Palo Alto Networks Inc. (NASDAQ:PANW) 

Total Asset Turnover

The reported total asset turnover exhibited a slight upward trend from 0.38 in 2020 to a peak of 0.48 in 2023, followed by a decline to 0.39 by 2025. The adjusted total asset turnover shows a stronger and more consistent growth from 0.48 in 2020 to 0.63 in 2023, before moderating to 0.5 in 2025. This suggests an improvement in asset utilization efficiency with a recent tapering.

Current Ratio

The reported current ratio deteriorated sharply from 1.91 in 2020 to 0.77 in 2022 and remained relatively low through 2025, indicating tighter short-term liquidity. In contrast, the adjusted current ratio experienced a dramatic reduction from 7.99 in 2020 to 1.38 in 2022, followed by a steady recovery and strengthening to 4.47 by 2025, suggesting improving liquidity when adjusted for certain factors.

Debt to Equity Ratio

The reported debt to equity ratio surged substantially from 2.8 in 2020 to a high of 17.51 in 2022, then sharply declined to 0.19 in 2024; no data is available for 2025. The adjusted ratio displays a consistent decrease from 0.71 in 2020 to 0.02 in 2025, reflecting a significant improvement in capital structure and reduced reliance on equity financing over time.

Debt to Capital Ratio

The reported debt to capital ratio follows a similar pattern with an initial increase to 0.95 in 2022 and a significant decrease to 0.16 in 2024, with missing data for 2025. The adjusted ratio shows a steady decline from 0.41 in 2020 to 0.02 in 2025, indicating ongoing deleveraging and stronger capital adequacy.

Financial Leverage

The reported financial leverage increased sharply from 8.23 in 2020 to an extreme value of 58.35 in 2022, before reducing to 3.01 in 2025. Adjusted financial leverage declined steadily from 1.85 in 2020 to 1.16 in 2025, showing a consistent trend towards lower leverage when adjustments are made, which suggests improved risk management and balance sheet strength.

Net Profit Margin

The reported net profit margin was negative from 2020 through 2022, reaching its lowest at -11.72% in 2021, then reversing sharply to a positive 32.11% in 2024, followed by some decline to 12.3% in 2025. The adjusted margin remained positive and increased substantially from 15.27% in 2020 to a peak of 30.08% in 2023 before a moderate decline to 20.09% in 2025, indicating improving profitability with some volatility.

Return on Equity (ROE)

The reported ROE showed considerable volatility and negative values from 2020 to 2022, including a deep negative of -127.14% in 2022, then a strong recovery to 49.86% in 2024, subsequently declining to 14.49% in 2025. Adjusted ROE increased steadily from 13.48% in 2020 to 25.01% in 2023 before gradually declining to 11.55% by 2025, demonstrating a more stable and positive trend in shareholders' returns after adjustments.

Return on Assets (ROA)

The reported ROA was negative between 2020 and 2022, improving to positive values starting 2023, peaking at 12.89% in 2024, and decreasing to 4.81% in 2025. The adjusted ROA displayed continuous growth from 7.29% in 2020 to a peak of 19.09% in 2023, followed by a gradual reduction to 9.96% in 2025, reflecting enhanced asset profitability with some moderation in recent years.

The financial data reveals a clear expansion trajectory over the examined periods. Revenue increased consistently from 3,408,400 thousand US dollars in July 2020 to an anticipated 9,221,500 thousand US dollars in July 2025, indicating strong top-line growth. This growth is also reflected in the adjusted revenue figures, which show a rise from 4,329,900 thousand US dollars in July 2020 to an expected 10,492,900 thousand US dollars by July 2025.

Total assets have experienced substantial growth, rising from 9,065,400 thousand US dollars in July 2020 to an anticipated 23,576,200 thousand US dollars in July 2025. This upward trend is mirrored in the adjusted total assets, which show an increase from 9,067,700 thousand US dollars in July 2020 to a forecasted 21,161,700 thousand US dollars by July 2025.

Asset turnover ratios

The reported total asset turnover ratio started at 0.38 in July 2020 and increased to 0.48 by July 2023, indicating improved efficiency in utilizing assets to generate revenue during this initial period. However, the ratio then declines to 0.39 by July 2025, which suggests a potential decrease in asset utilization efficiency moving forward.

The adjusted total asset turnover ratio follows a similar pattern: an increase from 0.48 in July 2020 up to a peak of 0.63 in July 2023, followed by a decline to 0.50 in July 2025. Despite the decrease, this metric remains above the initial levels, reflecting better asset use efficiency relative to the starting point.

Overall, the data reflects strong revenue growth coupled with significant asset base expansion. The improvement in asset turnover ratios up to mid-period signals increasing operational efficiency. However, the subsequent reduction in these ratios may warrant further investigation to determine if asset growth is outpacing revenue generation or if other factors are impacting asset utilization efficiency in the later periods.

Analysis of the annual financial data reveals several notable trends in the liquidity position over the reviewed periods.

Current Assets

The reported current assets demonstrate fluctuations, starting at approximately 5.13 billion USD and dipping to around 4.65 billion USD in 2021. Subsequently, a growth trend is visible, rising to nearly 7.52 billion USD by 2025. This indicates a general strengthening in short-term assets available for meeting obligations.

Current Liabilities

Current liabilities depict a sharp increase from about 2.69 billion USD in 2020 to a peak of 8.31 billion USD in 2022. Following this peak, there is a gradual decline observed through 2025, with liabilities reducing to approximately 7.99 billion USD. This pattern suggests a period of elevated short-term obligations around 2022, followed by efforts to moderate these liabilities.

Reported Current Ratio

The reported current ratio reveals a declining trend from 1.91 in 2020 down to about 0.77 in 2022, indicating decreasing liquidity and a potential strain on the company's ability to cover short-term liabilities with current assets during that timeframe. From 2022 onwards, a modest recovery is observed, with the ratio improving to 0.94 by 2025, though still below the initial 2020 level.

Adjusted Current Assets

The adjusted current assets closely mirror the reported current assets, showing a similar downward movement initially and a recovery trend starting in 2022. The increase from approximately 5.13 billion USD in 2020 to roughly 7.53 billion USD in 2025 reinforces the positive trend in short-term asset growth.

Adjusted Current Liabilities

Adjusted current liabilities display a contrasting pattern compared to the reported figures. Starting from 642.6 million USD in 2020, these liabilities rise markedly to 2.37 billion USD in 2021 and peak at about 4.67 billion USD in 2022. Importantly, from 2022 onward, a significant reduction is observed, declining steadily to 1.69 billion USD by 2025. This marked decrease suggests adjustments in liability recognition or restructuring that favorably impact perceived liquidity.

Adjusted Current Ratio

The adjusted current ratio analysis points to a far more robust liquidity position compared to the reported ratio. Despite a decline from a very high level of 7.99 in 2020 to 1.38 in 2022, the ratio recovers strongly afterward, reaching 4.47 in 2025. This pattern indicates that, when adjusted for certain factors, the company's short-term assets sufficiently cover its liabilities, and in fact, show considerable improvement and strengthening of liquidity over time.

In summary, the data suggests that while initially the company's reported liquidity ratios indicated declining short-term financial strength, the adjusted figures reveal a more optimistic scenario with significant improvement in liquidity from 2022 onward. The reduction in adjusted current liabilities paired with increased adjusted current assets significantly enhances the adjusted current ratio, underscoring stronger short-term financial health in recent years.

The financial data exhibits notable trends in the company's debt and equity positions over the analyzed periods. A detailed evaluation reveals significant changes in both reported and adjusted financial metrics, indicating shifts in the company’s capital structure and financial leverage.

Total Debt

The total debt increased from approximately 3.08 billion USD in 2020 to a peak of about 3.68 billion USD in 2022. Following this, there is a marked and consistent reduction in debt, declining to about 963.9 million USD by 2024. The gradual debt decrease suggests a possible strategy focused on deleveraging or improved debt management.

Stockholders’ Equity

The stockholders' equity shows a declining trend from 1.1 billion USD in 2020 to a low of 210 million USD in 2022. Thereafter, a strong recovery is observed, with equity rising sharply to 5.17 billion USD in 2024 and further to 7.82 billion USD by 2025. This growth reflects an increasing net asset base, potentially due to retained earnings growth, capital infusions, or revaluation of assets.

Reported Debt to Equity Ratio

This ratio increased significantly from 2.8 in 2020 to an elevated 17.51 in 2022, indicating a period of high financial leverage where debt vastly exceeded equity. Post-2022, there has been a sharp reduction in leverage to 0.19 by 2024, suggesting improved equity levels relative to debt and a lower risk profile.

Adjusted Total Debt

Adjusted total debt follows a similar pattern to reported debt, growing from roughly 3.48 billion USD in 2020 to about 4.02 billion USD in 2022. This is followed by a pronounced decline to approximately 1.41 billion USD in 2024 and an estimated further decrease to 417.4 million USD by 2025, indicating consistent deleveraging on an adjusted basis.

Adjusted Stockholders’ Equity

Adjusted equity shows a continual upward trend from 4.91 billion USD in 2020 to 18.25 billion USD in 2025. This substantial growth underscores a strengthening equity base when accounting for adjusted figures, which likely reflects comprehensive changes in equity components.

Adjusted Debt to Equity Ratio

The adjusted leverage ratio demonstrates a steady decline from 0.71 in 2020 to 0.02 by 2025. This low and decreasing value signifies a progressively conservative capital structure with minimal reliance on debt relative to equity, indicating strong financial stability and reduced financial risk.

In summary, the data reveals an initial phase characterized by high leverage and diminishing equity, culminating in elevated debt-to-equity ratios by 2022. Thereafter, a strategic shift is evident with a pronounced reduction in debt and substantial increases in equity, leading to significantly improved leverage ratios. This evolution points towards enhanced financial health, risk mitigation, and a focus on strengthening the equity base over the most recent periods.

Total Debt

Total debt initially increased from 3,084,100 thousand USD in 2020 to a peak of 3,676,800 thousand USD in 2022. Subsequently, it declined significantly to 963,900 thousand USD in 2024, with the 2025 data missing. This indicates a reduction in the company's gross debt level after 2022.

Total Capital

Total capital showed fluctuations in the initial years, decreasing from 4,185,900 thousand USD in 2020 to 3,739,900 thousand USD in 2023. However, there was a notable rebound starting in 2024, increasing substantially to 6,133,600 thousand USD and further to 7,824,400 thousand USD in 2025. This suggests a strengthening capital base in the latter periods.

Reported Debt to Capital Ratio

The reported debt to capital ratio increased steadily from 0.74 in 2020 to a high of 0.95 in 2022, reflecting a rising proportion of debt relative to capital. After 2022, the ratio decreased markedly to 0.16 in 2024, indicating a significant reduction in leverage. The data for 2025 is not available.

Adjusted Total Debt

Adjusted total debt mirrored the trend in total debt, rising from 3,478,600 thousand USD in 2020 to 4,015,200 thousand USD in 2022 before declining sharply to 1,410,300 thousand USD in 2024 and further down to 417,400 thousand USD in 2025. This shows an even more pronounced decrease when adjustments are considered.

Adjusted Total Capital

The adjusted total capital exhibited a consistent upward trend, growing each year from 8,383,900 thousand USD in 2020 to 18,668,500 thousand USD in 2025. This steady increase implies continuous enhancement of the company's overall capital position when adjustments are accounted for.

Adjusted Debt to Capital Ratio

This ratio declined gradually from 0.41 in 2020 to 0.02 in 2025, indicating a steady improvement in the company's debt management relative to its adjusted capital. The sharpest decreases occurred after 2022, underscoring a strategic reduction in leverage and strengthening of financial stability over the analyzed period.

The financial data reveals several noteworthy trends in the company's asset base, equity position, and leverage ratios over the six-year period under review.

Total Assets

Total assets have exhibited a consistent growth trajectory, rising from approximately 9.07 billion USD in 2020 to 23.58 billion USD in 2025. This represents a significant increase in the company’s resource base, more than doubling over the period, with particularly accelerated growth between 2023 and 2025.

Stockholders’ Equity

The reported stockholders’ equity shows fluctuations, initially declining sharply from 1.10 billion USD in 2020 to a low of 210 million USD in 2022, before recovering substantially to 7.82 billion USD in 2025. This volatility suggests periods of equity erosion followed by robust capital strengthening. In contrast, the adjusted equity figures portray a steady and strong increase year-over-year, moving from 4.91 billion USD in 2020 to 18.25 billion USD in 2025, indicating that adjustments result in a more stable and growing equity base.

Financial Leverage (Reported)

The reported financial leverage ratio initially worsened dramatically, increasing from 8.23 in 2020 to a peak of 58.35 in 2022, pointing to a period of substantial reliance on liabilities relative to equity. Post-2022, leverage decreased sharply to 3.01 by 2025, reflecting improvement in the equity base or reduction in liabilities. This fluctuation suggests a period of financial strain or restructuring followed by strengthening of the balance sheet.

Adjusted Total Assets

Adjusted total assets mirror the trend of reported assets with consistent growth over the period, rising from 9.07 billion USD in 2020 to 21.16 billion USD in 2025. However, the adjusted figures show somewhat more conservative growth in the later years compared to reported totals, indicating possible reclassifications or conservative asset valuations.

Adjusted Stockholders’ Equity

The adjusted equity demonstrates a strong and consistent upward trend, growing from 4.91 billion USD in 2020 to 18.25 billion USD in 2025. This steady growth suggests improvements in retained earnings, capital injections, or adjustments that better reflect the company’s true financial strength. The large difference between reported and adjusted equity figures in certain years highlights potential accounting or valuation factors impacting the reported figures.

Adjusted Financial Leverage

Adjusted leverage ratios show a declining trend from 1.85 in 2020 to 1.16 in 2025, indicating a gradual reduction in leverage when considering adjustments. This decline suggests increased financial stability and a stronger equity buffer relative to liabilities, signaling improved risk management and financial health.

Overall, the data indicates that while the company experienced some volatility in its reported equity and leverage positions in the early part of the period, its asset base expanded steadily, and adjusted measures point to strengthening financial health and lower leverage risk by 2025.

Revenue Trends

The revenue has evidenced a consistent upward trajectory over the analyzed periods, increasing from approximately $3.41 billion in 2020 to around $9.22 billion by 2025. This indicates a sustained growth pattern, with the company more than doubling its top-line revenue in five years.

Net Income (Loss) and Profitability

Net income has displayed significant volatility. Initially, the company experienced substantial losses, with net losses peaking near $499 million in 2021. However, a notable turnaround is observed in 2023 with a positive net income of approximately $440 million, followed by a peak at about $2.58 billion in 2024, before declining to roughly $1.13 billion in 2025. The corresponding reported net profit margin follows this pattern, moving from negative margins in the early years (e.g., -7.83% in 2020 and -11.72% in 2021) to a positive and substantial margin of 32.11% in 2024, before decreasing to 12.3% in 2025.

Adjusted Financial Metrics

Adjusted revenue similarly shows growth, rising from approximately $4.33 billion in 2020 to nearly $10.49 billion in 2025. Adjusted net income exhibits a generally positive trend, increasing from about $661 million in 2020 to a peak of nearly $2.77 billion in 2024 before decreasing to approximately $2.11 billion in 2025. Adjusted net profit margin reflects this trend, increasing from 15.27% in 2020 to a high of 30.08% in 2023, then declining to 20.09% by 2025.

Comparative Margin Analysis

The disparity between reported and adjusted metrics suggests the presence of significant one-time or non-operational expenses affecting reported profitability, particularly in the earlier years. Adjusted net profit margins remain positive and relatively stable, indicating underlying operational profitability despite fluctuations in reported net income.

Summary of Financial Performance

Overall, the company exhibits a robust growth trajectory in revenue, supported by improving profitability in adjusted terms. The early period losses give way to profitable years, highlighting operational improvements or effective cost management strategies. The volatility in reported net income and profit margins may warrant further investigation into the nature of adjustments made and the sustainability of recent profitability levels.

Net Income (Loss)

The net income exhibited significant volatility over the periods analyzed. Initially, there were substantial losses in 2020 and 2021, with amounts of approximately -$267 million and -$499 million respectively. This was followed by a return to a loss of the same magnitude as 2020 in 2022. A notable turnaround occurred in 2023, showing a positive net income of about $440 million, which further increased to approximately $2.58 billion in 2024 before declining to roughly $1.13 billion in 2025. This indicates a recovery phase after initial losses, although with some fluctuation in profits in the most recent period.

Stockholders’ Equity

Stockholders’ equity followed a non-linear trend, initially decreasing sharply from about $1.1 billion in 2020 to $210 million in 2022. Following this low, there was a strong recovery phase from 2023 onward, reaching $1.75 billion in 2023 and continuing to grow substantially to $7.82 billion by 2025. This suggests a rebuilding of equity base over the last three years, potentially signifying strengthening financial stability or capital structure improvements during that period.

Reported Return on Equity (ROE)

Reported ROE displayed a dramatic shift over time. Negative values persisted from 2020 to 2022, with a sharp decline reaching -127.14% in 2022, reflecting significant losses relative to shareholder equity. In 2023, the metric reversed to a positive 25.15%, peaking at nearly 50% in 2024, indicative of high profitability relative to equity. However, a decline to 14.49% in 2025 suggests some easing of profitability levels, though still positive overall. This pattern aligns closely with the net income recovery observed.

Adjusted Net Income (Loss)

Adjusted net income showed a consistent upward trend from 2020 through 2024, increasing from approximately $661 million to $2.77 billion. A slight decrease was recorded in 2025 to about $2.11 billion. This steady rise in adjusted profits implies operational improvements or adjustments that smooth out anomalies seen in reported net income, reflecting more sustainable earnings growth over the analyzed periods.

Adjusted Stockholders’ Equity

The adjusted stockholders’ equity grew steadily and substantially throughout the periods presented, starting at about $4.9 billion in 2020 and increasing each year to reach approximately $18.25 billion in 2025. This consistent increase suggests ongoing capital accumulation and retention of earnings when adjusted for certain factors, hinting at a strengthened financial base under this measure.

Adjusted Return on Equity (ROE)

Adjusted ROE remained positive and relatively stable, starting at 13.48% in 2020 and hovering around 12.21% in 2021. It increased notably to 22.94% in 2022 and peaked at 25.01% in 2023 before gradually declining to 18.91% in 2024 and further to 11.55% in 2025. The adjusted ROE trend indicates solid underlying profitability over time with some weakening in the most recent years, corresponding to the adjusted net income movements.

The financial data reveals several notable trends in profitability and asset base over the analyzed periods.

Net Income (Loss)

The company experienced persistent net losses from 2020 through 2022, with losses peaking in 2021 at approximately -498.9 million USD. This trend reversed in 2023, producing a positive net income of roughly 439.7 million USD. The net income then surged significantly in 2024 to approximately 2.58 billion USD, before declining to about 1.13 billion USD in 2025.

Total Assets

Total assets demonstrated a steady upward trajectory throughout the entire period. Starting at around 9.06 billion USD in 2020, assets increased year-over-year, reaching approximately 23.58 billion USD by 2025. This consistent growth reflects expansion in the company's asset base over time.

Reported Return on Assets (ROA)

Reported ROA was negative from 2020 through 2022, with the lowest point at -4.87% in 2021. Starting in 2023, it turned positive, rising sharply to 3.03% and peaking in 2024 at 12.89%. However, ROA declined to 4.81% in 2025, indicating some moderation in asset profitability following the peak year.

Adjusted Net Income (Loss)

Adjusted net income shows a strong improving trend over the analyzed periods. From 661.1 million USD in 2020, it steadily increased to 2.76 billion USD by 2024, before a moderate decline to 2.11 billion USD in 2025. This suggests that adjustments to net income provide a more optimistic view on profitability, with a clear upward trajectory despite some variability in the most recent year.

Adjusted Total Assets

Adjusted total assets follow the same increasing pattern as reported total assets, growing consistently from approximately 9.07 billion USD in 2020 to about 21.16 billion USD by 2025. This continual growth underlines the company's expanding asset base, even after adjustments.

Adjusted ROA

Adjusted ROA trends positively throughout the periods, beginning at 7.29% in 2020, sustaining above 6.7% through 2021, then rising markedly to 19.09% in 2023. In 2024, it slightly decreased to 15.73%, followed by a more pronounced drop to 9.96% in 2025. Although there is a decline in the last two years, adjusted ROA remains substantially higher than the initial periods, indicating improved asset efficiency when factoring in adjustments.

In summary, the company has transitioned from consistent net losses to profitability as reflected in both reported and adjusted figures. This shift coincides with substantial asset growth, which has more than doubled over the period. Adjusted profitability metrics, including net income and ROA, suggest enhanced operational performance and asset utilization, although recent declines in ROA metrics warrant further monitoring. Overall, the data depict a company undergoing significant growth and improvement in profitability metrics from 2023 onward.