Overview
- Palo Alto will pay in cash and replacement equity awards, with closing targeted for the second half of fiscal 2026 pending regulatory approvals.
- Management plans to integrate Chronosphere with Cortex AgentiX so AI agents can detect issues, investigate root causes, and remediate in real time.
- Chronosphere reported annual recurring revenue above $160 million and Gartner Leader status, implying a roughly 21x ARR valuation for the deal.
- Alongside the announcement, Palo Alto beat fiscal Q1 estimates and raised full-year guidance to $10.50–$10.54 billion in revenue and $3.80–$3.90 in adjusted EPS.
- Shares fell after the news as investors weighed the high price and execution risks next to the pending $25 billion CyberArk acquisition, with both deals expected to close in the second half of fiscal 2026.