk NGS productssaw solid revenue growth.In terms of key operatingmetrics: 1) thenumber of active SASE customers reached~6,800 in1QFY26, up18% YoY(4QFY25:18% YoY; 1QFY25: 22%), andSASE ARRrecorded 34% YoY growth(4QFY25:35% YoY);2)XSIAM now has ~470customers, up >150%YoY.Managementguided for US$6.11-6.14bn NGSARR in2QFY26E, implying28%growthYoY, and lifted end-FY30E NGSARR guidance to US$20bn (was US$15bn), driven by strongorganic Platformization on track to meet long-term goal.As of end-1QFY26,PANW achieved ~1,450totalPlatformizations with ~60net new adds QoQ.Managementhighlighted continuous large deal wins which continuesvalidating the Platformization strategy:the number of accounts with AnnouncedacquisitionofChronosphere.ManagementnotedChronosphere has generated ARR of over US$160mn as of the end-Sep2025, up triple digits YoY. The US$3.35bn valuation offered by PANWimplies a 20.9x multiple ontheARR as of end-Sep 2025,which in our view Source: FactSet 2QFY26 guidanceinline with consensus.Management expects: 1) totalrevenueofUS$2.57bn-2.59bn, up 14-15% YoY, inline withconsensus; 2)diluted non-GAAP EPSofUS$0.93-0.95(consensus: US$0.93), implying Disclosures& Disclaimers AnalystCertification The research analyst who is primary responsible for the content of this research report, in whole or in part, certifies thatwith respect to the securities or issuerthat the analyst covered in this report: (1) all of the views expressedaccurately reflect his or her personal views about the subject securities or issuer; and (2)no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific views expressed by that analyst in this report.Besides, the analyst confirms that neither the analyst nor his/her associates (as defined in the code of conduct issued by The Hong KongSecurities and Futures Commission) (1) have dealt in or traded in the stock(s) covered in this research report within 30 calendardays prior to the date of issue of this report; (2) willdeal in or trade in the stock(s) covered in this research report 3 business days after the date of issue of this report; (3)serve as an officer of any of the HongKong listed companies covered in this report; and (4) have any financial interests in the Hong Kong listed companies covered in this report. : Stock with potential return of over 15% over next 12 months: Stock with potential return of +15% to-10% overnext 12 months: Stock with potential loss of over 10% over next 12 months Important Disclosures There are risks involved in transacting in any securities. The information contained in this report may not be suitable forthe purposes of all investors.CMBIGMdoes not provide individually tailored investment advice. This report has been prepared without regard to the individual investment objectives, financial positionor special requirements. Past performance has no indication of future performance, and actual events may differ materially from that which is contained in thereport.The value of, and returns from, any investments are uncertain and are not guaranteed and may fluctuate as a result of their dependence on theperformance of underlying assets or other variable market factors.CMBIGMrecommends that investors should independently evaluat