EVA is registered trademark of Stern Stewart.

Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

Economic Profit
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

Palo Alto Networks Inc., economic profit calculation

US$ in thousands

12 months ended:	Jul 31, 2025	Jul 31, 2024	Jul 31, 2023	Jul 31, 2022	Jul 31, 2021	Jul 31, 2020
Net operating profit after taxes (NOPAT)¹	1,790,811)	2,501,707)	2,610,314)	1,717,615)	845,076)	696,422)
Cost of capital²	18.54%	18.01%	17.39%	16.48%	16.93%	16.19%
Invested capital³	12,434,500)	10,841,500)	9,129,500)	8,704,600)	7,360,500)	7,029,200)

Economic profit⁴	(513,948)	548,912)	1,022,630)	282,770)	(401,022)	(441,463)

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

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2025 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 1,790,811 – 18.54% × 12,434,500 = -513,948

The financial trajectory from 2020 to 2025 reflects a period of significant operational expansion followed by a contraction in economic value creation. The company transitioned from a state of value destruction to substantial value creation, before returning to negative economic profit in the final year of the period.

Net Operating Profit After Taxes (NOPAT): A strong upward trend is observed between 2020 and 2023, with NOPAT increasing from 696,422 thousand US$ to a peak of 2,610,314 thousand US$. This represents a significant expansion in operational profitability. However, a reversal occurred after 2023, with profitability declining to 1,790,811 thousand US$ by 2025.
Invested Capital and Cost of Capital: Invested capital demonstrates a consistent and uninterrupted increase throughout the six-year period, rising from 7,029,200 thousand US$ in 2020 to 12,434,500 thousand US$ in 2025. Parallel to this expansion in capital, the cost of capital exhibited a general upward trend, moving from 16.19% to 18.54%. This combination indicates that the company is investing more capital while facing a higher hurdle rate for generating returns.
Economic Profit Performance: Economic profit remained negative in 2020 and 2021, indicating that operating returns were insufficient to cover the cost of capital. A pivotal shift occurred in 2022, where economic profit turned positive, reaching a maximum of 1,022,630 thousand US$ in 2023. This peak coincided with the highest observed NOPAT and a relatively controlled level of invested capital. By 2025, economic profit fell to -513,948 thousand US$, driven by the convergence of declining NOPAT, an increasing cost of capital, and a significantly expanded capital base.

AI Ask an analyst for more

Download chart

Palo Alto Networks Inc., NOPAT calculation

US$ in thousands

12 months ended:	Jul 31, 2025	Jul 31, 2024	Jul 31, 2023	Jul 31, 2022	Jul 31, 2021	Jul 31, 2020
Net income (loss)	1,133,900)	2,577,600)	439,700)	(267,000)	(498,900)	(267,000)
Deferred income tax expense (benefit)¹	(349,700)	(2,033,800)	12,500)	(3,100)	(12,400)	(9,100)
Increase (decrease) in allowance for credit losses²	2,200)	(300)	(1,100)	(2,300)	8,900)	1,500)
Increase (decrease) in deferred revenue³	1,271,400)	2,184,100)	2,302,400)	1,970,000)	1,213,800)	921,500)
Increase (decrease) in equity equivalents⁴	923,900)	150,000)	2,313,800)	1,964,600)	1,210,300)	913,900)
Interest expense	3,000)	8,300)	27,200)	27,400)	163,300)	88,700)
Interest expense, operating lease liability⁵	22,540)	23,659)	15,952)	13,536)	14,410)	15,386)
Adjusted interest expense	25,540)	31,959)	43,152)	40,936)	177,710)	104,086)
Tax benefit of interest expense⁶	(5,363)	(6,711)	(9,062)	(8,597)	(37,319)	(21,858)
Adjusted interest expense, after taxes⁷	20,176)	25,248)	34,090)	32,339)	140,391)	82,228)
Interest income	(363,500)	(317,900)	(224,400)	(15,600)	(8,500)	(41,400)
Investment income, before taxes	(363,500)	(317,900)	(224,400)	(15,600)	(8,500)	(41,400)
Tax expense (benefit) of investment income⁸	76,335)	66,759)	47,124)	3,276)	1,785)	8,694)
Investment income, after taxes⁹	(287,165)	(251,141)	(177,276)	(12,324)	(6,715)	(32,706)
Net operating profit after taxes (NOPAT)	1,790,811)	2,501,707)	2,610,314)	1,717,615)	845,076)	696,422)

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

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowance for credit losses.

³ Addition of increase (decrease) in deferred revenue.

⁴ Addition of increase (decrease) in equity equivalents to net income (loss).

⁵ 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 417,400 × 5.40% = 22,540

⁶ 2025 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 25,540 × 21.00% = 5,363

⁷ Addition of after taxes interest expense to net income (loss).

⁸ 2025 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 363,500 × 21.00% = 76,335

⁹ Elimination of after taxes investment income.

Net Income (Loss)

The net income exhibited significant volatility across the periods presented. Initially, there was a substantial loss of $267 million in 2020, which deepened to nearly $499 million in 2021. In 2022, the loss reduced to $267 million, indicating some recovery. Subsequently, in 2023, the company returned to profitability with a net income of approximately $440 million.

Notably, in 2024 net income surged dramatically to approximately $2.58 billion, representing a significant upward trend. However, in 2025, net income declined to about $1.13 billion, still maintaining a profit but at a reduced level compared to the previous year.

Net Operating Profit After Taxes (NOPAT)

NOPAT demonstrated a continuous growth trend from 2020 through 2023. Starting at approximately $696 million in 2020, it increased to $845 million in 2021. The upward trajectory accelerated in 2022 with NOPAT reaching about $1.72 billion and peaked at around $2.61 billion in 2023.

Following the peak, NOPAT decreased in 2024 and 2025 to approximately $2.50 billion and $1.79 billion, respectively. Although these declines represent a downward adjustment from the 2023 high, NOPAT levels in 2024 and 2025 remain substantially higher than in the initial years.

Overall Trends and Insights

There is a clear pattern of financial improvement over the period analyzed. Both net income and NOPAT shifted from negative or moderate levels in the earlier years to significant positive figures in later periods.

The net income recovery and subsequent profits after 2022 suggest enhanced operational efficiency or impactful business activities, given that NOPAT, a measure of operational profitability, generally increased prior to and during the years of rising net income.

The reduction in net income and NOPAT in 2025 compared to the previous year could indicate emerging challenges or a normalization after an exceptionally high period in 2024. Nevertheless, profitability remains robust relative to earlier years.

AI Ask an analyst for more

Download chart

Palo Alto Networks Inc., cash operating taxes calculation

US$ in thousands

12 months ended:	Jul 31, 2025	Jul 31, 2024	Jul 31, 2023	Jul 31, 2022	Jul 31, 2021	Jul 31, 2020
Provision for (benefit from) income taxes	461,800)	(1,589,300)	126,600)	59,800)	33,900)	35,200)
Less: Deferred income tax expense (benefit)	(349,700)	(2,033,800)	12,500)	(3,100)	(12,400)	(9,100)
Add: Tax savings from interest expense	5,363)	6,711)	9,062)	8,597)	37,319)	21,858)
Less: Tax imposed on investment income	76,335)	66,759)	47,124)	3,276)	1,785)	8,694)
Cash operating taxes	740,528)	384,452)	76,038)	68,221)	81,834)	57,464)

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

Provision for (benefit from) income taxes: The provision for income taxes shows considerable volatility over the analyzed period. Initially, the values remain positive and relatively stable from 2020 through 2023, increasing from 35,200 to 126,600 thousand US dollars. However, in 2024, there is a significant negative spike, with the provision recorded as a benefit amounting to -1,589,300 thousand US dollars. This sudden reversal likely indicates a substantial tax credit or adjustment during this year. In 2025, the provision shifts back to a positive figure of 461,800 thousand US dollars, indicating another major change in tax positioning.
Cash operating taxes: Cash operating taxes demonstrate a steady upward trend from 2020 to 2025. The figures increase from 57,464 thousand US dollars in 2020 to 74,038 thousand US dollars in 2023, showing consistent growth. Notably, cash taxes surge dramatically in 2024 and 2025, reaching 384,452 and 740,528 thousand US dollars, respectively. This sharp increase in cash taxes contrasts with the provision for income taxes' negative spike in 2024, suggesting differences in the timing or nature of book versus cash tax recognition during these years.

AI Ask an analyst for more

Download chart

Palo Alto Networks Inc., invested capital calculation (financing approach)

US$ in thousands

	Jul 31, 2025	Jul 31, 2024	Jul 31, 2023	Jul 31, 2022	Jul 31, 2021	Jul 31, 2020
Current portion of convertible senior notes, net	—)	963,900)	1,991,500)	3,676,800)	1,557,900)	—)
Convertible senior notes, net, excluding current portion	—)	—)	—)	—)	1,668,100)	3,084,100)
Operating lease liability¹	417,400)	446,400)	339,400)	338,400)	379,200)	394,500)
Total reported debt & leases	417,400)	1,410,300)	2,330,900)	4,015,200)	3,605,200)	3,478,600)
Stockholders’ equity	7,824,400)	5,169,700)	1,748,400)	210,000)	634,500)	1,101,800)
Net deferred tax (assets) liabilities²	(2,334,900)	(2,011,300)	5,400)	(11,200)	(9,100)	(9,000)
Allowance for credit losses³	9,700)	7,500)	7,800)	8,900)	11,200)	2,300)
Deferred revenue⁴	12,751,900)	11,480,500)	9,296,400)	6,994,000)	5,024,000)	3,810,200)
Equity equivalents⁵	10,426,700)	9,476,700)	9,309,600)	6,991,700)	5,026,100)	3,803,500)
Accumulated other comprehensive (income) loss, net of tax⁶	(48,400)	1,600)	43,200)	55,600)	9,900)	(10,500)
Adjusted stockholders’ equity	18,202,700)	14,648,000)	11,101,200)	7,257,300)	5,670,500)	4,894,800)
Available-for-sale investments⁷	(6,185,600)	(5,216,800)	(4,302,600)	(2,567,900)	(1,915,200)	(1,344,200)
Invested capital	12,434,500)	10,841,500)	9,129,500)	8,704,600)	7,360,500)	7,029,200)

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

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of allowance for doubtful accounts receivable.

⁴ Addition of deferred revenue.

⁵ Addition of equity equivalents to stockholders’ equity.

⁶ Removal of accumulated other comprehensive income.

⁷ Subtraction of available-for-sale investments.

The analysis of the financial data reveals several notable trends over the observed periods.

Total Reported Debt & Leases: This item shows a decreasing trend from the fiscal year ending July 31, 2020 through July 31, 2025. The debt stood at approximately 3.48 billion USD in 2020 and increased slightly to around 3.61 billion USD in 2021. Afterward, the amount peaked in 2022 at roughly 4.02 billion USD before embarking on a steady decline each year. By 2025, the total reported debt and leases had decreased significantly to about 417 million USD, indicating a substantial reduction in the company's leverage or obligations over the period.
Stockholders’ Equity: Stockholders’ equity initially decreased sharply from approximately 1.10 billion USD in 2020 to 210 million USD by 2022, suggesting potential losses, share repurchases, or other equity-reducing activities during this interval. However, beginning in 2023, equity increased markedly, reaching 1.75 billion USD and continuing to grow substantially to about 5.17 billion USD in 2024 and further to 7.82 billion USD in 2025. This strong recovery and subsequent growth may indicate improved profitability, capital infusions, or retained earnings enhancement.
Invested Capital: Invested capital displayed a consistent upward trajectory throughout all periods. Starting at roughly 7.03 billion USD in 2020, it increased gradually each year, reaching approximately 12.43 billion USD by 2025. This steady rise suggests ongoing investment into the company's operations and assets, potentially to support growth strategies or expansion initiatives.

In summary, the financial data indicates a strategic reduction of debt alongside a significant increase in equity and invested capital over the observed period. This combination points towards strengthening financial stability and potentially enhanced capacity for growth and value creation.

AI Ask an analyst for more

Download chart

Palo Alto Networks Inc., cost of capital calculations

Jul 31, 2025

	Capital (fair value)¹	Weights					Cost of capital
Equity²	127,438,828)	127,438,828)	÷	127,856,228)	=	1.00	1.00	×	18.58%	=	18.52%
Convertible Senior Notes³	—)	—)	÷	127,856,228)	=	0.00	0.00	×	0.00% × (1 – 21.00%)	=	0.00%
Operating lease liability⁴	417,400)	417,400)	÷	127,856,228)	=	0.00	0.00	×	5.40% × (1 – 21.00%)	=	0.01%
Total:	127,856,228)					1.00					18.54%

Based on: 10-K (reporting date: 2025-07-31).

¹ US$ in thousands

² Equity. See details »

³ Convertible Senior Notes. See details »

⁴ Operating lease liability. See details »

Jul 31, 2024

	Capital (fair value)¹	Weights					Cost of capital
Equity²	109,342,992)	109,342,992)	÷	112,989,392)	=	0.97	0.97	×	18.58%	=	17.98%
Convertible Senior Notes³	3,200,000)	3,200,000)	÷	112,989,392)	=	0.03	0.03	×	0.60% × (1 – 21.00%)	=	0.01%
Operating lease liability⁴	446,400)	446,400)	÷	112,989,392)	=	0.00	0.00	×	5.30% × (1 – 21.00%)	=	0.02%
Total:	112,989,392)					1.00					18.01%

Based on: 10-K (reporting date: 2024-07-31).

¹ US$ in thousands

² Equity. See details »

³ Convertible Senior Notes. See details »

⁴ Operating lease liability. See details »

Jul 31, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	74,902,082)	74,902,082)	÷	80,241,482)	=	0.93	0.93	×	18.58%	=	17.35%
Convertible Senior Notes³	5,000,000)	5,000,000)	÷	80,241,482)	=	0.06	0.06	×	0.60% × (1 – 21.00%)	=	0.03%
Operating lease liability⁴	339,400)	339,400)	÷	80,241,482)	=	0.00	0.00	×	4.70% × (1 – 21.00%)	=	0.02%
Total:	80,241,482)					1.00					17.39%

Based on: 10-K (reporting date: 2023-07-31).

¹ US$ in thousands

² Equity. See details »

³ Convertible Senior Notes. See details »

⁴ Operating lease liability. See details »

Jul 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	52,918,954)	52,918,954)	÷	59,957,354)	=	0.88	0.88	×	18.58%	=	16.40%
Convertible Senior Notes³	6,700,000)	6,700,000)	÷	59,957,354)	=	0.11	0.11	×	0.74% × (1 – 21.00%)	=	0.07%
Operating lease liability⁴	338,400)	338,400)	÷	59,957,354)	=	0.01	0.01	×	4.00% × (1 – 21.00%)	=	0.02%
Total:	59,957,354)					1.00					16.48%

Based on: 10-K (reporting date: 2022-07-31).

¹ US$ in thousands

² Equity. See details »

³ Convertible Senior Notes. See details »

⁴ Operating lease liability. See details »

Jul 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	45,609,438)	45,609,438)	÷	51,488,638)	=	0.89	0.89	×	18.58%	=	16.46%
Convertible Senior Notes³	5,500,000)	5,500,000)	÷	51,488,638)	=	0.11	0.11	×	5.30% × (1 – 21.00%)	=	0.45%
Operating lease liability⁴	379,200)	379,200)	÷	51,488,638)	=	0.01	0.01	×	3.80% × (1 – 21.00%)	=	0.02%
Total:	51,488,638)					1.00					16.93%

Based on: 10-K (reporting date: 2021-07-31).

¹ US$ in thousands

² Equity. See details »

³ Convertible Senior Notes. See details »

⁴ Operating lease liability. See details »

Jul 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	22,713,258)	22,713,258)	÷	27,207,758)	=	0.83	0.83	×	18.58%	=	15.51%
Convertible Senior Notes³	4,100,000)	4,100,000)	÷	27,207,758)	=	0.15	0.15	×	5.30% × (1 – 21.00%)	=	0.63%
Operating lease liability⁴	394,500)	394,500)	÷	27,207,758)	=	0.01	0.01	×	3.90% × (1 – 21.00%)	=	0.04%
Total:	27,207,758)					1.00					16.19%

Based on: 10-K (reporting date: 2020-07-31).

¹ US$ in thousands

² Equity. See details »

³ Convertible Senior Notes. See details »

⁴ Operating lease liability. See details »

Palo Alto Networks Inc., economic spread ratio calculation, comparison to benchmarks

	Jul 31, 2025	Jul 31, 2024	Jul 31, 2023	Jul 31, 2022	Jul 31, 2021	Jul 31, 2020
Selected Financial Data (US$ in thousands)
Economic profit¹	(513,948)	548,912)	1,022,630)	282,770)	(401,022)	(441,463)
Invested capital²	12,434,500)	10,841,500)	9,129,500)	8,704,600)	7,360,500)	7,029,200)
Performance Ratio
Economic spread ratio³	-4.13%	5.06%	11.20%	3.25%	-5.45%	-6.28%
Benchmarks
Economic Spread Ratio, Competitors⁴
Accenture PLC	0.54%	0.17%	0.95%	3.83%	5.64%	6.25%
Adobe Inc.	13.02%	0.73%	0.90%	6.40%	8.78%	1.06%
AppLovin Corp.	28.19%	0.47%	-20.65%	-26.83%	-30.22%	—
Cadence Design Systems Inc.	-1.35%	-2.94%	7.11%	6.52%	6.73%	—
CrowdStrike Holdings Inc.	-13.40%	-8.47%	-4.73%	-8.02%	-10.28%	—
Datadog Inc.	-8.93%	-9.62%	-6.15%	-11.90%	-4.08%	—
International Business Machines Corp.	-0.78%	-7.62%	-3.57%	-11.32%	-6.18%	—
Intuit Inc.	-5.31%	-8.98%	-11.02%	-9.87%	-2.34%	1.11%
Microsoft Corp.	5.52%	7.41%	10.45%	18.44%	27.48%	—
Oracle Corp.	-8.13%	-7.98%	-8.78%	-7.75%	0.46%	—
Palantir Technologies Inc.	41.51%	-12.41%	-9.13%	-32.87%	-40.33%	—
Salesforce Inc.	-12.57%	-14.38%	-17.82%	-14.70%	-12.56%	—
ServiceNow Inc.	2.61%	5.88%	5.18%	0.67%	1.89%	—
Synopsys Inc.	-12.48%	-8.24%	-7.54%	-0.94%	-6.97%	-6.77%
Workday Inc.	-11.73%	-13.13%	-19.36%	-14.19%	-19.44%	—

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

¹ Economic profit. See details »

² Invested capital. See details »

³ 2025 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -513,948 ÷ 12,434,500 = -4.13%

⁴ Click competitor name to see calculations.

The financial performance between July 2020 and July 2025 exhibits a volatile cycle of value creation and destruction, characterized by an initial period of negative economic profit, a mid-term peak in efficiency, and a subsequent decline back into negative territory.

Invested Capital Growth: A consistent upward trajectory is observed in the capital base, which grew from US$ 7.03 billion in July 2020 to US$ 12.43 billion by July 2025. This indicates a continuous increase in the total resources deployed into the business over the analyzed period.
Economic Profit Trends: Economic profit transitioned from a negative position of US$ -441.5 million in 2020 to a peak of US$ 1.02 billion in 2023. Following this peak, a downward trend occurred, with profit declining to US$ 548.9 million in 2024 and reverting to a negative value of US$ -513.9 million in 2025.
Economic Spread Ratio Analysis: The economic spread ratio followed a similar bell-shaped curve, beginning at -6.28% in 2020 and reaching a maximum of 11.20% in 2023. The subsequent contraction to 5.06% in 2024 and finally to -4.13% in 2025 indicates that the returns on invested capital fell below the required cost of capital by the end of the period.

The data indicates a misalignment between capital expansion and value generation in the final year of the period. While the invested capital reached its highest point in 2025, the economic spread ratio and economic profit returned to negative territory, suggesting that the most recent investments have not yet generated sufficient returns to exceed the cost of capital.

AI Ask an analyst for more

Download chart

Palo Alto Networks Inc., economic profit margin calculation, comparison to benchmarks

	Jul 31, 2025	Jul 31, 2024	Jul 31, 2023	Jul 31, 2022	Jul 31, 2021	Jul 31, 2020
Selected Financial Data (US$ in thousands)
Economic profit¹	(513,948)	548,912)	1,022,630)	282,770)	(401,022)	(441,463)

Revenue	9,221,500)	8,027,500)	6,892,700)	5,501,500)	4,256,100)	3,408,400)
Add: Increase (decrease) in deferred revenue	1,271,400)	2,184,100)	2,302,400)	1,970,000)	1,213,800)	921,500)
Adjusted revenue	10,492,900)	10,211,600)	9,195,100)	7,471,500)	5,469,900)	4,329,900)
Performance Ratio
Economic profit margin²	-4.90%	5.38%	11.12%	3.78%	-7.33%	-10.20%
Benchmarks
Economic Profit Margin, Competitors³
Accenture PLC	0.35%	0.10%	0.49%	1.84%	2.89%	3.18%
Adobe Inc.	11.78%	0.83%	1.13%	7.45%	10.94%	1.52%
AppLovin Corp.	28.97%	0.46%	-28.27%	-50.24%	-60.51%	—
Cadence Design Systems Inc.	-2.02%	-4.51%	7.08%	6.50%	6.84%	—
CrowdStrike Holdings Inc.	-22.05%	-13.28%	-6.35%	-12.56%	-21.36%	—
Datadog Inc.	-5.30%	-8.73%	-3.84%	-8.23%	-3.24%	—
International Business Machines Corp.	-1.38%	-13.47%	-6.36%	-19.60%	-11.75%	—
Intuit Inc.	-6.87%	-13.81%	-18.05%	-18.99%	-2.97%	1.25%
Microsoft Corp.	8.23%	10.35%	11.90%	17.67%	22.81%	—
Oracle Corp.	-16.29%	-15.18%	-16.99%	-14.23%	0.91%	—
Palantir Technologies Inc.	21.50%	-10.76%	-4.90%	-55.15%	-66.43%	—
Salesforce Inc.	-27.15%	-33.24%	-45.06%	-40.81%	-28.80%	—
ServiceNow Inc.	2.88%	4.84%	4.17%	0.54%	1.63%	—
Synopsys Inc.	-72.84%	-13.81%	-10.64%	-1.33%	-11.09%	-11.63%
Workday Inc.	-12.46%	-14.62%	-23.74%	-19.23%	-25.36%	—

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

¹ Economic profit. See details »

² 2025 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenue
= 100 × -513,948 ÷ 10,492,900 = -4.90%

³ Click competitor name to see calculations.

The financial performance from July 2020 to July 2025 reflects a volatile cycle in economic value creation despite consistent growth in top-line revenue. The analyzed period is characterized by an initial recovery phase, a peak in economic profitability, and a subsequent downturn returning to a deficit.

Revenue Growth Trends: Adjusted revenue demonstrated a steady upward trajectory, increasing from 4,329,900 thousand US$ in 2020 to 10,492,900 thousand US$ by 2025. This consistent expansion indicates a significant scaling of operations, with revenue more than doubling over the six-year duration.
Economic Profit Trajectory: Economic profit transitioned from a deficit of 441,463 thousand US$ in 2020 to a substantial positive peak of 1,022,630 thousand US$ in 2023. This positive trend was not sustained, as figures declined to 548,912 thousand US$ in 2024 and eventually returned to a deficit of 513,948 thousand US$ by 2025, suggesting that capital charges once again exceeded operating returns.
Economic Profit Margin Analysis: The economic profit margin mirrored the volatility of absolute economic profit, improving from -10.20% in 2020 to a peak of 11.12% in 2023. A sharp contraction followed, with the margin dropping to 5.38% in 2024 and falling to -4.90% in 2025. The divergence between rising revenue and falling economic profit margins in the final two years indicates a decrease in the efficiency of value creation relative to the company's growth.

AI Ask an analyst for more

Download chart

Palo Alto Networks Inc. (NASDAQ:PANW)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin