All In On Cybersecurity: The Choice Between Palo Alto Networks or Crowdstrike Not Difficult
- PANW
- CRWD
Quick Read
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Palo Alto grew revenue 34.5% and trades at 94x forward earnings; CrowdStrike posted record ARR growth of 51% but commands a steep 208x multiple.
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Palo Alto’s 38.4% free cash flow margin targeting 40% by FY28 offers stronger value at less than half CrowdStrike’s forward multiple.
Palo Alto Networks (NASDAQ:PANW) and CrowdStrike (NASDAQ:CRWD) reported within a week of each other. Both cited AI driving security to the top of the CIO agenda. Palo Alto closed fiscal 2026 on September 1 after acquiring identity and observability products. CrowdStrike reported on August 26 with record quarterly results built on its Falcon platform.
Acquisitions Power Palo Alto While Flex Fuels CrowdStrike
Palo Alto’s revenue rose 34.5% YoY to $3.41B, and Next-Generation Security ARR climbed 63% to $9.10B. The CyberArk deal contributed an identity platform with $1.26 billion in pro forma revenue. The company added about 220 net new platformizations, and Prisma AIRS passed $100 million in ARR within four quarters. Gross margin slipped to 74.8% as the mix shifted toward maturing SaaS products.
CrowdStrike’s net new ARR hit $332.8M, up 51%, its best ever. Falcon Flex ARR doubled to more than $2.29B. Customers who switch to Flex add more than 40% in ARR on average, which shows the model works as an upsell engine. CEO George Kurtz called it “the best quarter in CrowdStrike’s history.”
One Buys the Map While the Other Draws It
Palo Alto’s message: “Platformize and fight AI with AI.” It now sells firewalls, SASE, identity, and observability. CrowdStrike runs everything through one agent. Kurtz calls Falcon “cybersecurity’s infrastructure layer for AI adoption,” with Project QuiltWorks partners working on nearly $400 million of deals together.
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