Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

Palo Alto Networks Inc., consolidated cash flow statement

US$ in thousands

12 months ended:	Jul 31, 2025	Jul 31, 2024	Jul 31, 2023	Jul 31, 2022	Jul 31, 2021	Jul 31, 2020
Net income (loss)	1,133,900)	2,577,600)	439,700)	(267,000)	(498,900)	(267,000)
Share-based compensation for equity-based awards	1,295,100)	1,075,400)	1,074,500)	1,011,100)	894,500)	658,400)
Deferred income taxes	(349,900)	(2,033,700)	12,500)	(3,100)	—)	—)
Depreciation and amortization	343,400)	283,300)	282,200)	282,600)	260,400)	206,100)
Gain related to facility exit	—)	—)	—)	—)	—)	(3,100)
Amortization of deferred contract costs	480,600)	446,000)	413,400)	362,100)	298,000)	254,400)
Amortization of debt issuance costs	1,100)	3,500)	6,700)	7,200)	142,900)	73,900)
Change in fair value of contingent consideration liability	(135,300)	—)	—)	—)	—)	—)
Reduction of operating lease right-of-use assets	65,400)	55,300)	49,900)	54,400)	44,500)	47,400)
Amortization of investment premiums, net of accretion of purchase discounts	(41,100)	(60,100)	(52,200)	13,500)	13,100)	(6,200)
Repayments of convertible senior notes attributable to debt discount	—)	—)	—)	—)	(100)	—)
Accounts receivable, net	(345,300)	(154,300)	(320,300)	(902,000)	(172,400)	(435,600)
Financing receivables, net	191,100)	(865,900)	(738,700)	(30,100)	(272,600)	—)
Deferred contract costs	(555,000)	(489,300)	(431,900)	(458,800)	(440,800)	(407,400)
Prepaid expenses and other assets	88,300)	(134,100)	(270,600)	(110,000)	(26,500)	(1,600)
Accounts payable	106,800)	(15,000)	1,000)	69,300)	(11,800)	(12,800)
Accrued compensation	51,300)	3,800)	84,400)	30,400)	105,100)	75,700)
Accrued and other liabilities	147,500)	384,500)	(74,800)	(44,900)	(28,500)	(39,800)
Deferred revenue	1,238,100)	2,180,600)	2,301,700)	1,970,000)	1,196,100)	893,300)
Changes in operating assets and liabilities, net of effects of acquisitions	922,800)	910,300)	550,800)	523,900)	348,600)	71,800)
Adjustments to reconcile net income (loss) to net cash provided by operating activities	2,582,100)	680,000)	2,337,800)	2,251,700)	2,001,900)	1,302,700)
Net cash provided by operating activities	3,716,000)	3,257,600)	2,777,500)	1,984,700)	1,503,000)	1,035,700)
Purchases of investments	(3,695,900)	(3,551,300)	(5,460,400)	(2,271,700)	(1,958,900)	(1,180,800)
Proceeds from sales of investments	1,196,900)	956,200)	965,900)	449,200)	131,100)	314,000)
Proceeds from maturities of investments	1,594,900)	1,852,600)	2,811,500)	1,118,900)	1,240,500)	1,952,700)
Business acquisitions, net of cash and restricted cash acquired	(1,054,400)	(610,600)	(204,500)	(37,000)	(777,300)	(583,500)
Purchases of property, equipment, and other assets	(246,200)	(156,800)	(146,300)	(192,800)	(116,000)	(214,400)
Net cash (used in) provided by investing activities	(2,204,700)	(1,509,900)	(2,033,800)	(933,400)	(1,480,600)	288,000)
Repayments of convertible senior notes	(965,600)	(1,033,700)	(1,692,000)	(600)	(900)	—)
Payments for debt issuance costs	—)	—)	—)	—)	(200)	—)
Proceeds from borrowings on convertible senior notes, net	—)	—)	—)	—)	—)	1,979,100)
Proceeds from issuance of warrants	—)	—)	—)	—)	—)	202,800)
Purchase of note hedges	—)	—)	—)	—)	—)	(370,800)
Repurchases of common stock	—)	(566,700)	(272,700)	(892,300)	(1,178,100)	(1,198,100)
Proceeds from sales of shares through employee equity incentive plans	370,500)	283,900)	258,800)	136,600)	104,000)	84,000)
Payments for taxes related to net share settlement of equity awards	(183,800)	(26,600)	(20,400)	(50,300)	(28,800)	(22,700)
Payment of deferred consideration related to prior year business acquisition	—)	—)	—)	—)	—)	(1,300)
Net cash provided by (used in) financing activities	(778,900)	(1,343,100)	(1,726,300)	(806,600)	(1,104,000)	673,000)
Net increase (decrease) in cash, cash equivalents, and restricted cash	732,400)	404,600)	(982,600)	244,700)	(1,081,600)	1,996,700)
Cash, cash equivalents, and restricted cash, beginning of period	1,546,800)	1,142,200)	2,124,800)	1,880,100)	2,961,700)	965,000)
Cash, cash equivalents, and restricted cash, end of period	2,279,200)	1,546,800)	1,142,200)	2,124,800)	1,880,100)	2,961,700)

Based on: 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), 10-K (reporting date: 2020-07-31).

Net Income (Loss): Over the periods analyzed, net income exhibited significant volatility. The company recorded substantial losses in 2020 and 2021, with a loss peaking at approximately $498.9 million. A notable turnaround occurred in 2023, with positive net income of about $439.7 million, followed by a sharp increase in 2024 to approximately $2.58 billion. However, this was followed by a decline in 2025 to $1.13 billion, still remaining positive but reflecting reduced profitability compared to the prior year.
Share-Based Compensation: Share-based compensation expenses consistently increased year over year, rising from $658.4 million in 2020 to $1.30 billion in 2025. This upward trend suggests growing equity incentives or a higher valuation of those awards, contributing to non-cash expenses.
Deferred Income Taxes: Deferred income taxes showed unusual fluctuations with missing data initially, followed by negative values starting in 2022 (-$3.1 million) and a significant charge in 2024 (-$2.03 billion), suggesting large tax adjustments or potential write-downs.
Depreciation and Amortization: Depreciation and amortization expenses steadily increased from $206.1 million in 2020 to $343.4 million in 2025. This reflects growing capital investments or acquisitions leading to increased asset bases.
Amortization of Deferred Contract Costs: This item demonstrated a consistent increase, growing from $254.4 million in 2020 to $480.6 million in 2025. The rise points to an expanding contract portfolio or increasing capitalized costs that are being amortized.
Changes in Working Capital Components: Accounts receivable showed mixed patterns, with notable decreases in some years (e.g., a $902 million reduction in 2022) but also increases later (e.g., negative $345.3 million in 2025), indicating variability in collections or sales cycles. Financing receivables similarly fluctuated substantially, with a significant increase in 2025 to $191.1 million from negative values previously. Deferred contract costs and prepaid expenses generally decreased, consistent with amortization and expense recognition. Deferred revenue dramatically increased through 2023, peaking at $2.3 billion, then declined in subsequent years, indicating variation in upfront customer payments or changes in revenue recognition patterns.
Operating Cash Flow: Net cash provided by operating activities displayed a strong upward trend from $1.04 billion in 2020 to $3.72 billion in 2025, reflecting improved operational efficiency and possibly enhanced collections or reduced working capital needs.
Investing Activities: Cash used in investing activities fluctuated considerably, peaking at negative $2.03 billion in 2023. Large investments in securities and acquisitions were evident, with purchases of investments rising sharply in 2023 ($5.46 billion). Proceeds from sales and maturities of investments showed variability but were substantial, partly offsetting the purchases. Acquisitions showed a downward trend in 2022 but increased again in later years, with the highest outflow of approximately $1.05 billion in 2025. Property and equipment purchases remained relatively stable with modest growth in 2025.
Financing Activities: Net cash used in financing activities was negative in most years except 2020, ranging from -$778.9 million to -$1.73 billion. Repayments of convertible senior notes escalated significantly from 2023 onward, reaching approximately $1.69 billion in 2023. Share repurchases declined over time, from $1.2 billion in 2020 down to $566.7 million in 2024. Proceeds from employee equity incentive plans increased steadily, indicating ongoing employee stock compensation.
Cash Position: Cash, cash equivalents, and restricted cash exhibited volatility but an overall increase, closing at $2.28 billion in 2025 after a low point of $1.14 billion in 2023. Net changes in cash reflected fluctuations between large increases and decreases, primarily driven by investing and financing activities.
Summary: The financial data reveals a period of operational improvement with a return to profitability and strong operating cash generation after initial losses. Substantial investments and acquisitions were funded by financing activities, including repayments and equity-related transactions. Key risks include fluctuations in deferred tax liabilities and variability in working capital elements, which may impact cash flow stability. The increase in share-based compensation and depreciation expenses underscores growth investments and incentive structures. Overall, the company’s financial trajectory shows maturation and increased cash efficiency while facing challenges in managing investment outflows and financing costs.

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Palo Alto Networks Inc. (NASDAQ:PANW)

Cash Flow Statement