Analysis of Geographic Areas
Palo Alto Networks Inc. operates in 2 regions: United States and Other countries.
Area Asset Turnover
Palo Alto Networks Inc., asset turnover by geographic area
| Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | Jul 31, 2019 | |
|---|---|---|---|---|---|---|
| United States | 11.70 | 11.05 | 7.98 | 5.96 | 4.32 | 7.61 |
| Other countries | 9.39 | 11.35 | 12.63 | 12.55 | 11.86 | 19.27 |
Based on: 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), 10-K (reporting date: 2019-07-31).
- United States Asset Turnover Ratio
- The asset turnover ratio for the United States demonstrates a fluctuating yet overall upward trajectory across the analyzed timeframe. Beginning at 7.61 in 2019, the ratio decreased significantly to 4.32 in 2020, indicating reduced asset efficiency during this period. Following this decline, a recovery trend is observed with the ratio increasing to 5.96 in 2021, further rising sharply to 7.98 in 2022. The upward momentum continued through 2023 and into 2024, reaching 11.05 and 11.70 respectively, representing the highest efficiency within the provided periods.
- Other Countries Asset Turnover Ratio
- The asset turnover ratio for other countries exhibits a consistent decline over the six-year span. Starting from a relatively high level of 19.27 in 2019, the ratio dropped considerably to 11.86 in 2020. After a slight increase to 12.55 in 2021 and a stabilization at 12.63 in 2022, the trend reverses into a gradual decrease with values declining to 11.35 in 2023 and further to 9.39 in 2024. This downward pattern suggests diminishing efficiency in asset utilization in regions outside the United States over time.
- Comparative Insights
- The comparison between the United States and other countries reveals contrasting trends. While the United States shows improving asset turnover ratios post-2020, indicating enhanced effectiveness in using assets to generate revenues, other countries experience a downward trend, reflecting reduced efficiency. Notably, the asset turnover ratio in the United States surpassed that of other countries starting from 2023, marking a significant shift in geographic operational performance. The decrease in other countries' ratios alongside the increase in the United States may suggest a strategic consolidation or varying market dynamics impacting asset utilization efficiency across regions.
Area Asset Turnover: United States
Palo Alto Networks Inc.; United States; area asset turnover calculation
| Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | Jul 31, 2019 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenue | 5,134,000) | 4,424,200) | 3,560,300) | 2,747,800) | 2,168,600) | 1,830,300) |
| Long-lived assets | 438,900) | 400,400) | 446,100) | 461,100) | 502,300) | 240,500) |
| Area Activity Ratio | ||||||
| Area asset turnover1 | 11.70 | 11.05 | 7.98 | 5.96 | 4.32 | 7.61 |
Based on: 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), 10-K (reporting date: 2019-07-31).
1 2024 Calculation
Area asset turnover = Revenue ÷ Long-lived assets
= 5,134,000 ÷ 438,900 = 11.70
- Revenue
-
The revenue demonstrates a consistent upward trend over the six-year period, increasing from $1,830.3 million in 2019 to $5,134 million in 2024. Notably, the growth accelerates particularly after 2020, with yearly increases becoming more pronounced, indicating strong expansion within the United States geographic area.
- Long-lived assets
-
Long-lived assets exhibit fluctuations throughout the timeframe. There is a significant increase from 2019 to 2020, more than doubling from $240.5 million to $502.3 million. However, subsequent years show a gradual decline until 2023, reaching $400.4 million, followed by a modest recovery to $438.9 million in 2024. This variability may suggest changes in investment strategy, asset disposal, or revaluation activities.
- Area asset turnover
-
The area asset turnover ratio, reflecting efficiency in using long-lived assets to generate revenue, generally improves over the observed period. Starting at 7.61 in 2019, it declines sharply in 2020 to 4.32, corresponding with the peak in asset value that year. From 2021 onwards, this ratio increases steadily, reaching 11.7 by 2024, indicating enhanced operational efficiency and a more effective utilization of assets to produce revenue.
- Overall Analysis
-
The data indicates a company experiencing robust revenue growth alongside dynamic asset management within the United States. The initial surge in long-lived assets in 2020 may have temporarily impacted asset turnover efficiency, but subsequent improvements in turnover suggest successful optimization of asset use. These trends together highlight increased productivity and potential strategic asset deployment supporting accelerated revenue growth.
Area Asset Turnover: Other countries
Palo Alto Networks Inc.; Other countries; area asset turnover calculation
| Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | Jul 31, 2019 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenue | 2,893,500) | 2,468,500) | 1,941,200) | 1,508,300) | 1,239,800) | 1,069,300) |
| Long-lived assets | 308,100) | 217,400) | 153,700) | 120,200) | 104,500) | 55,500) |
| Area Activity Ratio | ||||||
| Area asset turnover1 | 9.39 | 11.35 | 12.63 | 12.55 | 11.86 | 19.27 |
Based on: 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), 10-K (reporting date: 2019-07-31).
1 2024 Calculation
Area asset turnover = Revenue ÷ Long-lived assets
= 2,893,500 ÷ 308,100 = 9.39
- Revenue Trend
- The revenue in the "Other countries" geographic area exhibited a consistent year-over-year increase from July 31, 2019, through July 31, 2024. Starting at $1,069,300 thousand in 2019, the revenue grew steadily each year, reaching $2,893,500 thousand by 2024. This reflects a cumulative growth of approximately 170% over the six-year period, indicating strong expansion in this market segment.
- Long-lived Assets Trend
- The value of long-lived assets in this geographic area also showed a robust upward trajectory over the analyzed period. From $55,500 thousand in 2019, the assets nearly doubled by 2020 to $104,500 thousand and continued growing annually to reach $308,100 thousand by 2024. This steady increase signifies substantial investment in long-term assets within this region.
- Area Asset Turnover Ratio Trend
- The area asset turnover ratio, which measures revenue generated per unit of long-lived assets, exhibited a declining trend over the reported years. Beginning at a high ratio of 19.27 in 2019, it decreased gradually to 9.39 by 2024. This decline suggests that while revenue and assets both increased, the efficiency of asset utilization deteriorated, with revenue growth not keeping pace proportionately with the growth in asset base.
- Overall Insights
- The data reflects robust revenue growth supported by significant capital investment in long-lived assets. However, the decreasing asset turnover ratio implies a potential reduction in operational efficiency or a strategic shift towards more capital-intensive operations within the "Other countries" geographic area. This trend warrants further analysis to understand whether the asset base expansion is aligned with long-term revenue growth strategies or if inefficiencies are emerging.
Revenue
Palo Alto Networks Inc., revenue by geographic area
US$ in thousands
| Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | Jul 31, 2019 | |
|---|---|---|---|---|---|---|
| United States | 5,134,000) | 4,424,200) | 3,560,300) | 2,747,800) | 2,168,600) | 1,830,300) |
| Other countries | 2,893,500) | 2,468,500) | 1,941,200) | 1,508,300) | 1,239,800) | 1,069,300) |
| Total | 8,027,500) | 6,892,700) | 5,501,500) | 4,256,100) | 3,408,400) | 2,899,600) |
Based on: 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), 10-K (reporting date: 2019-07-31).
The revenue data across geographic areas reveals a consistent upward trend from July 31, 2019, through July 31, 2024. Both the United States and other countries have contributed to the total revenue growth, with each region showing continuous increases year over year.
- United States Revenue
- Revenues in the United States started at approximately 1,830,300 thousand US dollars in July 2019 and increased steadily each year, reaching 5,134,000 thousand US dollars by July 2024. This represents nearly a threefold increase over the six-year period. The most significant annual growth is observed between July 2021 and July 2022, with an increase of approximately 812,500 thousand US dollars.
- Other Countries Revenue
- Revenue from other countries also demonstrated a steady upward progression, moving from 1,069,300 thousand US dollars in July 2019 to 2,893,500 thousand US dollars in July 2024. This shows an almost 2.7 times growth during the period. The largest increment in non-US revenue occurred between July 2021 and July 2022, similar to the United States, indicating a broad-based global expansion.
- Total Revenue
- The cumulative revenue across both regions grew from 2,899,600 thousand US dollars in July 2019 to 8,027,500 thousand US dollars in July 2024. The data points to strong and consistent growth, with a compound annual increase reflected in the expanding total. The growth rate appears to accelerate especially starting from July 2021 onward, with the year-over-year absolute increase expanding considerably.
Overall, the data demonstrates a robust revenue growth trend in both the domestic and international markets. The growth trajectory is stable and increasingly steep over the analyzed period, indicating successful market penetration and expansion efforts. The parallel growth trends between the United States and other countries suggest balanced geographic diversification contributing to total revenue growth.
Long-lived assets
Palo Alto Networks Inc., long-lived assets by geographic area
US$ in thousands
| Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | Jul 31, 2019 | |
|---|---|---|---|---|---|---|
| United States | 438,900) | 400,400) | 446,100) | 461,100) | 502,300) | 240,500) |
| Other countries | 308,100) | 217,400) | 153,700) | 120,200) | 104,500) | 55,500) |
| Total | 747,000) | 617,800) | 599,800) | 581,300) | 606,800) | 296,000) |
Based on: 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), 10-K (reporting date: 2019-07-31).
- Overall Asset Growth
- The total long-lived assets demonstrated a consistent upward trend over the six-year period, increasing from $296,000 thousand in 2019 to $747,000 thousand in 2024. This indicates significant investment or capital expenditures focused on long-term assets.
- United States Asset Trends
- Long-lived assets in the United States exhibited growth from 2019 to 2020, rising sharply from $240,500 thousand to $502,300 thousand. However, after this peak in 2020, there was a gradual decline through 2023, with values decreasing to $400,400 thousand. In 2024, there was a moderate recovery to $438,900 thousand. Overall, the U.S. assets show volatility with a peak in 2020 followed by a contraction and slight rebound.
- Other Countries Asset Trends
- Assets held in other countries showed a steady and robust increase throughout the period. Starting from $55,500 thousand in 2019, assets more than quintupled to $308,100 thousand by 2024. This segment consistently grew each year, reflecting an expanding international asset base contributing increasingly to the total assets.
- Comparative Regional Analysis
- While the U.S. assets remain the larger portion of the long-lived assets portfolio, their relative contribution has diminished due to the pronounced growth in other countries. The significant expansion abroad suggests a strategic shift or growing emphasis on international investments over time.