Income Statement
Quarterly Data
The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.
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Palo Alto Networks Inc., consolidated income statement (quarterly data)
US$ in millions
Based on: 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), 10-K (reporting date: 2020-07-31), 10-Q (reporting date: 2020-04-30), 10-Q (reporting date: 2020-01-31), 10-Q (reporting date: 2019-10-31).
The financial performance presented demonstrates a significant evolution over the observed period. Initially, revenue exhibited growth between October 2019 and July 2020, peaking at US$950 million. However, a slight decline was noted in October 2020, followed by a period of more consistent growth through July 2021. Revenue then experienced a temporary dip in October 2021 before resuming a strong upward trajectory, culminating in US$2.536 billion in July 2025. Subscription and support revenue consistently represents the majority of total revenue and shows a steady, robust increase throughout the period.
Cost of revenue increased consistently alongside revenue, though at a slower rate, resulting in improving gross profit margins over time. Operating expenses also increased, but at a rate that initially outpaced revenue growth, leading to operating losses in several quarters between October 2019 and July 2021. However, as revenue accelerated, operating expenses were eventually managed to a point where significant operating income was achieved, particularly from July 2022 onwards.
- Revenue Composition
- Product revenue remained relatively stable in the earlier periods, experiencing fluctuations but not demonstrating substantial growth. In contrast, subscription and support revenue consistently increased, becoming the dominant revenue stream. This shift suggests a successful transition towards a recurring revenue model.
- Profitability Trends
- Gross profit initially showed modest growth, but accelerated significantly from April 2022, indicating improved cost management or pricing strategies. Operating income transitioned from losses to substantial gains, driven by revenue growth and, eventually, expense control. The substantial increase in income before income taxes in January 2025, largely due to a significant positive adjustment related to income taxes, is a notable outlier and warrants further investigation.
- Expense Management
- Sales and marketing expenses consistently represented the largest portion of operating expenses. While these expenses increased over time, their growth rate was eventually moderated, contributing to the improvement in operating income. General and administrative expenses also increased, but to a lesser extent. A significant spike in general and administrative expenses is observed in January 2025, coinciding with the large income tax benefit, potentially indicating related costs.
Net income mirrored the trends in operating income, transitioning from losses to substantial profits. The period from October 2023 to July 2025 demonstrates particularly strong net income growth, driven by revenue expansion and improved operational efficiency. The substantial net income reported in January 2025 is heavily influenced by the aforementioned income tax benefit and represents a significant deviation from prior trends.