Palo Alto Networks Inc. (NASDAQ:PANW)

The financial data reveals several noteworthy trends in intangible assets over the analyzed periods.

Goodwill

Goodwill shows a consistent upward trend from 1,352,300 thousand USD in 2019 to 3,350,100 thousand USD in 2024. This significant increase indicates continuous acquisition activity or asset revaluation contributing to the company's intangible asset base.

Developed Technology

Developed technology assets also demonstrate steady growth, rising from 318,800 thousand USD in 2019 to 813,900 thousand USD in 2024, suggesting ongoing investments or acquisitions in technology development.

Customer Relationships

Customer relationships saw rapid growth until 2021, from 39,800 thousand USD in 2019 to 172,700 thousand USD in 2021, after which the value remained stable through 2024. This pattern may indicate that significant acquisitions or customer base developments occurred early, followed by a period of stability.

Acquired Intellectual Property

This category shows a modest but steady increase from 8,900 thousand USD in 2019 to 18,200 thousand USD in 2024, reflecting incremental additions to the company's intellectual property portfolio.

Trade Name and Trademarks

Trade names and trademarks remain constant at 9,400 thousand USD across all years, indicating no new additions or disposals in this category.

Other Intangible Assets

Other intangible assets fluctuate slightly but remain low compared to other categories, generally around 900 to 3,100 thousand USD, with no sustained growth trend.

Intangible Assets Subject to Amortization

The gross carrying amount of these assets rose markedly from 379,100 thousand USD in 2019 to 1,015,100 thousand USD in 2024, which aligns with the growth observed in developed technology and other purchased intangibles.

Accumulated Amortization

Accumulated amortization increased significantly in absolute terms from -100,100 thousand USD in 2019 to -640,200 thousand USD in 2024, reflecting the amortization expense recognized each period against the intangible assets subject to amortization.

Net Intangible Assets Subject to Amortization

The net carrying amount initially increased from 279,000 thousand USD in 2019 to a peak of 498,600 thousand USD in 2021, followed by declines to 311,500 thousand USD by 2023, and a partial recovery to 374,900 thousand USD in 2024. This pattern suggests significant amortization charges after 2021 possibly exceeding new acquisitions or capitalizations in certain years.

In-Process Research and Development

Reported values are intermittent, recorded at 1,600 thousand USD in 2019 and 3,900 thousand USD in 2022-2023, with missing data in other years. This could imply sporadic capitalization of in-process R&D projects.

Purchased Intangible Assets

The purchased intangible assets mirrored net intangible assets subject to amortization, rising sharply from 280,600 thousand USD in 2019 to 498,600 thousand USD in 2021, but then decreasing to 374,900 thousand USD in 2024. This pattern indicates variability in asset acquisitions and amortization impacts over time.

Goodwill and Intangible Assets Total

The total of goodwill and intangible assets increased substantially from 1,632,900 thousand USD in 2019 to 3,725,000 thousand USD in 2024. This overall growth highlights the company's focus on expanding intangible resources, largely driven by goodwill enhancements and developed technology.

The analysis of financial data over the period from July 31, 2019, to July 31, 2024, reveals several notable trends in assets and stockholders’ equity, both in reported and goodwill-adjusted terms.

Total Assets

Reported total assets exhibit a consistent upward trajectory, increasing from approximately $6.6 billion in 2019 to nearly $20 billion by mid-2024. This steady growth indicates significant asset accumulation over the five-year period.

Adjusted total assets, which exclude goodwill, also demonstrate an increasing trend, rising from about $5.2 billion in 2019 to over $16.6 billion in 2024. Although the adjusted figures are lower than the reported amounts, they similarly reflect sustained asset growth, suggesting expansion in tangible and intangible assets other than goodwill.

Stockholders’ Equity

Reported stockholders’ equity shows considerable volatility throughout the period. It starts at approximately $1.59 billion in 2019, declines sharply over the next few years to a low point of $210 million in 2022, then rebounds strongly to over $5.16 billion in 2024. This pattern may indicate periods of losses, equity financing activities, or asset revaluations impacting equity.

In contrast, adjusted stockholders’ equity, which factors out goodwill, remains negative or near zero for most of the period, starting just above zero in 2019, dropping further into negative territory through 2022, with a low around -$2.5 billion, before improving substantially to approximately $1.82 billion in 2024. The negative adjusted equity in earlier years suggests that goodwill or other intangible assets significantly inflate reported equity, and without these adjustments, the company exhibited a deficit position in terms of tangible net assets for a sustained period.

Overall, the increasing total assets both reported and adjusted indicate growth, but the significant discrepancies and fluctuations in equity, especially the prolonged negative adjusted equity until 2024, highlight underlying concerns regarding asset composition and the impact of goodwill. The substantial improvement in adjusted equity in 2024 suggests a possible restructuring, asset write-down reversal, or improved profitability leading to stronger tangible net worth.

The analysis of the financial data reveals several notable trends and patterns over the evaluated periods.

Total Asset Turnover

The reported total asset turnover ratio exhibits moderate fluctuations, beginning at 0.44 in 2019 and declining to a low of 0.38 in 2020. It subsequently recovers gradually, peaking at 0.48 in 2023 before declining again to 0.40 in 2024. The adjusted total asset turnover follows a similar trend but at higher ratios, starting at 0.55 in 2019, dipping to 0.47 in 2020, then increasing steadily to 0.60 by 2023, and decreasing to 0.48 in 2024. This suggests an overall improvement in asset utilization after adjustment for goodwill, with some variability in recent years.

Financial Leverage

Reported financial leverage shows significant volatility, with an increase from 4.16 in 2019 to an exceptionally high 58.35 in 2022, before sharply declining to 3.87 in 2024. This indicates a period of substantial increase in leverage followed by rapid deleveraging. The adjusted financial leverage data is sparse but indicates an extremely high leverage of 22.39 in 2019, followed by a marked reduction to 9.15 in 2024. The adjustment highlights a generally higher leverage base, with a substantial reduction towards the end of the period analyzed.

Return on Equity (ROE)

The reported ROE presents a severe decline from -5.16% in 2019 to a deeply negative -127.14% in 2022, indicating significant losses and negative shareholder returns during that period. However, this trend reverses dramatically in 2023 and 2024, with positive returns of 25.15% and 49.86%, respectively, suggesting a strong recovery in profitability. Adjusted ROE data is limited but displays an extreme negative value of -35% initially and an exceptionally high positive return of 141.66% in 2024, underscoring the strong improvement in equity returns after adjusting for goodwill.

Return on Assets (ROA)

Reported ROA trends downward from -1.24% in 2019 to -4.87% in 2021, reflecting deteriorating asset profitability, before improving to a low negative -2.18% in 2022 and turning positive at 3.03% and 12.89% in 2023 and 2024, respectively. The adjusted ROA follows a parallel pattern but with deeper negative values initially, starting at -1.56% in 2019 and reaching -6.62% in 2021, before recovering to 3.80% and 15.49% in the last two years. This pattern indicates an initial period of asset inefficiency followed by a notable return to effective asset utilization and profitability over the latter years.

Overall, the data depict a company experiencing significant financial strain and leverage expansion between 2019 and 2022, with corresponding sharp declines in profitability metrics. From 2023 onwards, there is a pronounced recovery in profitability, asset efficiency, and a reduction in financial leverage. The adjustments for goodwill typically show amplified effects, emphasizing the impact of intangible assets on leverage and profitability measures. The trends suggest a turnaround in financial health and operational performance in the most recent years analyzed.

Trends in Total Assets

There is a consistent increase in reported total assets over the observed periods, rising from 6,592,200 thousand US dollars in 2019 to 19,990,900 thousand in 2024. Adjusted total assets, which exclude goodwill, also show a steady upward trend, increasing from 5,239,900 thousand US dollars in 2019 to 16,640,800 thousand in 2024. The gap between reported and adjusted total assets widens over time, reflecting the growing influence of goodwill on the total asset base.

Reported Total Asset Turnover

The reported total asset turnover ratio exhibits some variability. It starts at 0.44 in 2019, declines to 0.38 in 2020, then recovers and peaks at 0.48 in 2023, before decreasing to 0.40 in 2024. This volatility suggests fluctuating efficiency in using assets to generate revenue when measured on a reported basis.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio demonstrates a generally positive trend from 2019 to 2023, improving from 0.55 to 0.60, which indicates increasing efficiency when goodwill is excluded from assets. However, a decline to 0.48 in 2024 marks a reversal, pointing to reduced operational efficiency or asset utilization in the most recent period.

Comparative Insights

The adjusted total asset turnover ratios are consistently higher than the reported ratios throughout the periods, underlining the impact of goodwill on asset bases and turnover calculations. The improvement in adjusted turnover ratios until 2023 suggests better management of core assets, whereas the 2024 decline in both reported and adjusted ratios indicates a possible area of concern regarding asset productivity going forward.

The analysis of the financial data over the period reveals several notable trends and shifts in the key financial metrics.

Total Assets

Reported total assets demonstrate a consistent upward trajectory from US$6,592,200 thousand in 2019 to US$19,990,900 thousand in 2024, indicating significant growth in the overall asset base. Adjusted total assets, which exclude goodwill, also show steady growth, rising from US$5,239,900 thousand in 2019 to US$16,640,800 thousand in 2024. This consistent increase suggests expanding operational activities and investments in assets beyond intangible goodwill.

Stockholders’ Equity

The reported stockholders' equity fluctuates considerably, initially declining from US$1,586,300 thousand in 2019 to a low of US$210,000 thousand in 2022, and then recovering sharply to US$5,169,700 thousand by 2024. The adjusted stockholders’ equity, however, shows a contrasting trend with negative values persisting from 2020 through 2023, reaching a low of negative US$2,537,700 thousand in 2022, before improving to a positive US$1,819,600 thousand in 2024. These patterns indicate significant impairment or write-downs reflected by the adjusted figures, which exclude goodwill, thereby highlighting potential concerns regarding asset quality or valuation in the earlier periods. The recovery in 2024 signals a strengthening equity position after a period of distress.

Financial Leverage

Reported financial leverage ratios illustrate extreme volatility, rising sharply from 4.16 in 2019 to an extraordinary peak of 58.35 in 2022, before declining to 3.87 in 2024. This spike in 2022 suggests a period where liabilities greatly outweighed equity, consistent with the low reported equity in that year. Adjusted financial leverage is only partially available but points to extremely high leverage in 2019 (22.39) and then a decline to 9.15 in 2024, reflecting a reduction in reliance on debt or other liabilities relative to equity after excluding goodwill.

Overall, the financial data depicts a company undergoing significant changes with considerable growth in its asset base but facing challenges in maintaining equity, particularly when adjustments for goodwill are made. The volatility in leverage ratios underscores shifting capital structure dynamics, with a notable peak indicating potential financial stress, followed by an improvement towards the end of the period analyzed.

Over the analyzed period, the reported stockholders’ equity exhibited significant fluctuation. Initially, there was a decline from 1,586,300 thousand US dollars in 2019 to 210,000 thousand US dollars by 2022. However, this trend reversed sharply in the last two years, culminating in a substantial increase to 5,169,700 thousand US dollars by 2024. This pattern indicates initial contraction in equity followed by a pronounced recovery and expansion.

In contrast, the adjusted stockholders’ equity demonstrated a more volatile and generally negative trend through 2019 to 2023. Starting at 234,000 thousand US dollars in 2019, it dropped into negative territory and continued declining to -2,537,700 thousand US dollars by 2022. Although the negative trend persisted in 2023 with a value of -1,178,400 thousand US dollars, a notable recovery occurred in 2024 with the adjusted equity turning positive again at 1,819,600 thousand US dollars.

The reported return on equity (ROE) values align with the equity trends, showing negative performance from 2019 through 2022. The ROE declined from -5.16% in 2019 to a deeply negative -127.14% in 2022, reflecting substantial losses relative to shareholders’ equity during this interval. The situation improved markedly in the final two years, with reported ROE turning positive and reaching 49.86% in 2024, suggesting a strong profitability turnaround.

The adjusted ROE data is incomplete but indicates a markedly negative return of -35% in 2019, with no values reported for the intermediate years. In 2024, an exceptionally high adjusted ROE of 141.66% is noted, reinforcing the trend of significant profitability improvement when adjusted for goodwill impacts.

Overall, the patterns reveal an initial period of financial challenges characterized by declining equity and negative returns, followed by a pronounced recovery phase from 2022 onwards. The adjusted figures, while initially reflecting deeper financial distress, also show recovery by the latest period. The strong rebound in both reported and adjusted ROE along with rising equity suggests effective strategic or operational adjustments leading to enhanced financial health.

The financial data reveals significant changes in both reported and adjusted total assets over the six-year period, accompanied by notable variations in the return on assets (ROA) metrics.

Total Assets

Reported total assets show a consistent upward trend, increasing from approximately $6.6 billion in 2019 to nearly $20 billion in 2024. This represents more than a threefold increase over the period, indicating substantial asset growth.

Adjusted total assets, which exclude goodwill and potentially other intangible assets, also demonstrate strong growth, rising from roughly $5.2 billion in 2019 to about $16.6 billion in 2024. Although the adjusted figures are consistently lower than the reported totals, the gap between reported and adjusted assets widens over time, suggesting a growing proportion of intangible assets such as goodwill within the asset base.

Return on Assets (ROA)

Reported ROA started in negative territory at -1.24% in 2019 and deteriorated further to -4.87% in 2021, indicating operational challenges or investments that were not immediately profitable. From 2022 onward, there is a clear improvement, with ROA turning positive at 3.03% in 2023 and rising significantly to 12.89% in 2024, reflecting improved profitability relative to the asset base.

Adjusted ROA follows a similar trend but is generally lower in magnitude during the negative years, and higher when positive. Beginning at -1.56% in 2019, it worsens to -6.62% in 2021 but improves to 3.8% in 2023 and climbs sharply to 15.49% in 2024. This trend suggests that when excluding goodwill and associated assets, the company’s core operational performance improves significantly in the latter years.

Overall, the data indicates strong growth in asset size alongside improving operational efficiency and profitability, particularly from 2022 onward. The widening difference between reported and adjusted assets suggests increasing investments in intangible assets, while the marked improvement in adjusted ROA in recent years highlights strengthening core business returns after accounting for such intangibles.