Palo Alto Networks (NASDAQ: PANW) announced that it will acquire CyberArk Software (NASDAQ: CYBR) for approximately US$25 billion. This deal will be the first move by Palo Alto Networks into the identity-security market.
CyberArk shareholders will receive US$45 in cash and 2.2005 shares of the common stock of Palo Alto Networks. The offer is a 26% to the 10-day volume-weighted average price (VWAP) of CyberArk as of July 25, 2025.
The deal is expected to close in the second half of Palo Alto Networks’ F2026, pending regulatory approvals and a shareholder vote by CyberArk.
Deal Structure and Financial Impact.
The acquisition values CyberArk at approximately 20.5 times revenue, based on its revenue of US$1.20 billion (as of June 30, 2025), and Enterprise Value of US$24.6 billion.
Palo Alto Networks reported that the deal will contribute to revenue growth and gross margin immediately upon closing. It anticipates the deal to be accretive to free cash flow per share in F2028, following the initial year of full synergy realization.
The companies did not reveal any specific cost synergy goals or integration expenses, but Palo Alto Networks cited revenue opportunities through cross-selling CyberArk’s products to its existing 70,000 customers.
Strategic Rationale
The acquisition provides identity security as a core platform within Palo Alto Networks‘ multi-platform cybersecurity strategy. According to the company executives, identity security has hit an inflection point, which is caused by the intersection of identity and security, the growth of machine identities, and the emergence of autonomous AI agents.
“Our market entry strategy has always been to enter categories at their inflection point, and we believe that moment for identity security is now,” said Nikesh Arora, chairman and CEO of Palo Alto Networks, in a shareholder letter.
The acquisition will combine the privileged access management and machine identity features of CyberArk with the existing Strata and Cortex platforms of Palo Alto Networks. The unified platform is designed to provide identity-sensitive security in network, cloud, and security operations environments.
CyberArk executive chairman and founder Udi Mokady stated that the merger would speed up the mission of the company to secure critical identities. “Together, we’ll bring unmatched expertise across human and machine identities, privileged access, and AI-driven innovation,” Mokady said in a statement.
Company Profiles
CyberArk is a leader in identity security that specializes in privileged access management, machine identity security, and identity governance.
The company has over 10,000 customers, including over 55% of the Fortune 500, and operates about 8 million privileged users worldwide. CyberArk guided towards revenue of about US$1.32 billion in F2025.
Palo Alto Networks is a leader in network security, SASE, cloud security, and security operations. The firm has a fiscal 2025 revenue run rate of about US$9.18 billion and has over 70,000 enterprise customers across the globe.
Final Thoughts
This acquisition is occurring as cybersecurity vendors merge to develop more comprehensive platform capabilities to counter more sophisticated threats. Attacks based on identity and credential theft have led to the need to have integrated identity security solutions, particularly those that can be used at the enterprise level.
Palo Alto Networks cited from industry data that almost 90% of breaches involve stolen or mismanaged credentials. The company projects the identity security market to be around US$29 billion in 2025, and it is projected to grow as more AI agents are used in businesses.
Management also highlighted that the number of machine identities to human identities in enterprises has been approximately 80 to 1 and the use of AI agents will speed up the process. Identity security will become a foundational component of enterprise cybersecurity architectures.
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