Name: Palo Alto Networks Inc. (NASDAQ:PANW) | Cash Flow Statement
Creator: Stock Analysis on Net

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.

Download chart

Palo Alto Networks Inc., consolidated cash flow statement

US$ in millions

12 months ended:	Jul 31, 2026	Jul 31, 2025	Jul 31, 2024	Jul 31, 2023	Jul 31, 2022	Jul 31, 2021
Net income (loss)	307)	1,134)	2,578)	440)	(267)	(499)
Share-based compensation for equity-based awards	1,774)	1,295)	1,075)	1,075)	1,011)	895)
Deferred income taxes	(19)	(350)	(2,034)	13)	(3)	—)
Depreciation and amortization	855)	343)	283)	282)	283)	260)
Amortization of deferred contract costs	590)	481)	446)	413)	362)	298)
Amortization of debt issuance costs	—)	1)	4)	7)	7)	143)
Change in fair value of convertible senior notes and capped calls	562)	—)	—)	—)	—)	—)
Change in fair value of contingent consideration liability	(117)	(135)	—)	—)	—)	—)
Reduction of operating lease right-of-use assets	75)	65)	55)	50)	54)	45)
Amortization of investment premiums, net of accretion of purchase discounts	(54)	(41)	(60)	(52)	14)	13)
Unrealized foreign currency exchange losses, net	1)	—)	—)	—)	—)	—)
Repayments of convertible senior notes attributable to debt discount	—)	—)	—)	—)	—)	—)
Accounts receivable, net	(335)	(345)	(154)	(320)	(902)	(172)
Financing receivables, net	181)	191)	(866)	(739)	(30)	(273)
Deferred contract costs	(795)	(555)	(489)	(432)	(459)	(441)
Prepaid expenses and other assets	(139)	88)	(134)	(271)	(110)	(27)
Accounts payable	43)	107)	(15)	1)	69)	(12)
Accrued compensation	327)	51)	4)	84)	30)	105)
Accrued and other liabilities	95)	148)	385)	(75)	(45)	(29)
Deferred revenue	1,202)	1,238)	2,181)	2,302)	1,970)	1,196)
Changes in operating assets and liabilities, net of effects of acquisitions	579)	923)	910)	551)	524)	349)
Adjustments to reconcile net income (loss) to net cash provided by operating activities	4,246)	2,582)	680)	2,338)	2,252)	2,002)
Net cash provided by operating activities	4,553)	3,716)	3,258)	2,778)	1,985)	1,503)
Purchases of investments	(3,694)	(3,696)	(3,551)	(5,460)	(2,272)	(1,959)
Proceeds from sales of investments	3,489)	1,197)	956)	966)	449)	131)
Proceeds from maturities of investments	2,204)	1,595)	1,853)	2,812)	1,119)	1,241)
Business acquisitions, net of cash and restricted cash acquired	(4,663)	(1,054)	(611)	(205)	(37)	(777)
Purchases of property, equipment, and other assets	(440)	(246)	(157)	(146)	(193)	(116)
Net cash used in investing activities	(3,104)	(2,205)	(1,510)	(2,034)	(933)	(1,481)
Repayments and settlement of conversions of convertible senior notes	(160)	(966)	(1,034)	(1,692)	(1)	(1)
Proceeds from capped calls related to convertible senior notes	10)	—)	—)	—)	—)	—)
Payments for debt issuance costs	—)	—)	—)	—)	—)	—)
Repurchases of common stock	(1,000)	—)	(567)	(273)	(892)	(1,178)
Proceeds from sales of shares through employee equity incentive plans	265)	371)	284)	259)	137)	104)
Payments for taxes related to net share settlement of equity awards	(126)	(184)	(27)	(20)	(50)	(29)
Payments of contingent consideration liability	(191)	—)	—)	—)	—)	—)
Net cash used in financing activities	(1,202)	(779)	(1,343)	(1,726)	(807)	(1,104)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(3)	—)	—)	—)	—)	—)
Net increase (decrease) in cash, cash equivalents, and restricted cash	244)	732)	405)	(983)	245)	(1,082)
Cash, cash equivalents, and restricted cash, beginning of period	2,279)	1,547)	1,142)	2,125)	1,880)	2,962)
Cash, cash equivalents, and restricted cash, end of period	2,523)	2,279)	1,547)	1,142)	2,125)	1,880)

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 financial data indicates a period of significant growth in cash generation from operations, coupled with a strategic shift in investment and financing activities. While net income has exhibited volatility, moving from initial losses to a peak in 2024 before declining, the net cash provided by operating activities has maintained a consistent upward trajectory, increasing from 1,503 million in 2021 to 4,553 million in 2026.

Operating Cash Flow Drivers: A substantial divergence is observed between net income and net cash provided by operating activities. This gap is primarily driven by non-cash charges, most notably share-based compensation, which increased steadily from 895 million in 2021 to 1,774 million in 2026. Additionally, deferred revenue showed strong growth through 2023, peaking at 2,302 million, before experiencing a notable decline to 1,202 million by 2026, suggesting a shift in billing patterns or revenue recognition timing.
Investment Strategy and Capital Expenditure: Investing activities are characterized by aggressive capital allocation. Net cash used in investing activities grew to 3,104 million in 2026. This was heavily influenced by a sharp increase in business acquisitions, which reached 4,663 million in 2026 compared to significantly lower levels in previous years. Purchases of property, equipment, and other assets also trended upward, reaching 440 million in 2026, indicating expanded infrastructure investment.
Financing and Debt Management: Financing activities consistently resulted in net cash outflows, reflecting a strategy of debt reduction and shareholder returns. Significant repayments of convertible senior notes occurred between 2023 and 2024, totaling over 2,700 million across those two years. Common stock repurchases were intermittent but substantial, with 1,000 million spent in 2026 after a pause in 2025.
Liquidity and Cash Position: The ending cash, cash equivalents, and restricted cash balance remained relatively stable despite large outflows for acquisitions and debt repayment. The balance ended at 2,523 million in 2026, supported by the robust growth in operating cash flow which offset the intensified investing and financing expenditures.

Overall, the analysis reveals a transition toward a more cash-generative operating model that supports aggressive inorganic growth and the systematic retirement of debt and equity.

AI Ask an analyst for more

My previous chats

Add tokens

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?