Stock Analysis on Net
Stock Analysis on Net

Palo Alto Networks Inc. (NASDAQ:PANW)

$24.99

Common-Size Income Statement
Quarterly Data

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Palo Alto Networks Inc., common-size consolidated income statement (quarterly data)

Microsoft Excel
3 months ended: Oct 31, 2025 Jul 31, 2025 Apr 30, 2025 Jan 31, 2025 Oct 31, 2024 Jul 31, 2024 Apr 30, 2024 Jan 31, 2024 Oct 31, 2023 Jul 31, 2023 Apr 30, 2023 Jan 31, 2023 Oct 31, 2022 Jul 31, 2022 Apr 30, 2022 Jan 31, 2022 Oct 31, 2021 Jul 31, 2021 Apr 30, 2021 Jan 31, 2021 Oct 31, 2020 Jul 31, 2020 Apr 30, 2020 Jan 31, 2020 Oct 31, 2019
Product
Subscription and support
Revenue
Product
Subscription and support
Cost of revenue
Gross profit
Research and development
Sales and marketing
General and administrative
Operating expenses
Operating income (loss)
Interest expense
Other income (expense), net
Income (loss) before income taxes
(Provision for) benefit from income taxes
Net income (loss)

Based on: 10-Q (reporting date: 2025-10-31), 10-K (reporting date: 2025-07-31), 10-Q (reporting date: 2025-04-30), 10-Q (reporting date: 2025-01-31), 10-Q (reporting date: 2024-10-31), 10-K (reporting date: 2024-07-31), 10-Q (reporting date: 2024-04-30), 10-Q (reporting date: 2024-01-31), 10-Q (reporting date: 2023-10-31), 10-K (reporting date: 2023-07-31), 10-Q (reporting date: 2023-04-30), 10-Q (reporting date: 2023-01-31), 10-Q (reporting date: 2022-10-31), 10-K (reporting date: 2022-07-31), 10-Q (reporting date: 2022-04-30), 10-Q (reporting date: 2022-01-31), 10-Q (reporting date: 2021-10-31), 10-K (reporting date: 2021-07-31), 10-Q (reporting date: 2021-04-30), 10-Q (reporting date: 2021-01-31), 10-Q (reporting date: 2020-10-31), 10-K (reporting date: 2020-07-31), 10-Q (reporting date: 2020-04-30), 10-Q (reporting date: 2020-01-31), 10-Q (reporting date: 2019-10-31).

Revenue Composition
The company’s revenue primarily consists of two components: Product and Subscription and Support. The Subscription and Support portion generally dominates, ranging mostly between 70% and 83% of total revenue over the periods. The Product portion fluctuates more significantly, starting near 30% but trending downward with some intermittent recoveries, reaching as low as around 16% to 18% in later periods. This suggests a sustained focus on recurring revenue sources.
Cost of Revenue and Gross Profit
The cost of revenue remains relatively stable, fluctuating roughly between 25% and 31% of revenue. This steadiness contributes to a gross profit margin consistently around 69% to 74%. Notably, gross profit percent improves slightly in the latter periods, reaching above 74%, indicating better cost management or favorable business mix effects.
Operating Expenses
Operating expenses as a percentage of revenue have shown a declining trend over time, dropping from the high 70% range in earlier periods to closer to 60% in more recent ones. Sales and marketing expenses show a moderate decrease from approximately 47% initially to about 33% later, while research and development expenses fluctuate in the low to mid-20% range but appear to trend slightly downward towards the end of the series. General and administrative expenses vary more widely, with an unusual increase to 15.27% in one period, but typically fall between 6% and 9% elsewhere.
Operating Income
The operating income percentage saw significant improvement over the periods observed. Initially negative, often between -10% and -5%, it transitions to positive territory starting around mid-2022. Positive operating income peaks above 19% in selected recent quarters, reflecting substantial operational efficiency gains and expense control.
Interest Expense and Other Income/Expenses
Interest expense has steadily decreased as a percentage of revenue, moving from above 2% early on to nearly negligible levels under 0.5% in recent quarters. Concurrently, other income (expense), net, exhibits an overall positive contribution to income, with values rising from slightly positive figures to consistent contributions around 3% to 4% in recent periods, enhancing overall profitability.
Profitability Trends
The income before income taxes follows the improvement pattern of operating income, moving from negative percentages to significantly positive levels, peaking above 23% in some periods. The provision for income taxes displays variability, with fluctuations including occasional income tax benefits and spikes in the effective tax rate. This inconsistency impacts net income but does not obscure the overall positive earnings trend as net income moves from negative territory (-7% to -14%) in early periods to solid positive margins over 10% in most recent quarters, with a notable outlier of an exceptionally high net income percentage corresponding with an abnormal tax benefit.
Summary
Overall, the data presents a company shifting towards higher profitability and stronger operational efficiency over time. The growing dominance of subscription and support revenue enhances stability, while gross margins remain robust. Operating expenses are being better managed, leading to improved operating income and net income results. The reduction in interest burden and increasing other income augment overall profitability, despite some volatility in tax expenses. The trends suggest positive momentum in financial health across the observed quarterly periods.