Palo Alto Networks announced that it will buy back all of CyberArk’s 0.00% convertible senior notes due 2030 for cash, a move that follows the closing of the CyberArk acquisition on February 11 2026.
The notes, issued on June 5 2025 and settled on June 10 2025, were part of the financing for the $25 billion deal. The original offering was $1.1 billion, upsized to $1.25 billion after the exercise of the initial purchasers’ option, and the repurchase will eliminate the entire principal balance.
The acquisition of CyberArk was intended to make identity security a core pillar of Palo Alto’s platform, positioning the company to protect human, machine, and AI identities in an increasingly threat‑heavy environment.
In its fiscal 2026 Q2 earnings, Palo Alto reported revenue of $2.59 billion, up 15% year‑over‑year, and non‑GAAP EPS of $1.03 versus the $0.94 consensus estimate. Next‑generation security ARR rose 33% to $6.33 billion and the non‑GAAP operating margin held at 30.3%. CEO Nikesh Arora highlighted strong demand for SASE, software firewalls, and early AI security offerings, while CFO Dipak Golechha emphasized operational focus on integrating CyberArk and Chronosphere.
The repurchase of the convertible notes is part of that integration effort. By removing the notes from the balance sheet, Palo Alto aims to streamline its capital structure, reduce debt exposure, and improve credit metrics, thereby supporting the company’s long‑term financial flexibility.
Investors reacted negatively to the company’s forward guidance, which reflected higher integration costs from the CyberArk acquisition. Analysts cut price targets in response to the weaker profit outlook, underscoring concerns about the near‑term impact of the deal on profitability.
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