Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
Quarterly Data
Palo Alto Networks Inc., common-size consolidated balance sheet: liabilities and stockholders’ equity (quarterly data)
Based on: 10-K (reporting date: 2026-07-31), 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).
The balance sheet exhibits a fundamental structural transformation, shifting from a position of extreme liability dependence to one primarily funded by stockholders' equity. Total liabilities reached a peak of 98.87% of the total capital structure in January 2022, after which a consistent downward trend was observed, culminating in a significant reduction to 40.20% by April 2026.
- Liability Profile and Debt Management
- A substantial reduction in current liabilities is evident, declining from a high of 71.21% in January 2022 to 20.48% by July 2026. This trend was heavily influenced by the lifecycle of short-term convertible senior notes, which spiked to 35.22% in October 2021 and were systematically reduced to near-zero levels by 2025. Long-term liabilities followed a similar trajectory of reduction, though they remained more stable than current liabilities between 2022 and 2025 before dropping sharply in 2026.
- Deferred Revenue Trends
- Deferred revenue, both current and long-term, represented a primary component of the liability structure for the majority of the period. Combined deferred revenue typically fluctuated between 45% and 60% of total liabilities and equity. However, a sharp contraction occurred in April 2026, with current deferred revenue falling to 15.37% and long-term deferred revenue to 14.03%, suggesting a shift in revenue recognition patterns or a change in the timing of customer payments.
- Equity Growth and Profitability
- Stockholders' equity underwent a dramatic expansion, rising from a low of 1.13% in January 2022 to 59.80% by April 2026. This growth is closely tied to the evolution of retained earnings, which transitioned from a persistent accumulated deficit—reaching -16.27% in July 2021—to positive territory starting in January 2024. The peak in retained earnings at 13.01% in January 2026 indicates a period of sustained profitability and capital accumulation.
- Capital Contribution
- Common stock and additional paid-in capital remained relatively stable as a percentage of the total structure between 15% and 25% for several years. A notable increase occurred in the final quarters of the analysis, with this component rising to 53.19% by April 2026, further contributing to the overall deleveraging of the balance sheet.
Overall, the financial trajectory indicates a transition from a high-leverage phase characterized by convertible debt and accumulated deficits to a more stable, equity-funded capital structure supported by positive retained earnings.
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