Tariffs Are Now 'Immaterial' For Palo Alto Networks Following Its US Manufacturing Shift—The 'Only Pure-Play Cybersecurity Firm' To Do So

Cybersecurity giant Palo Alto Networks Inc. PANW says that tariffs are no longer a meaningful risk to its hardware business after shifting a bulk of its supply chain and production to the United States.

Supply Chain Reshoring

During the company’s fourth quarter earnings call on Monday, CFO Dipak Golechha highlighted the substantial advantages it now has over competitors after it relocated manufacturing and fulfillment to Texas, a move he says, provides scale, while making global trade and tariff-related tensions “immaterial.”

Galecha stressed that Palo Alto's decision to relocate production gives the company a unique position in the market. He said the company is now “the only pure play cybersecurity firm” to assemble all of its hardware in the U.S., and at scale. Something, he says, gives it a significant edge over peers in this segment.

In addition to the shift in its manufacturing, the company addressed its new disciplined approach to inventory management.

Golechha said the company recently completed a “comprehensive review” of its inventory, describing the move as “a deliberate and prudent step” to instill a conservative and disciplined view of its product life cycles, which he says is crucial as it heads into fiscal 2026.

Stock Surges Following Q4 Results

Palo Alto released its fourth quarter results on Monday, reporting $2.54 billion in revenue, beating consensus estimates at $2.50 billion. It posted a profit of $0.95 per share, against analyst consensus estimates at $0.88 per share.

Shares of Palo Alto were down 0.52% on Monday, closing at $176.17, but are up 5.81% after hours, following its robust fourth quarter performance. The stock scores high in Benzinga’s Edge Stock Rankings, but has an unfavorable price trend in the short, medium and long terms. Click here for deeper insights into the stock, its peers and competitors.