Stock Analysis on Net
Stock Analysis on Net

Palo Alto Networks Inc. (NASDAQ:PANW)

Common-Size Balance Sheet: Liabilities and Stockholders’ Equity 

Palo Alto Networks Inc., common-size consolidated balance sheet: liabilities and stockholders’ equity

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Jul 31, 2026 Jul 31, 2025 Jul 31, 2024 Jul 31, 2023 Jul 31, 2022 Jul 31, 2021
Accounts payable 0.60 0.98 0.58 0.91 1.04 0.56
Accrued compensation 2.16 2.58 2.77 3.78 3.76 4.20
Accrued and other liabilities 1.73 3.59 2.53 2.69 3.26 3.22
Deferred revenue 15.99 26.73 27.72 32.24 29.72 26.77
Short-term convertible senior notes 0.00 0.00 4.82 13.73 30.01 15.21
Current liabilities 20.48% 33.88% 38.43% 53.36% 67.79% 49.96%
Long-term convertible senior notes 3.66 0.00 0.00 0.00 0.00 16.29
Long-term deferred revenue 14.46 27.36 29.71 31.87 27.36 22.28
Deferred tax liabilities 0.52 0.38 1.94 0.19 0.00 0.00
Long-term operating lease liabilities 1.50 1.43 1.90 1.93 2.25 3.06
Other long-term liabilities 2.65 3.76 2.16 0.59 0.88 0.95
Long-term liabilities 22.79% 32.93% 35.71% 34.58% 30.50% 42.58%
Total liabilities 43.27% 66.81% 74.14% 87.94% 98.29% 92.54%
Temporary equity 0.00 0.00 0.00 0.00 0.00 1.26
Preferred stock; $0.0001 par value; none issued and outstanding 0.00 0.00 0.00 0.00 0.00 0.00
Common stock and additional paid-in capital; $0.0001 par value 51.12 22.45 19.11 20.82 15.77 22.57
Accumulated other comprehensive income (loss) -0.15 0.21 -0.01 -0.30 -0.45 -0.10
Retained earnings (accumulated deficit) 5.76 10.54 6.75 -8.46 -13.60 -16.27
Stockholders’ equity 56.73% 33.19% 25.86% 12.06% 1.71% 6.20%
Total liabilities, temporary equity and stockholders’ equity 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Based on: 10-K (reporting date: 2026-07-31), 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).

The capital structure exhibits a fundamental shift from a high-leverage position toward a more equity-funded balance sheet over the analyzed period. Total liabilities, which peaked at 98.29% of total liabilities, temporary equity, and stockholders' equity in 2022, declined progressively to 43.27% by 2026. Conversely, stockholders' equity grew from a low of 1.71% in 2022 to 56.73% by 2026, indicating a significant improvement in solvency and a reduction in financial risk.

Debt Management and Convertible Notes
A volatile pattern is observed in the utilization of convertible senior notes. Short-term notes reached a peak of 30.01% in 2022 before declining sharply to 4.82% in 2024 and being eliminated in subsequent periods. Long-term notes, which represented 16.29% in 2021, were largely absent for several years before reappearing at 3.66% in 2026. This suggests a strategic cycle of debt issuance, repayment, or conversion into equity.
Deferred Revenue Trends
Deferred revenue remains a substantial component of the liability profile, though its relative weight is decreasing. Total deferred revenue, combining current and long-term portions, shifted from approximately 49% of the total balance sheet in 2021 to roughly 30% by 2026. The consistent decline in both short-term and long-term deferred revenue as a percentage of the total structure suggests a change in the timing of revenue recognition or a shift in the relative size of the company's total assets and equity.
Equity Growth and Profitability
The equity section shows a marked recovery and expansion. Retained earnings transitioned from a significant accumulated deficit of -16.27% in 2021 to positive territory starting in 2024, reaching 10.54% in 2025. This trend reflects a shift toward sustained profitability. Additionally, common stock and additional paid-in capital increased significantly to 51.12% by 2026, contributing to the overall strengthening of the equity base.
Short-term Liability Compression
Current liabilities experienced a substantial contraction, falling from a high of 67.79% in 2022 to 20.48% in 2026. This reduction was driven primarily by the decrease in short-term convertible notes and the shrinking proportion of deferred revenue, leading to a more conservative short-term financial obligation profile.

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