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Palo Alto Financials

PANW
Source SEC Filings (10-K/10-Q) Updated Feb 17, 2026 Currency USD FYE July

This page shows Palo Alto (PANW) financial statements, including the income statement, balance sheet, cash flow statement, and key financial ratios. View 15 years of annual fundamentals and quarterly data, with year-over-year growth rates and compound annual growth rates (CAGR). All figures are derived from SEC filings (10-K and 10-Q reports).

Financial Health Signals

Profitability Growth Leverage Liquidity Cash Flow Returns 55 / 100
Financial Profile 55/100

Based on FY2025 annual data. Scores normalized against common benchmarks. How we calculate these scores

Profitability
52

Palo Alto has an operating margin of 13.5%, meaning the company retains $13 of operating profit per $100 of revenue. This results in a moderate score of 52/100, indicating healthy but not exceptional operating efficiency. This is up from 8.5% the prior year.

Growth
58

Palo Alto's revenue grew 14.9% year-over-year to $9.2B, a solid pace of expansion. This earns a growth score of 58/100.

Leverage
67

Palo Alto carries a low D/E ratio of 1.72, meaning only $1.72 of long-term debt for every $1 of shareholders' equity. This conservative leverage earns a score of 67/100, indicating a strong balance sheet with room for future borrowing.

Liquidity
15

Palo Alto's current ratio of 0.99 means current assets barely cover short-term liabilities. This tight liquidity results in a low score of 15/100, which could limit financial flexibility.

Cash Flow
100

Palo Alto converts 37.6% of revenue into free cash flow ($3.5B). This strong cash generation earns a score of 100/100.

Returns
40

Palo Alto's ROE of 13.1% shows moderate profitability relative to equity, earning a score of 40/100. This is down from 43.6% the prior year.

Altman Z-Score Safe
5.97

Palo Alto scores 5.97, well above the 2.99 safe threshold. The score is driven primarily by a large market capitalization ($130.0B) relative to total liabilities ($14.9B). This indicates low bankruptcy risk based on profitability, leverage, and asset efficiency.

Piotroski F-Score Neutral
4/9

Palo Alto passes 4 of 9 financial strength tests. 3 of 4 profitability signals pass, 1 of 3 leverage/liquidity signals pass, neither operating efficiency signal passes.

Earnings Quality Cash-Backed
3.28x

For every $1 of reported earnings, Palo Alto generates $3.28 in operating cash flow ($3.7B OCF vs $1.1B net income). This indicates profits are well-supported by actual cash generation, not accounting adjustments.

Interest Coverage Safe
414.3x

Palo Alto earns $414.3 in operating income for every $1 of interest expense ($1.2B vs $3.0M). This wide margin provides strong safety for debt servicing, even if earnings decline temporarily.

Key Financial Metrics

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Earnings & Revenue

Revenue
$9.2B
YoY+14.9%
5Y CAGR+22.0%
10Y CAGR+25.8%

Palo Alto generated $9.2B in revenue in fiscal year 2025. This represents an increase of 14.9% from the prior year.

EBITDA
$1.6B
YoY+64.0%
5Y CAGR+125.7%

Palo Alto's EBITDA was $1.6B in fiscal year 2025, measuring earnings before interest, taxes, depreciation, and amortization. This represents an increase of 64.0% from the prior year.

Net Income
$1.1B
YoY-56.0%

Palo Alto reported $1.1B in net income in fiscal year 2025. This represents a decrease of 56.0% from the prior year.

EPS (Diluted)
$1.60
YoY-56.0%

Palo Alto earned $1.60 per diluted share (EPS) in fiscal year 2025. This represents a decrease of 56.0% from the prior year.

Cash & Balance Sheet

Free Cash Flow
$3.5B
YoY+11.9%
5Y CAGR+33.4%
10Y CAGR+27.0%

Palo Alto generated $3.5B in free cash flow in fiscal year 2025, representing cash available after capex. This represents an increase of 11.9% from the prior year.

Cash & Debt
$3.1B
YoY+34.3%
5Y CAGR+7.4%
10Y CAGR+27.2%

Palo Alto held $3.1B in cash against $0 in long-term debt as of fiscal year 2025.

Dividends Per Share
N/A
Shares Outstanding
697M
YoY+114.1%

Palo Alto had 697M shares outstanding in fiscal year 2025. This represents an increase of 114.1% from the prior year.

Margins & Returns

Gross Margin
73.4%
YoY-0.9pp
5Y CAGR+2.7pp
10Y CAGR+0.5pp

Palo Alto's gross margin was 73.4% in fiscal year 2025, indicating the percentage of revenue retained after direct costs. This is down 0.9 percentage points from the prior year.

Operating Margin
13.5%
YoY+5.0pp
5Y CAGR+18.7pp
10Y CAGR+24.2pp

Palo Alto's operating margin was 13.5% in fiscal year 2025, reflecting core business profitability. This is up 5.0 percentage points from the prior year.

Net Margin
12.3%
YoY-19.8pp
5Y CAGR+20.1pp
10Y CAGR+26.4pp

Palo Alto's net profit margin was 12.3% in fiscal year 2025, showing the share of revenue converted to profit. This is down 19.8 percentage points from the prior year.

Return on Equity
13.1%
YoY-30.5pp
5Y CAGR+48.8pp
10Y CAGR+37.2pp

Palo Alto's ROE was 13.1% in fiscal year 2025, measuring profit generated per dollar of shareholder equity. This is down 30.5 percentage points from the prior year.

Capital Allocation

R&D Spending
$2.0B
YoY+9.7%
5Y CAGR+20.9%
10Y CAGR+26.7%

Palo Alto invested $2.0B in research and development in fiscal year 2025. This represents an increase of 9.7% from the prior year.

Share Buybacks
$0
YoY-100.0%

Palo Alto spent $0 on share buybacks in fiscal year 2025, returning capital to shareholders by reducing shares outstanding. This represents a decrease of 100.0% from the prior year.

Capital Expenditures
$246.2M
YoY+57.0%
5Y CAGR+2.8%
10Y CAGR+22.0%

Palo Alto invested $246.2M in capex in fiscal year 2025, funding long-term assets and infrastructure. This represents an increase of 57.0% from the prior year.

PANW Income Statement

Metric Q3'26 Q2'26 Q1'26 Q4'25 Q3'25 Q2'25 Q1'25 Q4'24
Revenue $514-100.0% $2.6B+4.9% $2.5B-2.5% $2.5B+10.8% $2.3B+1.4% $2.3B+5.5% $2.1B-2.3% $2.2B
Cost of Revenue $115-100.0% $685.0M+7.4% $638.0M-6.1% $679.3M+9.7% $619.3M+3.4% $599.0M+8.1% $554.0M-3.4% $573.7M
Gross Profit $399-100.0% $1.9B+4.0% $1.8B-1.1% $1.9B+11.2% $1.7B+0.7% $1.7B+4.6% $1.6B-1.9% $1.6B
R&D Expenses $511-100.0% $511.0M-3.2% $528.0M+4.8% $503.6M+1.8% $494.5M-2.1% $505.0M+5.0% $481.0M-2.8% $494.8M
SG&A Expenses $178-100.0% $178.0M-0.6% $179.0M+567.9% $26.8M-83.6% $163.9M+6.4% $154.0M+57.1% $98.0M-30.1% $140.3M
Operating Income $397-100.0% $397.0M+28.5% $309.0M-37.8% $497.1M+127.2% $218.8M-9.2% $241.0M-15.7% $286.0M+20.0% $238.4M
Interest Expense $1 $0 $0-100.0% $300K-57.1% $700K-30.0% $1.0M0.0% $1.0M+233.3% $300K
Income Tax $117-100.0% $117.0M+50.0% $78.0M-77.0% $338.4M+599.2% $48.4M-16.6% $58.0M+241.2% $17.0M+143.9% -$38.7M
Net Income $432-100.0% $432.0M+29.3% $334.0M+31.6% $253.8M-3.2% $262.1M-1.8% $267.0M-23.9% $351.0M-1.9% $357.7M
EPS (Diluted) $0.610.0% $0.61+29.8% $0.47 N/A $0.37-2.6% $0.38-22.4% $0.49 N/A

PANW Balance Sheet

Metric Q3'26 Q2'26 Q1'26 Q4'25 Q3'25 Q2'25 Q1'25 Q4'24
Total Assets $25K-100.0% $25.0B+6.1% $23.5B-0.2% $23.6B+7.1% $22.0B+5.0% $21.0B+2.8% $20.4B+1.9% $20.0B
Current Assets $8K-100.0% $8.4B+14.5% $7.3B-2.8% $7.5B+9.0% $6.9B+8.8% $6.3B+1.6% $6.2B-8.9% $6.8B
Cash & Equivalents $4K-100.0% $4.2B+35.6% $3.1B+35.1% $2.3B-4.8% $2.4B+7.1% $2.2B-2.5% $2.3B+48.7% $1.5B
Inventory N/A N/A N/A $113.4M N/A N/A N/A $115.9M
Accounts Receivable $2K-100.0% $2.1B+57.6% $1.3B-54.7% $3.0B+52.1% $1.9B+30.4% $1.5B+32.0% $1.1B-56.7% $2.6B
Goodwill $7K-100.0% $6.9B+51.8% $4.6B0.0% $4.6B+12.7% $4.1B0.0% $4.1B0.0% $4.1B+20.9% $3.4B
Total Liabilities $16K-100.0% $15.6B+4.8% $14.9B-5.6% $15.8B+6.6% $14.8B+1.3% $14.6B+0.8% $14.5B-2.4% $14.8B
Current Liabilities $8K-100.0% $8.0B+8.0% $7.4B-7.1% $8.0B+3.7% $7.7B+2.0% $7.6B+2.0% $7.4B-3.6% $7.7B
Long-Term Debt N/A N/A N/A N/A N/A N/A N/A N/A
Total Equity $9K-100.0% $9.4B+8.4% $8.7B+10.7% $7.8B+8.2% $7.2B+13.4% $6.4B+7.8% $5.9B+14.4% $5.2B
Retained Earnings $3K-100.0% $3.3B+15.3% $2.8B+13.4% $2.5B+11.4% $2.2B+13.3% $2.0B+15.7% $1.7B+26.0% $1.4B

PANW Cash Flow Statement

Metric Q3'26 Q2'26 Q1'26 Q4'25 Q3'25 Q2'25 Q1'25 Q4'24
Operating Cash Flow $2K-100.0% $554.0M-68.7% $1.8B+73.5% $1.0B+62.5% $628.2M+12.8% $557.0M-63.1% $1.5B+194.5% $512.7M
Capital Expenditures $254-100.0% $170.0M+102.4% $84.0M-2.7% $86.3M+27.1% $67.9M+41.5% $48.0M+9.1% $44.0M-7.2% $47.4M
Free Cash Flow $2K-100.0% $384.0M-77.2% $1.7B+80.5% $934.5M+66.8% $560.3M+10.1% $509.0M-65.3% $1.5B+215.1% $465.3M
Investing Cash Flow $332-100.0% $651.0M+166.2% -$983.0M-28.9% -$762.5M-47.4% -$517.2M-35.7% -$381.0M+30.0% -$544.0M-222.8% -$168.5M
Financing Cash Flow $106+100.0% -$114.0M-1525.0% $8.0M+102.1% -$374.1M-892.6% $47.2M+120.3% -$232.0M-5.5% -$220.0M-22.7% -$179.3M
Dividends Paid N/A N/A N/A N/A N/A N/A N/A N/A
Share Buybacks N/A N/A N/A $0 $0 $0 $0 $0

PANW Financial Ratios

Metric Q3'26 Q2'26 Q1'26 Q4'25 Q3'25 Q2'25 Q1'25 Q4'24
Gross Margin 77.6%+4.0pp 73.6%-0.6pp 74.2%+1.0pp 73.2%+0.3pp 72.9%-0.5pp 73.5%-0.6pp 74.1%+0.3pp 73.8%
Operating Margin 77.2%+61.9pp 15.3%+2.8pp 12.5%-7.1pp 19.6%+10.0pp 9.6%-1.1pp 10.7%-2.7pp 13.4%+2.5pp 10.9%
Net Margin 84.0%+67.4pp 16.7%+3.1pp 13.5%+3.5pp 10.0%-1.4pp 11.5%-0.4pp 11.8%-4.6pp 16.4%+0.1pp 16.3%
Return on Equity 4.6%0.0pp 4.6%+0.8pp 3.9%+0.6pp 3.2%-0.4pp 3.6%-0.6pp 4.2%-1.8pp 5.9%-1.0pp 6.9%
Return on Assets 1.7%0.0pp 1.7%+0.3pp 1.4%+0.3pp 1.1%-0.1pp 1.2%-0.1pp 1.3%-0.5pp 1.7%-0.1pp 1.8%
Current Ratio 1.040.0 1.04+0.1 0.99+0.0 0.94+0.0 0.90+0.1 0.840.0 0.84-0.0 0.89
Debt-to-Equity 1.660.0 1.66-0.1 1.72-0.3 2.01-0.0 2.04-0.2 2.29-0.2 2.45-0.4 2.87
FCF Margin 402.9%+388.1pp 14.8%-53.4pp 68.2%+31.3pp 36.8%+12.4pp 24.5%+1.9pp 22.6%-46.0pp 68.5%+47.3pp 21.3%

Note: The current ratio is below 1.0 (0.99), indicating current liabilities exceed current assets, which may suggest potential short-term liquidity concerns.

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Frequently Asked Questions

Palo Alto (PANW) reported $9.2B in total revenue for fiscal year 2025. This represents a 14.9% change compared to the previous fiscal year. Revenue measures the total income earned from the company's primary business operations before any expenses are deducted.

Palo Alto (PANW) revenue grew by 14.9% year-over-year, from $8.0B to $9.2B in fiscal year 2025.

Yes, Palo Alto (PANW) reported a net income of $1.1B in fiscal year 2025, with a net profit margin of 12.3%.

Palo Alto (PANW) reported diluted earnings per share of $1.60 for fiscal year 2025. This represents a -56.0% change compared to the previous fiscal year. EPS represents the portion of a company's net income allocated to each outstanding share of common stock and is widely used to evaluate profitability on a per-share basis.

Palo Alto (PANW) had EBITDA of $1.6B in fiscal year 2025, measuring earnings before interest, taxes, depreciation, and amortization.

Palo Alto (PANW) had a gross margin of 73.4% in fiscal year 2025, indicating the percentage of revenue retained after direct costs of goods sold.

Palo Alto (PANW) had an operating margin of 13.5% in fiscal year 2025, reflecting the profitability of core business operations before interest and taxes.

Palo Alto (PANW) had a net profit margin of 12.3% in fiscal year 2025, representing the share of revenue converted into profit after all expenses.

Palo Alto (PANW) has a return on equity of 13.1% for fiscal year 2025, measuring how efficiently the company generates profit from shareholder equity.

Palo Alto (PANW) generated $3.5B in free cash flow during fiscal year 2025. This represents a 11.9% change compared to the previous fiscal year. Free cash flow represents the cash a company generates after accounting for capital expenditures, and is widely used to assess financial flexibility and shareholder value.

Palo Alto (PANW) generated $3.7B in operating cash flow during fiscal year 2025, representing cash generated from core business activities.

Palo Alto (PANW) had $23.5B in total assets as of fiscal year 2025, including both current and long-term assets.

Palo Alto (PANW) invested $246.2M in capital expenditures during fiscal year 2025, funding long-term assets and infrastructure.

Palo Alto (PANW) invested $2.0B in research and development during fiscal year 2025.

Palo Alto (PANW) had 697M shares outstanding as of fiscal year 2025.

Palo Alto (PANW) had a current ratio of 0.99 as of fiscal year 2025, which is below 1.0, which may suggest potential liquidity concerns.

Palo Alto (PANW) had a debt-to-equity ratio of 1.72 as of fiscal year 2025, measuring the company's financial leverage by comparing total debt to shareholder equity.

Palo Alto (PANW) had a return on assets of 4.8% for fiscal year 2025, measuring how efficiently the company uses its assets to generate profit.

Palo Alto (PANW) has an Altman Z-Score of 5.97, placing it in the Safe Zone (low bankruptcy risk). The Z-Score combines five financial ratios—working capital, retained earnings, EBIT, market capitalization, and revenue relative to total assets—to predict the likelihood of bankruptcy. Scores above 2.99 indicate financial safety while scores below 1.81 suggest financial distress. Learn more in our complete guide to financial health indicators.

Palo Alto (PANW) has a Piotroski F-Score of 4 out of 9, indicating neutral financial health. The F-Score evaluates nine binary signals across profitability (positive ROA, positive cash flow, improving ROA, earnings quality), leverage (decreasing debt, improving liquidity, no share dilution), and operating efficiency (improving gross margin, improving asset turnover). Scores of 7–9 indicate strong and improving fundamentals. Learn more in our complete guide to financial health indicators.

Palo Alto (PANW) has an earnings quality ratio of 3.28x, considered cash-backed (high quality). This ratio compares operating cash flow to net income. A ratio above 1.0x means the company generates more cash than its reported earnings, indicating sustainable, cash-backed profits. Ratios below 1.0x suggest earnings rely on accounting accruals rather than actual cash generation. Learn more in our complete guide to financial health indicators.

Palo Alto (PANW) has an interest coverage ratio of 414.3x, meaning it can comfortably cover its interest obligations. This ratio divides operating income by interest expense. Ratios above 5x indicate strong debt-servicing ability, while ratios below 2x suggest the company may face difficulty meeting interest payments if earnings decline. Learn more in our complete guide to financial health indicators.

Palo Alto (PANW) scores 55 out of 100 on our Financial Profile, indicating moderate overall financial health. This composite score evaluates six dimensions: profitability (operating margin), revenue growth, leverage (debt-to-equity), liquidity (current ratio), cash flow quality (free cash flow margin), and shareholder returns (return on equity). Each dimension is normalized against standard financial benchmarks. Learn more in our complete guide to financial health indicators.

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