Cybersecurity major Palo Alto Networks has signed a cash and stock deal worth approximately $25bn to acquire identity security solutions provider CyberArk.

This acquisition will facilitate Palo Alto Networks’ entry into the identity security sector. Through the deal, Palo Alto Networks aims to expand its platform strategy and disrupt the traditional Identity Access Management (IAM) market.

By integrating CyberArk’s capabilities into its Strata and Cortex platforms, Palo Alto Networks intends to deliver identity-aware security solutions across enterprises.

CyberArk’s platform is designed to secure human and machine identities with privilege controls and threat prevention measures. The integration with Palo Alto Networks is expected to offer a unified security solution that addresses gaps in identity management and simplifies operations.

Palo Alto Networks plans to incorporate CyberArk’s Identity Security Platform into its AI-driven security solutions, thereby enhancing protection across human, machine, and AI-driven identities.

Palo Alto Networks chairman and CEO Nikesh Arora said: “Our market entry strategy has always been to enter categories at their inflection point, and we believe that moment for Identity Security is now.

“This strategy has guided our evolution from a next-gen firewall company into a multi-platform cybersecurity leader. Today, the rise of AI and the explosion of machine identities have made it clear that the future of security must be built on the vision that every identity requires the right level of privilege controls, not the ‘IAM fallacy’.”

CyberArk has separately reported financial results for Q2 2025. The company achieved total revenue of $328m, reflecting a 46% increase year-over-year. Subscription revenue climbed by 66% to $263.8m, while GAAP net loss widened to $90.8m from $12.9m in the same period last year.

Under the terms of the acquisition, CyberArk shareholders will receive $45 in cash and 2.2005 shares of Palo Alto Networks common stock per share. Both CyberArk and Palo Alto Networks are listed on Nasdaq.

This deal values CyberArk at a 26% premium over its unaffected 10-day average daily volume-weighted average price as of 25 July 2025.

CyberArk founder and executive chairman Udi Mokady said: “Joining forces with Palo Alto Networks is a powerful next chapter, built on shared values and a deep commitment to solving the toughest identity challenges.

“Together, we’ll bring unmatched expertise across human and machine identities, privileged access, and AI-driven innovation to secure what’s next. This is more than a combination of technologies—it’s an acceleration of the mission we began over two decades ago.”

The acquisition is expected to be immediately accretive to Palo Alto Networks’ revenue growth and gross margin. The company anticipates that the transaction will enhance free cash flow per share by fiscal year 2028 as synergies are realised.

The transaction has received unanimous approval from the boards of directors of both companies. It is set to close in the latter half of Palo Alto Networks’ fiscal year 2026, pending customary conditions including shareholder and regulatory approvals.

Recently, Palo Alto Networks completed the acquisition of Protect AI, thereby enhancing its offerings in AI and ML security through Prisma AIRS. This acquisition is expected to advance Palo Alto Networks’ capabilities in securing AI development lifecycles.