Revenue growth accelerated to 31.1% in 2026Q3, though gross margins contracted to 67.6% as the company prioritized platform adoption over immediate profitability.
| Metric | TTM | Jul'25 | Jul'24 | Jul'23 | Jul'22 | Jul'21 | Jul'20 | Jul'19 | Jul'18 | Jul'17 | Jul'16 | Jul'15 | Jul'14 | Jul'13 | Jul'12 | Jul'11 | Jul'10 |
|---|
| Sales/Revenue | 10.61B | 9.22B | 8.03B | 6.89B | 5.5B | 4.26B | 3.41B | 2.9B | 2.27B | 1.76B | 1.38B | 928.05M | 598.18M | 396.11M | 255.14M | 118.6M | 48.78M |
| Revenue Growth % | 19.51% | 14.87% | 16.46% | 25.29% | 29.26% | 24.87% | 17.55% | 27.56% | 29.04% | 27.79% | 48.54% | 55.15% | 51.01% | 55.25% | 115.13% | 143.12% | - |
| Cost of Goods Sold | 2.98B | 2.45B | 2.06B | 1.91B | 1.72B | 1.27B | 999.5M | 808.4M | 645.3M | 476.6M | 370M | 251.5M | 159.63M | 109.76M | 70.55M | 32.27M | 15.63M |
| COGS % of Revenue | - | 26.59% | 25.65% | 27.71% | 31.24% | 29.95% | 29.32% | 27.88% | 28.39% | 27.05% | 26.84% | 27.1% | 26.69% | 27.71% | 27.65% | 27.21% | 32.05% |
| Gross Profit | 7.63B | 6.77B | 5.97B | 4.98B | 3.78B | 2.98B | 2.41B | 2.09B | 1.63B | 1.28B | 1.01B | 676.55M | 438.55M | 286.35M | 184.59M | 86.32M | 33.15M |
| Gross Margin % | 71.94% | 73.41% | 74.35% | 72.29% | 68.76% | 70.05% | 70.68% | 72.12% | 71.61% | 72.95% | 73.16% | 72.9% | 73.31% | 72.29% | 72.35% | 72.79% | 67.95% |
| Gross Profit Growth % | - | 13.43% | 19.77% | 31.73% | 26.89% | 23.76% | 15.19% | 28.47% | 26.68% | 27.42% | 49.06% | 54.27% | 53.15% | 55.13% | 113.83% | 160.42% | - |
| Operating Expenses | 6.61B | 5.53B | 5.28B | 4.6B | 3.97B | 3.29B | 2.59B | 2.15B | 1.73B | 1.44B | 1.17B | 776.4M | 653.9M | 304.97M | 180.69M | 96.73M | 53.8M |
| OpEx % of Revenue | - | 59.94% | 65.83% | 66.67% | 72.19% | 77.19% | 75.93% | 73.99% | 76.23% | 82% | 84.57% | 83.66% | 109.32% | 76.99% | 70.82% | 81.56% | 110.3% |
| Selling, General & Admin | 4.33B | 3.54B | 3.48B | 2.99B | 2.55B | 2.14B | 1.82B | 1.61B | 1.33B | 1.1B | 881.6M | 590.6M | 407.9M | 242.49M | 142.12M | 75.36M | 41.02M |
| SG&A % of Revenue | - | 38.42% | 43.29% | 43.4% | 46.42% | 50.4% | 53.39% | 55.38% | 58.6% | 62.28% | 63.95% | 63.64% | 68.19% | 61.22% | 55.7% | 63.54% | 84.08% |
| Research & Development | 2.28B | 1.98B | 1.81B | 1.6B | 1.42B | 1.14B | 768.1M | 539.5M | 400.7M | 347.4M | 284.2M | 185.83M | 104.81M | 62.48M | 38.57M | 21.37M | 12.79M |
| R&D % of Revenue | - | 21.52% | 22.54% | 23.27% | 25.77% | 26.79% | 22.54% | 18.61% | 17.63% | 19.72% | 20.62% | 20.02% | 17.52% | 15.77% | 15.12% | 18.02% | 26.21% |
| Other Operating Expenses | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 141.2M | 0 | 0 | 0 | 0 |
| Operating Income | 1.02B | 1.24B | 683.9M | 387.3M | -188.8M | -304.1M | -179M | -54.1M | -104.2M | -165.8M | -157.3M | -99.8M | -215.3M | -18.62M | 3.89M | -10.4M | -20.66M |
| Operating Margin % | 9.65% | 13.48% | 8.52% | 5.62% | -3.43% | -7.14% | -5.25% | -1.87% | -4.58% | -9.41% | -11.41% | -10.75% | -35.99% | -4.7% | 1.53% | -8.77% | -42.35% |
| Operating Income Growth % | - | 81.74% | 76.58% | 305.14% | 37.92% | -69.89% | -230.87% | 48.08% | 37.15% | -5.4% | -57.62% | 53.65% | -1056.22% | -578.57% | 137.4% | 49.63% | - |
| EBITDA | 1.4B | 1.59B | 967.2M | 669.5M | 93.8M | -43.7M | 27.1M | 99.7M | -7.8M | -106M | -114.5M | -70.9M | -195.9M | -8.73M | 10.03M | -8.21M | -19.53M |
| EBITDA Margin % | 13.15% | 17.2% | 12.05% | 9.71% | 1.7% | -1.03% | 0.8% | 3.44% | -0.34% | -6.02% | -8.31% | -7.64% | -32.75% | -2.2% | 3.93% | -6.93% | -40.04% |
| EBITDA Growth % | 5.74% | 64.01% | 44.47% | 613.75% | 314.65% | -261.25% | -72.82% | 1378.21% | 92.64% | 7.42% | -61.5% | 63.81% | -2144.24% | -187.07% | 222.03% | 57.95% | - |
| D&A (Non-Cash Add-back) | 371.8M | 343.4M | 283.3M | 282.2M | 282.6M | 260.4M | 206.1M | 153.8M | 96.4M | 59.8M | 42.8M | 28.9M | 19.4M | 9.89M | 6.13M | 2.19M | 1.12M |
| EBIT | 1.4B | 1.6B | 993.1M | 586.8M | -187M | -307M | -146.6M | 9.3M | -75.7M | -155.6M | -148.9M | -99.6M | -220.3M | -18.58M | 2.83M | -10.4M | -20.66M |
| Net Interest Income | 382.7M | 360.8M | 309.6M | 197.2M | -11.8M | -154.6M | -47.3M | -14.1M | -2.5M | -9.8M | -14.6M | -18.4M | -1.9M | -74K | -36K | 3K | 4K |
| Interest Income | 383.1M | 363.5M | 317.9M | 224.4M | 15.6M | 8.5M | 41.4M | 69.8M | 27.1M | 14.7M | 8.8M | 3.9M | 0 | 484K | 18K | 3K | 4K |
| Interest Expense | 400K | 3M | 8.3M | 27.2M | 27.4M | 163.3M | 88.7M | 83.9M | 29.6M | 24.5M | 23.4M | 22.32M | 1.88M | 35K | 2.2M | 0 | 0 |
| Other Income/Expense | 373.6M | 352.8M | 304.4M | 179M | -18.4M | -160.9M | -52.8M | -20.5M | -1.1M | -28.3M | -15M | -22.04M | -6.86M | -35K | -1.09M | -1.65M | -420K |
| Pretax Income | 1.4B | 1.6B | 988.3M | 566.3M | -207.2M | -465M | -231.8M | -74.6M | -130.2M | -194.1M | -205.1M | -155.58M | -222.16M | -18.66M | 2.8M | -12.05M | -21.08M |
| Pretax Margin % | 13.17% | 17.3% | 12.31% | 8.22% | -3.77% | -10.93% | -6.8% | -2.57% | -5.73% | -11.02% | -14.88% | -16.76% | -37.14% | -4.71% | 1.1% | -10.16% | -43.21% |
| Income Tax | 554M | 461.8M | -1.59B | 126.6M | 59.8M | 33.9M | 35.2M | 7.3M | 17.7M | 22.5M | 20.8M | 9.4M | 4.29M | 10.59M | 2.06M | 476K | 56K |
| Effective Tax Rate % | 39.66% | 28.94% | -160.81% | 22.36% | -28.86% | -7.29% | -15.19% | -9.79% | -13.59% | -11.59% | -10.14% | -6.05% | -1.93% | -56.76% | 73.67% | -3.95% | -0.27% |
| Net Income | 842.8M | 1.13B | 2.58B | 439.7M | -267M | -498.9M | -267M | -81.9M | -147.9M | -216.6M | -225.9M | -164.98M | -226.45M | -29.25M | 737K | -12.53M | -21.13M |
| Net Margin % | 7.95% | 12.3% | 32.11% | 6.38% | -4.85% | -11.72% | -7.83% | -2.82% | -6.51% | -12.3% | -16.39% | -17.78% | -37.86% | -7.38% | 0.29% | -10.56% | -43.32% |
| Net Income Growth % | -31.93% | -56.01% | 486.22% | 264.68% | 46.48% | -86.85% | -226.01% | 44.62% | 31.72% | 4.12% | -36.92% | 27.14% | -674.3% | -4068.25% | 105.88% | 40.72% | - |
| Net Income (Continuing) | 842.8M | 1.13B | 2.58B | 439.7M | -267M | -498.9M | -267M | -81.9M | -122.2M | -216.6M | -192.7M | -164.98M | -226.45M | -29.25M | 737K | -12.53M | -21.13M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 1.13 | 1.60 | 3.64 | 0.64 | -0.45 | -0.86 | -0.46 | -0.15 | -0.27 | -0.40 | -0.43 | -0.34 | -0.51 | -0.07 | 0.00 | -0.03 | -0.07 |
| EPS Growth % | -34.29% | -56.04% | 468.75% | 242.22% | 47.67% | -86.96% | -217.24% | 46.3% | 32.5% | 6.98% | -28.36% | 34.31% | -628.57% | - | 105.55% | 50.08% | - |
| EPS (Basic) | - | 1.71 | 4.04 | 0.73 | -0.45 | -0.86 | -0.46 | -0.15 | -0.27 | -0.40 | -0.43 | -0.34 | -0.51 | -0.07 | 0.00 | -0.04 | -0.07 |
| Diluted Shares Outstanding | 744M | 709.3M | 708M | 684.6M | 591M | 578.4M | 581.4M | 567M | 550.2M | 543.6M | 522.6M | 489.6M | 445.8M | 412.09M | 400.24M | 385.97M | 331.71M |
| Basic Shares Outstanding | 729M | 662.5M | 638.4M | 606.4M | 591M | 578.4M | 581.4M | 567M | 550.2M | 543.6M | 522.6M | 489.6M | 445.8M | 412.09M | 400.24M | 350.53M | 331.71M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
Platformization margin dilution risk
According to the most recent quarterly data, PANW achieved a significant revenue growth acceleration to 31.1% in 2026Q3, marking a sharp departure from the mid-teens growth rates observed in previous periods as the company aggressively pushes its integrated platform strategy to capture broader enterprise market share.
The sudden jump in top-line expansion suggests that the company's 'platformization' strategy is successfully driving higher volume, likely through aggressive customer acquisition incentives. Investors should monitor whether this growth is sustainable or if it reflects a pull-forward of demand resulting from temporary discounting and deferred payment terms.
As reported in the latest financial statements, PANW's gross margin contracted to 67.6% in 2026Q3, representing a notable decline from the historical 73-74% range, which may indicate rising costs associated with cloud-delivered security services or the impact of aggressive pricing strategies used to displace competitors.
The erosion of gross margin suggests that the shift toward cloud-native security architectures is introducing higher third-party hosting costs that are not yet fully offset by pricing power. This trend warrants further investigation into whether the company can maintain its premium positioning while scaling its lower-margin subscription services.
Based on the reported figures for 2026Q3, the company experienced a negative operating margin of 6.1%, a significant reversal from the 15.4% margin achieved in 2026Q2, highlighting the heavy burden of elevated R&D and SG&A expenses required to sustain the current platform-centric growth trajectory.
The inability to scale operating income alongside revenue suggests that the company is currently prioritizing market share acquisition over immediate profitability. This appears to be a deliberate trade-off, but it leaves the bottom line highly sensitive to any potential slowdown in top-line momentum.
As indicated by the 2026Q3 net loss of $177 million, the quality of earnings appears volatile, with the company swinging from significant profitability in prior quarters to losses, largely driven by the interplay between aggressive operational spending and the timing of large-scale, multi-year contract recognitions.
The sharp swing in net income suggests that GAAP results may not fully capture the underlying economic health of the business due to the lumpy nature of enterprise deal cycles. Analysts should look past these quarterly fluctuations to assess whether the underlying RPO growth is sufficient to justify the current level of operational expenditure.
Quick answers to the most common questions about buying PANW stock.
For fiscal year 2025, Palo Alto Networks, Inc. (PANW) reported total revenue of $9.22B. This represents a 18803.5% increase compared to $48.8M in 2010.
Palo Alto Networks, Inc. (PANW) is profitable, generating $1.13B in net income for the fiscal year ending 2025 with a net profit margin of 12.3%.
Palo Alto Networks, Inc. (PANW) reported an operating income of $1.24B, resulting in an operating profit margin of 13.5%. This margin reflects the operational efficiency of the business before interest and taxes.
Palo Alto Networks, Inc. (PANW) generated $6.77B in gross profit for the year, representing a gross profit margin of 73.4%. This demonstrates the company's core pricing power and production efficiency.