Palo Alto Networks surpassed Wall Street’s fiscal third-quarter results as artificial intelligence threats drive demand for sophisticated cybersecurity tools.

Shares rose as much as 12% in after-hours trading, but later pulled back near the flatline.

Here’s how the company did versus LSEG estimates:

• Earnings per share: 85 cents adjusted vs. 80 cents expected
• Revenue: $3.00 billion vs. $2.94 billion expected

Revenue grew 31% from a year ago, including $388 million from its recent CyberArk and Chronosphere acquisitions, the cybersecurity company said. The company reported a net loss of $177 million, a loss of 22 cents per share, down from net income of $262 million, or 37 cents per share, a year ago.

The beat comes on lowered expectations, after the company gave disappointing guidance in February that fell short of analyst estimates.

Palo Alto issued stronger-than-expected guidance for the fourth quarter. The company expects revenue to range between $3.35 billion and $ 3.36 billion, versus a $3.28 billion estimate. Full-year guidance was also lifted, coming in at $11.42 billion to $11.43 billion.

 “The latest advancements at the AI frontier have increased the level of urgency around cybersecurity, and redefined the shape of the industry for the coming years,” CEO Nikesh Arora said in a release.

Palo Alto shares have rallied more than 60% this year and over 80% this quarter as sophisticated cyber tools, capable of exposing software flaws, force companies to invest in cyber tools.

Earlier in the year, the sector sold off on worries that AI would massively disrupt software, including cybersecurity.

Those concerns are overblown, Arora told analysts during an earnings call on Tuesday, and declared the “SaaSpocalpyse” for cyber “dead.”

Over 1,200 customers have reached out to Palo Alto in the wake of Mythos, and the company has held 800 meetings over the last six weeks to prepare for the shifting AI landscape, Arora told analysts on Tuesday.

“In a few years, we expect agentic AI to reach a level of autonomous execution that is truly unprecedented, scanning environments, generating bespoke exploits, and orchestrating end-to-end campaigns at machine speed without human intervention,” he said. “That is the trajectory of the modern threat landscape.”

Both Palo Alto and its competitors are leaning into more AI acquisitions to beef up their suite of tools as the agentic revolution paves the way for attackers to carry out quicker and faster cyberattacks. Within the last year, the company bought Israeli identity security platform CyberArk for $25 billion.

Other significant acquisitions include KOI Security, AI observability platform Chronosphere and Protect AI. The company rebranded CyberArk as Idira last month.

Palo Alto is an early participant in Anthropic’s Project Glasswing, which limited its Mythos model rollout and allowed select partners to test the potential cybersecurity ramifications.

The model, which spiked concerns that hackers could use the tool to accelerate attacks, opened to 150 more partners for testing on Tuesday.

Palo Alto Networks will migrate key internal workloads to Google Cloud as part of a new multibillion-dollar agreement, the companies announced Friday.

The companies said the deal is an expansion of their existing strategic partnership and will deepen their engineering collaboration.

Palo Alto Networks is now using Google’s Gemini artificial intelligence models to power its copilots, and it is also using Google Cloud’s Vertex AI platform, according to a release.

“Every board is asking how to harness AI’s power without exposing the business to new threats,” BJ Jenkins, president of Palo Alto Networks, said in a statement. “This partnership answers that question.”

Palo Alto Networks, which offers a range of cybersecurity products, already has more than 75 joint integrations with Google Cloud and has completed $2 billion in sales through the Google Cloud Marketplace.

As part of the new phase of the partnership, Palo Alto Networks customers will be able to protect live AI workloads and data on Google Cloud, maintain security policies, accelerate Google Cloud adoption, and simplify and unify their security solutions, the companies said.

Palo Alto Networks’ shares were up nearly 1% on Friday. Shares of Google parent Alphabet rose less than 1%.

“This latest expansion of our partnership will ensure that our joint customers have access to the right solutions to secure their most critical AI infrastructure and develop new AI agents with security built in from the start,” Google Cloud President Matt Renner said in a statement.

WATCH: Google unveils ‘Gemini 3 Flash’ AI model focused on speed and cost

Regulators in the U.S. have moved to block one of Hong Kong’s largest telecommunications companies from accessing domestic networks, citing national security concerns.

The U.S. Federal Communications Commission announced on Wednesday that it had initiated proceedings to potentially bar HKT Trust and HKT Ltd and its subsidiaries from interconnecting with American networks, escalating concerns over its ties to China. 

The government agency asked HKT, which is a subsidiary of information and communication technology giant PCCW, to justify why its authorizations should not be revoked.  HKT’s current hold permits allowing direct exchange of calls and data with U.S. carriers.

China Unicom, which owns about 18.4% of PCCW, lost its own U.S. network access in 2022 due to similar concerns.

“The FCC’s action on HKT today is an appropriate step towards ensuring the safety and integrity of our communications networks,” FCC Chairman Brendan Carr said in a statement. 

“The FCC will continue to safeguard America’s networks against penetration from foreign adversaries, like China.“

The Hong Kong-listed shares of HKT fell more than 5%, while PCCW fell 3.6% in Thursday trading.

According to their 2024 annual reports, HKT and PCCW derived about 13% of their 2024 revenues from regions outside greater China and Singapore, though specific countries weren’t detailed. HKT made up about 90% of the group’s total revenue.

HKT told CNBC in a statement that it was carefully reviewing the FCC’s order. “We will appropriately respond to the relevant authorities and are committed to doing our utmost to fulfill our responsibilities to all stakeholders,” it said.

Under the leadership of Carr, the FCC has expanded efforts to expel Chinese state-linked entities, including China Telecom, Pacific Networks and ComNet, from U.S. markets.

On Friday, the FCC announced that the major U.S. online retail websites had removed millions of listings for banned Chinese electronics as part of its broader China crackdown.

The ports deal stalled after Beijing objected to the exclusion of Chinese investors, with CK Hutchison indicating it no longer plans to comeplete the transaction in 2025.

The FCC’s latest move against HKT also comes as U.S. President Donald Trump escalates his trade war with China.

Palo Alto Networks reported better-than-expected quarterly results and issued upbeat guidance for the current period. The cybersecurity software vendor said Nir Zuk, who founded the company in 2005, is retiring from his role as chief technology officer.

The stock rose about 5% in extended trading.

Here’s how the company did compared to LSEG estimates:

• Earnings: 95 cents adjusted vs. 88 cents expected

• Revenue: $2.54 billion vs. $2.5 billion expected.

Revenue in the fiscal fourth quarter rose 16% from about $2.2 billion last year, the company said in a statement. Net income fell to about $254 million, or 36 cents per share, from about $358 million, or 51 cents per share, in the year-ago period.

The company also issued upbeat guidance for the fiscal first quarter. Earnings per share will be between 88 cents and 90 cents, Palo Alto said, topping an 85-cents estimate from StreetAccount.

For the full year, Palo Alto said revenue will range from $10.48 billion to $10.53 billion on adjusted earnings of $3.75 to $3.85 per share. Both estimates exceeded Wall Street’s projections.

Palo Alto said that for the fiscal first quarter, remaining purchase obligations, which tracks backlog, will range between $15.4 billion and $15.5 billion, surpassing a $15.07 billion estimate.

Last month, the company announced plans to buy Israeli identity security provider CyberArk for $25 billion. It’s the largest deal Palo Alto has made since its founding, and most ambitious in an acquiring spree that ramped up after CEO Nikesh Arora took the helm of the company in 2018.

Shares sold off sharply after the news broke and have yet to recover previous highs. The stock is down about 3% this year as of Monday’s close.

“We look for great products, a team that can execute in the product, and we let them run it,” Arora told CNBC following the announcement. “This is going to be a different challenge, but we’ve done well 24 times, so I’m pretty confident that our team can handle this.”

Lee Klarich, the company’s product chief, will replace Zuk as CTO and fill his position on the board.

WATCH: Power check on Palo Alto, Viking Holdings and Estee Lauder

Palo Alto Networks will take over Israeli identity security provider CyberArk in a deal valued at roughly $25 billion.

The California-based cybersecurity company will pay shareholders $45 apiece for 2.2005 shares of CyberArk, representing a 26% premium to its share price Friday. The deal is expected to close during Palo Alto Networks’ fiscal year 2026.

Shares of Palo Alto fell more than 8% Wednesday, building on a 5% loss from Tuesday. CyberArk’s stock dipped about 2%.

Palo Alto CEO and chairman Nikesh Arora said in an interview with CNBC’s “Squawk on the Street” on Wednesday that the company is entering the identity market as it hits an inflection point, which has always been its strategy.

“They are poised to go and disrupt this market and create the platform we need and also solve the upcoming problem with agentic AI,” he said. “From all those factors, we believe this is the right time to do something like this and be ready for the market in the next 12 to 18 months.”

Blockbuster cybersecurity deals have been a force in the mergers and acquisitions market in 2025 after a relatively slow period for dealmaking. In March, Google shelled out $32 billion for cloud security startup Wiz in its biggest acquisition ever.

Palo Alto Networks intends to use the deal to officially penetrate the identity security market and improve its offering for customers. Arora told CNBC that Palo Alto’s scale can help accelerate the reach of CyberArk’s platform.

CyberArk, which went public a little over a decade ago, creates identity software tools that grant employees access to platforms and applications. Its biggest competitors in the space include Okta and Microsoft.

As artificial intelligence advances, these tools have become more critical to protecting businesses against cyber and ransomware threats.

Since taking the helm of the company in 2018, Arora has bolstered the cybersecurity provider’s offerings and swelled its market value to roughly $120 billion.

This year, Palo Alto bought startup Protect AI for an undisclosed amount to improve its AI tools. The company acquired Talon Cyber Security, Dig Security and Zycada Networks in 2023.

Arora said he expects ongoing consolidation in the cybersecurity space over the next five years.

“Our job is to get this done, execute, deliver to the market and show our shareholders that we have the ability to execute these kinds of transactions, which I firmly believe we do,” he said.

The Wall Street Journal reported Tuesday that both companies had discussed a potential deal, sending shares of CyberArk skyrocketing more than 13%.

– CNBC’s Jordan Novet and Ari Levy contributed to this article.

CyberArk shares soared as much as 18% on Tuesday after The Wall Street Journal reported that cybersecurity provider Palo Alto Networks has held discussions to buy the identity management software maker for over $20 billion.

Representatives of the two companies didn’t immediately respond to requests for comment.

Cloud security is becoming an increasingly critical piece of the enterprise tech stack, especially as rapid advancements in artificial intelligence bring with them a whole new set of threats, and as ransomware attacks become more commonplace.

Founded in 2005, Palo Alto Networks has emerged in recent years as a consolidator in the cybersecurity industry and has grown into the biggest player in the space by market cap, with a valuation of over $130 billion. CEO Nikesh Arora, who was appointed to the job in 2018, has been on a spending spree, snapping up Protect AI in a deal that closed in July, and in 2023 buying Talon Cyber Security, Dig Security and Zycada Networks.

But CyberArk would represent by far Arora’s biggest bet yet. The Israeli company, which went public in 2014, provides technology that helps companies streamline the process of logging on to applications for employees.

CyberArk faces competition from Microsoft, Okta and IBM‘s HashiCorp. Another rival, SailPoint, returned to the public markets in February.

With Tuesday’s rally, CyberArk shares climbed to a record, surpassing their prior all-time high reached in February. The stock is up 29% this year, pushing the company’s market cap to almost $21 billion, after jumping 52% in 2024. Palo Alto shares, meanwhile, slid 3.5% on the report and are now up about 9% for the year.

Representatives from Palo Alto Networks and CyberArk didn’t immediately respond to requests for comment.

During the first quarter, CyberArk generated around $11.5 million in net income on around $318 million in revenue, which was up 43% from a year earlier.

It’s been an active stretch for big deals in the cyber market. Google said in March that it was spending $32 billion on Wiz, its largest acquisition on record by far, and a purchase intended to bolster its cloud business with greater AI security technology.

Networking giant Cisco also made its biggest deal ever in the security space, buying Splunk in 2023 for $28 billion. Splunk’s technology helps businesses monitor and analyze their data to minimize the risk of hacks and resolve technical issues faster.

— CNBC’s Ari Levy contributed to this report

WATCH: Cisco CEO on acquisition of Splunk

Zelle, the payments network run by banks-owned Early Warning Services, crossed $1 trillion in total volumes last year, which it said was the most ever for a peer-to-peer platform.

The firm said Wednesday that its user base jumped 12% to 151 million accounts in 2024, and that the total dollars sent on the platform jumped 27% from the year earlier.

Last year’s payment volumes were “by far the most money ever moved by a P2P payments service in a single year,” Denise Leonhard, general manager of Zelle, told CNBC.

Zelle, which was launched in 2017 in response to fintech platforms such as Venmo, PayPal and CashApp, has some key advantages over those players. EWS is owned by seven of the biggest U.S. banks, including JPMorgan Chase, Bank of America and Wells Fargo, and Zelle allows for instant money transfers made within the apps of thousands of member institutions.

Its growth rate last year exceeded that of PayPal, which reported that total P2P payments volumes reached more than $400 billion.

Zelle’s meteoric rise comes amid accusations that the network and the three biggest U.S. banks on it failed to properly investigate fraud complaints or give victims reimbursement. The company has introduced measures to reduce fraud and has said that 99.95% of transactions are free of fraud and scams.

Growth is being driven as bank customers increasingly use Zelle instead of cash or checks, and as small businesses adopt the payment option, said Leonhard.

“People are using Zelle in order to do things like pay their rent or paying their nanny,” Leonhard said. “We want to continue to be top of mind for those consumers to be able to use this every day,” Leonhard added.

Comcast is thinking about separating or spinning off NBCUniversal’s cable networks. If it moves forward with the idea, it could lay the groundwork for a reconfiguration of the entire American media landscape.

The logic for Comcast is fairly straightforward. NBCUniversal’s cable networks aren’t growing anymore. The company’s energy and focus is on promoting Peacock, NBCUniversal’s growing (but still money-losing) streaming service. Carving out the cable portfolio could placate Comcast investors by removing declining assets from the balance sheet.

Comcast shares gained more than 3% Thursday after the company’s third-quarter earnings release and conference call.

“We are now exploring whether creating a new well-capitalized company, owned by our shareholders and comprised of our strong portfolio of cable networks, would position them to take advantage of opportunities in the changing media landscape and create value for our shareholders,” Comcast President Mike Cavanagh said during the call. “We are not ready to talk about any specifics yet, but we’ll be back to you as and when we reach firm conclusions.”

Though executives stressed that the exploration is in the very early stages, it could be prelude to broader industry consolidation. NBCUniversal’s cable networks, which include Bravo, E!, Syfy, Oxygen True Crime and USA Network, as well as news networks MSNBC and CNBC, could be merged with another media company or could be a catalyst for a rollup of cable channels at a number of different companies.

The idea of a rollup isn’t new. It’s something media mogul John Malone discussed way back in 2016 when Lionsgate acquired premium network Starz.

“Lionsgate could buy Starz and potentially other free radicals in the industry,” Malone said then, referring to cable network groups not owned by larger media conglomerates such as AMC Networks, which is controlled by the Dolan family, or A&E Networks, which is co-owned by Hearst and Disney.

That vision never materialized, in part because the media world’s attention shifted from traditional pay TV to streaming, which devalued cable networks. Earlier this year, Warner Bros. Discovery reported a non-cash goodwill impairment charge of $9.1 billion, triggered by the reevaluation of the book value of its TV networks segment.

Still, the loss of value for cable networks has now led to a new opportunity for a rollup, if companies like Comcast, Warner Bros. Discovery and Disney decide they want to shed declining cable assets in favor of focusing on streaming.

Thus far, media companies have opted to keep their cable networks, which still pump out billions in profit even as millions of Americans cut the cord each year.

Comcast may set a template if it moves forward with a spin and sees a spike in its overall valuation.

Ironically, Starz could again play a role in a media shakeup. The small media company wants to be the vehicle for a cable network rollup, CNBC reported in 2022. Starz is set to separate from Lionsgate at the end of 2024.

There’s broad uncertainty if a company that consists of only cable networks has a viable path forward as a publicly traded entity. Equity investors typically aren’t fans of declining assets, even if they’re cash rich.

But even if Starz doesn’t achieve its vision of a cable network rollup, it’s possible a private equity firm may have interest in harvesting a group of cable networks for cash. Apollo Global Management, for one, had late interest in acquiring Paramount Global and has made several media-related investments in recent years, including buying Yahoo.

Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.

More change is coming to Diamond Sports’ regional sports networks.

The company said in court papers filed Tuesday that it reached a naming rights deal with Flutter-owned FanDuel, which will rebrand the Bally Sports channels just as the National Hockey League season has started and the National Basketball Association’s 2024-2025 season is less than a week away.

Diamond Sports said in the filing that if it is able to emerge from bankruptcy protection, FanDuel will be a “long-term naming rights partner.” The new naming rights agreement would also give FanDuel the right to buy up to 5% of equity in the reorganized company and get performance warrants for up to 5% of equity.

The agreement is subject to court approval.

The new partnership will allow Diamond Sports to get one step closer to emerging from bankruptcy and will give FanDuel, which is already the top sports betting company by market share, even more exposure.

In Tuesday’s court papers, Diamond said that while discussions with FanDuel began in February, it waited until it finalized agreements with the NBA and NHL to negotiate the final terms of the naming rights deal. A FanDuel representative declined to comment beyond the filings, and the specific financial terms of the agreement were not disclosed.

Diamond Sports said in court papers it considered FanDuel “an attractive potential partner … due to the high degree of alignment” between the regional sports networks and the online gaming business.

This will be the regional sports networks’ third name. As part of its acquisition of Fox Corp.’s assets, Disney had to divest the networks in order to gain regulatory approval. Disney offloaded the networks, still under the Fox Sports banner, in 2019 to Sinclair. A naming rights deal was later signed with gaming company Bally’s Corp.

The Bally’s Corp. agreement ended as part of the settlement that came earlier this year between Diamond Sports and Sinclair.

Diamond, which remains an independently run, unconsolidated subsidiary of Sinclair, alleged in the lawsuit that Sinclair’s ownership exacerbated its problems. Sinclair did not admit wrongdoing.

Diamond Sports filed for bankruptcy protection last year. Since then, Diamond’s restructuring has been filled with back-and-forth discussions with the NBA, NHL and Major League Baseball as the debt-saddled company has attempted to emerge from bankruptcy.

Diamond Sports has said in court papers that based on financial projections, it hopes to emerge from bankruptcy as early as December.

Throughout the bankruptcy proceedings, teams across all three leagues have been exiting the networks and flocking to different local viewing options for their fans.

Earlier this month, Diamond Sports said it was planning to drop all of its MLB teams except for the Atlanta Braves for the 2025 season. The existing teams’ contracts are in various stages with Diamond Sports, but in total, the company would see 11 MLB teams exit.

A Diamond Sports attorney said in court earlier this month that dropping these teams “is not our preferred path.”

Several MLB teams, including the San Diego Padres and Arizona Diamondbacks, left the regional sports networks in 2023, and the MLB has produced the teams’ local games since then. On Tuesday, the league announced it would also do the same for the Milwaukee Brewers, Cleveland Guardians and Minnesota Twins for the 2025 season.

Some NBA teams that have left the regional sports networks have turned to local broadcast stations to air local games. The NHL’s Dallas Stars and Anaheim Ducks have launched over-the-top streaming partnerships with Victory+, a sports streamer owned by Canada-based A Parent Media Co., for their local viewing.