Palo Alto’s $25 billion CyberArk deal was worth $21 billion at closing. The shares are now worth $37 billion
Palo Alto's annual report valued the acquisition at $21.1 billion, reflecting a drop in the company's share price between the deal's announcement and completion. But the 112 million shares handed to CyberArk shareholders have nearly doubled in value since closing, despite a recent sell-off.
When Palo Alto Networks agreed to buy CyberArk, the deal was presented as a roughly $25 billion acquisition, the largest in the U.S. cybersecurity company's history and one of the biggest ever for an Israeli technology company. However, its own accounts ultimately put the purchase consideration at $21.1 billion.
The figure appears in Palo Alto's annual report for the fiscal year ended July 31, filed in September. It records total purchase consideration of $21.061 billion for CyberArk, which the company acquired on February 11. The difference does not reflect a discount negotiated by Palo Alto. Under the terms of the deal, CyberArk shareholders received $45 in cash and 2.2005 Palo Alto shares for each CyberArk share. Palo Alto issued approximately 112 million shares as part of the transaction, assigning them a value of $18.488 billion, or about $165.07 per share, for accounting purposes. The original $25 billion headline valuation was based on Palo Alto's share price when the deal was announced in July 2025. The lower figure in the annual report reflects the value of the stock consideration when the acquisition closed in February 2026.
For CyberArk's former shareholders, the value of the deal has moved in the opposite direction since the acquisition closed. The 112 million Palo Alto shares issued in the transaction were valued at approximately $18.5 billion in February. At Palo Alto's November 10 closing price of $326.36, that same block of shares would be worth about $36.6 billion, an increase of nearly 98%.
On an individual-share basis, each former CyberArk shareholder received 2.2005 Palo Alto shares, in addition to $45 in cash. At the latest closing price, the stock portion alone is worth about $718 per former CyberArk share, putting the total value of the original consideration at approximately $763. That compares with roughly $408 per CyberArk share based on the value of Palo Alto stock when the acquisition closed.
The increase has come despite a sharp recent pullback in Palo Alto's stock, which has fallen about 22% over the past month. The gains are, of course, only on paper for shareholders who held on to their Palo Alto shares. Those who sold some or all of their holdings after the acquisition will have realized a different outcome.
The acquisition also transformed Palo Alto's balance sheet. The company recorded $14.8 billion in goodwill from CyberArk, while total goodwill rose to $22 billion from $4.6 billion a year earlier. Intangible assets climbed to $7 billion from $763 million, and total assets more than doubled to $48.5 billion from $23.6 billion.
CyberArk and Chronosphere, which Palo Alto acquired in January, together contributed $930 million in revenue and an operating loss of $797 million during the period following their acquisitions.
CyberArk also brought debt onto Palo Alto's books. The company assumed $1.25 billion in principal of zero-coupon convertible notes due in 2030. After some holders converted $153 million of the notes, $1.1 billion in principal remained outstanding at the end of July. Palo Alto elected to account for the notes at fair value, which stood at $1.8 billion. Changes in their value and in the value of related hedging instruments generated a net accounting loss of approximately $562 million during the fiscal year. That included a $620 million loss on the notes, partly offset by a $58 million gain on the related capped calls.
