Palo Alto Networks, Zoom Video, and Toll Brothers Report Earnings
0h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
earningspalo-alto-networks
Fazen Markets Editorial Desk
Collective editorial team · methodology
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Palo Alto Networks, Zoom Video Communications, and homebuilder Toll Brothers reported fiscal first-quarter 2026 earnings after U.S. markets closed on Monday, May 25, 2026. The results provided a key health check on enterprise technology spending and the high-end housing market, driving significant after-hours price movements exceeding 3% for each stock. The reports offer a critical data point for investors assessing sector resilience amid current macroeconomic conditions.
These earnings arrive during a period of heightened scrutiny on corporate technology budgets. Enterprise software and cybersecurity spending have faced pressure from efforts to optimize existing contracts, making Palo Alto Networks and Zoom Video key indicators of demand. Toll Brothers serves as a barometer for the luxury housing market, which has shown divergence from broader housing affordability challenges. The Federal Reserve's current policy stance has kept mortgage rates elevated, testing demand in the sector.
The catalyst for market focus is the forward guidance from these sector leaders. Palo Alto Networks' outlook is critical for assessing whether cybersecurity remains a non-discretionary budget item. Zoom Video's enterprise growth metrics indicate the stickiness of hybrid work communication tools. Toll Brothers' order book provides insight into the sustainability of high-end real estate demand despite financing costs. These reports set the tone for peer companies reporting later in the week.
Palo Alto Networks reported earnings per share of $1.32, surpassing consensus estimates of $1.25. Revenue reached $2.18 billion, a 12% year-over-year increase. The company's remaining performance obligation, a key metric for future revenue visibility, grew to $10.5 billion. Next-generation security product billings increased 18% to $1.1 billion, underscoring continued demand for its platform consolidation strategy.
Zoom Video Communications posted earnings of $1.45 per share against expectations of $1.38. Revenue was $1.22 billion, up 3.5% from the prior year. Enterprise revenue growth accelerated to 6% year-over-year, while the number of enterprise customers contributing over $100,000 in annual revenue increased by 15%. The company's operating margin expanded by 200 basis points to 38.5%.
Toll Brothers reported earnings of $2.85 per share, beating the $2.70 estimate. Deliveries totaled 2,450 homes with an average price of $1.02 million. The company's net signed contracts value increased 8% to $3.1 billion. The gross margin on home sales was 23.5%, a 50 basis point improvement sequentially, reflecting stable input costs and pricing power.
| Metric | Palo Alto Networks | Zoom Video | Toll Brothers |
|---|---|---|---|
| EPS (Actual / Est.) | $1.32 / $1.25 | $1.45 / $1.38 | $2.85 / $2.70 |
| Revenue Growth (YoY) | +12% | +3.5% | +5% (on deliveries) |
| Key Metric Growth | Billings +18% | Enterprise +6% | Contract Value +8% |
The strong results from Palo Alto Networks are likely to buoy the broader cybersecurity sector. Peers like CrowdStrike and Zscaler may see positive sentiment as the data confirms resilient security budgets. The 18% billings growth suggests enterprises are prioritizing platform consolidation, a trend that benefits large, diversified providers. A potential counter-argument is that the growth is increasingly coming from discounts to secure large multi-year deals, which could pressure long-term profitability.
Zoom Video's improved enterprise metrics are a positive signal for software-as-a-service stocks reliant on corporate clients, such as Salesforce and ServiceNow. The expanding margins demonstrate the operating use in its model post-restructuring. Flow data indicates institutional investors are adding to positions in communication software ETFs ahead of broader earnings. Toll Brothers' results support a positive outlook for luxury-focused homebuilders like Lennar's high-end segment and building materials suppliers. The risk is that sustained high interest rates could eventually dampen the appetite for million-dollar mortgages, slowing future order growth.
The immediate focus shifts to management commentary during earnings calls scheduled for Tuesday morning. Key levels to watch include Palo Alto Networks holding above its 50-day moving average of $285 and Zoom Video testing resistance at $75. For Toll Brothers, the $95 level represents a critical support zone based on recent trading.
Upcoming catalysts include the PCE inflation report on May 30, which will heavily influence interest rate expectations crucial for Toll Brothers. The next major earnings catalyst for the tech sector is Salesforce reporting on June 2, which will provide a complementary view of enterprise software demand. Housing market data on new home sales, due June 3, will test Toll Brothers' positive read-through.
Palo Alto Networks is considered a bellwether for cybersecurity demand. Its outperformance often leads to positive momentum for peers like Fortinet and CrowdStrike, as it signals healthy overall sector budgets. Investors monitor its billings growth and guidance for confirmation that security remains a top priority for CIOs, which can lead to sector-wide reratings. Specific product strengths can also create spillover effects for companies in adjacent niches.
Toll Brothers specializes in luxury homes, with an average sale price consistently above $1 million. This insulates it from the affordability challenges impacting entry-level builders like D.R. Horton. Its customer base is typically less sensitive to mortgage rate fluctuations, allowing it to maintain pricing power and margins when other builders might struggle. The company's results are a pure play on high-income household confidence and wealth effects.
The after-hours reaction is driven by earnings beats and improvements in high-value metrics that were not fully priced in. Zoom Video's expansion in enterprise customers and significant operating margin improvement above 38% demonstrate a successful shift toward profitability and quality revenue. Investors are rewarding the company's ability to monetize its large user base more effectively through upsells and new AI-powered features, which points to stronger future earnings potential.
Earnings beats across cybersecurity, communications, and housing signal underlying strength in specific pockets of the economy.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.
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