Common-Size Income Statement
Quarterly Data
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- Analysis of Short-term (Operating) Activity Ratios
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Net Profit Margin since 2012
- Price to Earnings (P/E) since 2012
- Price to Book Value (P/BV) since 2012
- Price to Sales (P/S) since 2012
- Analysis of Revenues
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Palo Alto Networks Inc., common-size consolidated income statement (quarterly data)
Based on: 10-Q (reporting date: 2026-04-30), 10-Q (reporting date: 2026-01-31), 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).
The financial trajectory over the analyzed period demonstrates a strategic transition toward a recurring revenue model and a significant improvement in operational efficiency, culminating in a shift from consistent operating losses to sustained profitability, despite a sharp downturn in the final recorded quarter.
- Revenue Composition and Mix
- A structural shift in revenue streams is evident, with Product revenue declining from approximately 30% of total revenue in late 2019 to roughly 20% by 2026. Conversely, Subscription and Support revenue increased from 70% to over 80% during the same period. This indicates a successful pivot toward a software-as-a-service (SaaS) or subscription-based business model, which typically offers higher predictability and scalability.
- Gross Margin Trends
- Gross profit margins remained relatively resilient, generally fluctuating between 68% and 75%. A gradual improvement in gross margin is observed from 2020 through 2025, peaking at 74.83% in October 2023. This improvement was supported by a reduction in the cost of product revenue as a percentage of total revenue. However, a notable contraction to 67.55% occurred in April 2026, marking the lowest gross margin in the latter half of the analyzed period.
- Operating Expense Optimization
- Significant operating leverage is observed as operating expenses as a percentage of revenue declined from a peak of 79.50% in April 2021 to lows around 53.63% in July 2025. The most substantial reductions occurred in Sales and Marketing expenses, which dropped from 47.38% in October 2019 to approximately 31-33% in 2025. General and Administrative expenses also trended downward, though they exhibited higher volatility, including a sharp decline to 1.08% in July 2025 before returning to higher levels.
- Profitability and Bottom-Line Performance
- The company transitioned from a period of consistent operating losses (averaging between -4% and -10% of revenue from 2019 to 2021) to consistent operating profitability starting in July 2022. Operating income peaked at 19.60% of revenue in July 2025. Net income mirrored this trend, with a significant anomaly occurring in January 2024, where net income surged to 88.45% of revenue, driven primarily by a one-time tax benefit of 81.59%. This positive trend reversed sharply in April 2026, with net income falling to -5.90%.
- Financial Obligations and Other Income
- Interest expenses as a percentage of revenue declined precipitously from 2.45% in October 2019 to near-zero levels by 2025, suggesting a reduction in debt burden or an optimization of the capital structure. Simultaneously, other income (net) increased from 2.10% to a peak of 5.86% in January 2026, providing a supplementary buffer to the pre-tax income throughout the latter years of the analysis.