Palo Alto Networks Inc., FCFF calculation

US$ in thousands

12 months ended:	Jul 31, 2023	Jul 31, 2022	Jul 31, 2021	Jul 31, 2020	Jul 31, 2019	Jul 31, 2018
Net income (loss)	439,700)	(267,000)	(498,900)	(267,000)	(81,900)	(147,900)
Net noncash charges	1,774,500)	1,730,900)	1,653,300)	1,230,900)	910,000)	663,500)
Changes in operating assets and liabilities, net of effects of acquisitions	563,300)	520,800)	348,600)	71,800)	227,500)	521,400)
Net cash provided by operating activities	2,777,500)	1,984,700)	1,503,000)	1,035,700)	1,055,600)	1,037,000)
Cash paid for contractual interest, net of tax¹	15,675)	15,958)	15,800)	10,665)	10,665)	586)
Purchases of property, equipment, and other assets	(146,300)	(192,800)	(116,000)	(214,400)	(131,200)	(112,000)
Free cash flow to the firm (FCFF)	2,646,875)	1,807,858)	1,402,800)	831,965)	935,065)	925,586)

Based on: 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), 10-K (reporting date: 2019-07-31), 10-K (reporting date: 2018-07-31).

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Item	Description	The company
FCFF	Free cash flow to the firm is the cash flow available to the Palo Alto Networks Inc. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.	Palo Alto Networks Inc. FCFF increased from 2021 to 2022 and from 2022 to 2023.

Palo Alto Networks Inc., interest paid, net of tax calculation

US$ in thousands

12 months ended:	Jul 31, 2023	Jul 31, 2022	Jul 31, 2021	Jul 31, 2020	Jul 31, 2019	Jul 31, 2018
Effective Income Tax Rate (EITR)
EITR¹	22.40%	21.00%	21.00%	21.00%	21.00%	26.80%
Interest Paid, Net of Tax
Cash paid for contractual interest, before tax	20,200)	20,200)	20,000)	13,500)	13,500)	800)
Less: Cash paid for contractual interest, tax²	4,525)	4,242)	4,200)	2,835)	2,835)	214)
Cash paid for contractual interest, net of tax	15,675)	15,958)	15,800)	10,665)	10,665)	586)

Based on: 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), 10-K (reporting date: 2019-07-31), 10-K (reporting date: 2018-07-31).

¹ See details »

² 2023 Calculation
Cash paid for contractual interest, tax = Cash paid for contractual interest × EITR
= 20,200 × 22.40% = 4,525

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Palo Alto Networks Inc., current EV/FCFF calculation, comparison to benchmarks

Selected Financial Data (US$ in thousands)
Enterprise value (EV)	95,019,394)
Free cash flow to the firm (FCFF)	2,646,875)
Valuation Ratio
EV/FCFF	35.90
Benchmarks
EV/FCFF, Competitors¹
Accenture PLC	20.02
Adobe Inc.	29.79
International Business Machines Corp.	14.01
Intuit Inc.	34.85
Microsoft Corp.	50.41
Oracle Corp.	34.50
Salesforce Inc.	26.79
ServiceNow Inc.	51.15
Synopsys Inc.	51.68
EV/FCFF, Sector
Software & Services	39.59
EV/FCFF, Industry
Information Technology	42.04

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

¹ Click competitor name to see calculations.

If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.

Palo Alto Networks Inc., historical EV/FCFF calculation, comparison to benchmarks

	Jul 31, 2023	Jul 31, 2022	Jul 31, 2021	Jul 31, 2020	Jul 31, 2019	Jul 31, 2018
Selected Financial Data (US$ in thousands)
Enterprise value (EV)¹	74,503,582)	52,958,262)	45,931,416)	22,046,667)	19,108,380)	20,668,307)
Free cash flow to the firm (FCFF)²	2,646,875)	1,807,858)	1,402,800)	831,965)	935,065)	925,586)
Valuation Ratio
EV/FCFF³	28.15	29.29	32.74	26.50	20.44	22.33
Benchmarks
EV/FCFF, Competitors⁴
Accenture PLC	20.26	16.99	24.76	17.90	18.49	17.18
Adobe Inc.	37.75	20.82	33.61	40.43	40.48	31.36
International Business Machines Corp.	15.27	16.47	13.10	9.35	12.86	—
Intuit Inc.	31.28	32.85	48.64	37.90	33.30	27.69
Microsoft Corp.	41.75	32.31	38.37	33.99	26.37	23.99
Oracle Corp.	35.83	31.60	16.36	14.99	14.03	11.11
Salesforce Inc.	28.41	35.97	44.91	39.63	41.21	—
ServiceNow Inc.	56.49	40.86	60.13	83.74	67.96	—
Synopsys Inc.	55.87	30.82	38.59	42.88	33.32	37.07
EV/FCFF, Sector
Software & Services	35.26	29.16	31.90	27.10	23.26	—
EV/FCFF, Industry
Information Technology	34.25	27.01	27.93	24.12	19.69	—

Based on: 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), 10-K (reporting date: 2019-07-31), 10-K (reporting date: 2018-07-31).

¹ See details »

² See details »

³ 2023 Calculation
EV/FCFF = EV ÷ FCFF
= 74,503,582 ÷ 2,646,875 = 28.15

⁴ Click competitor name to see calculations.

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Valuation ratio	Description	The company
EV/FCFF	Enterprise value to free cash flow to the firm is whole company valuation indicator.	Palo Alto Networks Inc. EV/FCFF ratio decreased from 2021 to 2022 and from 2022 to 2023.

Palo Alto Networks Inc. (NASDAQ:PANW)

Enterprise Value to FCFF (EV/FCFF)

Free Cash Flow to The Firm (FCFF)

Interest Paid, Net of Tax

Enterprise Value to FCFF Ratio, Current

Enterprise Value to FCFF Ratio, Historical