Palo Alto Networks to Acquire CyberArk Software for $25 Billion

Palo Alto Networks has announced its agreement to acquire Israeli cybersecurity firm CyberArk Software in a cash-and-stock deal valued at approximately $25 billion. This strategic move aims to bolster Palo Alto Networks' position in the identity security market, addressing the escalating demand for identity and privileged access management solutions amid the rise of AI-driven cyber threats.

Under the terms of the agreement, CyberArk shareholders will receive $45 in cash and 2.2005 shares of Palo Alto Networks stock for each CyberArk share. This offer represents a 26% premium over CyberArk's 10-day average trading price as of July 25, 2025. The transaction has been unanimously approved by the boards of both companies and is expected to close during the second half of Palo Alto Networks' fiscal year 2026, pending regulatory approvals and CyberArk shareholder consent.

Palo Alto Networks, headquartered in Santa Clara, California, is a global leader in cybersecurity, renowned for its comprehensive security platforms that integrate network, cloud, and endpoint security. Since 2018, under the leadership of CEO Nikesh Arora, the company has pursued a strategy of expanding its portfolio through strategic acquisitions to address evolving cyber threats.

CyberArk Software, based in Newton, Massachusetts, with roots in Israel, specializes in identity security, particularly privileged access management (PAM). The company serves over 10,000 clients worldwide, offering solutions that protect against cyber threats by securing privileged accounts and credentials.

The acquisition is driven by the increasing importance of identity security in the face of sophisticated AI-driven cyberattacks. By integrating CyberArk's identity security capabilities, Palo Alto Networks aims to offer a comprehensive cybersecurity suite that addresses both human and machine identities. This move aligns with the industry's trend toward platformization, where integrated solutions are favored over standalone products.

Nikesh Arora, Chairman and CEO of Palo Alto Networks, stated:

"Our market entry strategy has always been to enter categories at their inflection point, and we believe that moment for Identity Security is now."

The deal values CyberArk at a 26% premium over its 10-day average trading price as of July 25, 2025. CyberArk shareholders will receive $45 in cash and 2.2005 shares of Palo Alto Networks stock per share. The transaction is expected to be immediately accretive to Palo Alto Networks' revenue growth and gross margin, with free cash flow per share accretion anticipated by fiscal year 2028.

Following the announcement, Palo Alto Networks' shares declined nearly 8%, while CyberArk's stock experienced a slight decrease of 1.8%. Analysts have mixed reactions, with some viewing the acquisition as a strategic success in combating AI-related cyber threats, while others express concerns about the deal's valuation and integration challenges.

This acquisition is part of a broader trend of consolidation in the cybersecurity industry, as companies seek to enhance their capabilities to address evolving threats. Earlier in 2025, Alphabet announced a $32 billion acquisition of cloud security startup Wiz, highlighting the competitive landscape and the premium placed on comprehensive security solutions.

The integration of CyberArk's identity security solutions into Palo Alto Networks' existing platforms is expected to provide customers with a unified approach to cybersecurity, addressing the complexities introduced by AI and machine identities. This move underscores the growing recognition that identity security is a critical component of modern cybersecurity strategies.