Dive Brief:
- Palo Alto Networks Chair and CEO Nikesh Arora drew a clear line of demarcation between AI’s looming data security risks and the technology’s negligible threat to the cybersecurity industry, speaking during a Q2 2026 earnings call for the three months ended Jan. 31.
- “I’m still confused why the market is treating AI as a threat to … cybersecurity,” Arora said. “Despite the current sentiment about AI and software, we firmly believe that security is an enabling layer that allows innovation to move forward safely and at scale.”
- The cybersecurity vendor grew revenue 15% year over year to $2.6 billion during the quarter and saw annual recurring revenue for its AI-enabled Next-Generation Security platform increase 33% to $6.3 billion in Q2. “We are seeing a trend towards more consolidation, more platformization,” said Arora.
Dive Insight:
Palo Alto Networks is leaning on AI to bolster its defensive capabilities and drive growth in its core business and evolving partner ecosystem.
The company made several key moves to shore up its position in just the last three months, completing its acquisition of identity management platform CyberArk for an estimated $25 billion, shelling out $3.35 billion for observability platform Chronosphere and integrating its Prisma AIRS AI security platform with IBM, Salesforce and several other AI agent vendors.
On Tuesday, Arora announced the pending purchase of AI agent endpoint security platform Koi.
“Koi will enhance our endpoint capabilities … while also becoming an integrated part of our universal AI security platform, extending security and governance to autonomous agents at the device layer,” Arora said.
The company views AI adoption and the rise of agentic tools as an emerging opportunity, not a risk, for the cybersecurity industry.
“As AI becomes more pervasive across the enterprise, it expands the attack surface area, more agents, more infrastructure, more machine-to-machine activity and new classes of risk that simply did not exist before,” Arora said. “In that environment, security cannot sit on the sidelines.”
As the company solidified its platform-based cybersecurity strategy, it revamped its partner program earlier this month to “reward partners who deliver platform-centric security outcomes.” The NextWave Partner Program introduced higher partner incentives for selling its firewalls and security platforms, automated deal registrations and a partner development training fund.
The program moves beyond volume-based incentives to “incentives across the customer lifecycle, matching many peers and competitors,” said Rachel Brindley, senior director of channels at analyst firm Omdia, Channel Dive’s sister company. “It is also bringing its acquisitions into the program and incentivizing partners for selling the ‘platformization’ solution.”
Palo Alto Networks is focused on a wholesale integration of CyberArk and Chronosphere, Arora said Tuesday.
“We've been rigorously building and refining our integration plans and we're moving fast to put these plans into execution,” he said. “This includes aligning our go-to-market engines, we're already well underway on detailed account planning and aligned sales incentives to ensure our teams are collaborating from day one.”
