Overview
- Palo Alto will pay $3.35 billion in cash and replacement equity for Chronosphere, which reported more than $160 million in ARR with triple-digit growth and recognition as a 2025 Gartner leader.
- Management plans to pair Chronosphere’s high-scale telemetry with Cortex AgentiX so AI agents can detect issues, investigate root causes and execute automated fixes in real time.
- Palo Alto topped fiscal Q1 estimates with $2.47 billion in revenue and 93 cents adjusted EPS, and it raised full-year guidance to $10.50–$10.54 billion in revenue and $3.80–$3.90 in adjusted EPS.
- Shares fell about 3% after hours and slid further the next day as investors weighed the purchase price and timing, with multiple analysts maintaining Buy ratings despite near-term pressure.
- The transaction implies roughly 21x ARR for Chronosphere, prompting debate over valuation and execution risk as Palo Alto also works to close its pending ~$25 billion CyberArk acquisition.