Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Palo Alto Networks Inc., solvency ratios
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 solvency profile indicates a significant structural transition from a period of high leverage and negative coverage to a position of substantial financial stability and minimal debt reliance. A consistent deleveraging trend is evident across all primary solvency metrics starting after the 2022 fiscal year.
- Debt Utilization and Capital Structure
- A sharp contraction in debt relative to equity and assets is observed. The debt-to-equity ratio peaked at 17.51 in 2022 before declining precipitously to 0.06 by 2026. Similarly, the debt-to-assets ratio decreased from 0.31 in 2021 to 0.04 in 2026. The inclusion of operating lease liabilities follows the same downward trajectory, suggesting a broad reduction in both financial and operational liabilities relative to the company's asset base.
- Financial Leverage
- Financial leverage experienced extreme volatility between 2021 and 2022, surging from 16.14 to a peak of 58.35. Following this peak, a sustained downward trend occurred, with the ratio falling to 8.29 in 2023 and continuing to decline to 1.76 by 2026. This trajectory indicates a systemic reduction in the use of borrowed funds to finance assets, thereby lowering the overall financial risk profile.
- Debt Servicing Capacity
- A fundamental shift in the ability to service obligations occurred after 2022. Interest coverage ratios were negative in 2021 (-1.85) and 2022 (-6.56), indicating that earnings were insufficient to cover interest expenses. However, a rapid recovery is noted from 2023 onward, with interest coverage escalating to 120.07 in 2024 and reaching 532.90 by 2025. Fixed charge coverage mirrored this recovery, moving from negative territory in 2022 (-1.18) to a peak of 18.52 in 2025, before moderating to 6.15 in 2026.
The convergence of declining leverage ratios and exponentially increasing coverage ratios suggests a shift toward a conservative capital structure. The company has moved from a high-risk solvency state characterized by negative coverage and high debt-to-equity to a highly solvent state with minimal debt obligations and an exceptional capacity to meet fixed financial commitments.
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Debt Ratios
Coverage Ratios
Debt to Equity
Palo Alto Networks Inc., debt to equity calculation, comparison to benchmarks
| Jul 31, 2026 | Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Short-term convertible senior notes | —) | —) | 964) | 1,992) | 3,677) | 1,558) | |
| Long-term convertible senior notes | 1,774) | —) | —) | —) | —) | 1,668) | |
| Total debt | 1,774) | —) | 964) | 1,992) | 3,677) | 3,226) | |
| Stockholders’ equity | 27,492) | 7,824) | 5,170) | 1,748) | 210) | 635) | |
| Solvency Ratio | |||||||
| Debt to equity1 | 0.06 | 0.00 | 0.19 | 1.14 | 17.51 | 5.08 | |
| Benchmarks | |||||||
| Debt to Equity, Competitors2 | |||||||
| Accenture PLC | — | 0.17 | 0.04 | 0.01 | 0.00 | 0.00 | |
| Adobe Inc. | — | 0.53 | 0.40 | 0.22 | 0.29 | 0.28 | |
| AppLovin Corp. | — | 1.70 | 3.36 | 2.61 | 1.72 | 1.53 | |
| Cadence Design Systems Inc. | — | 0.45 | 0.53 | 0.19 | 0.27 | 0.13 | |
| Datadog Inc. | — | 0.26 | 0.59 | 0.37 | 0.52 | 0.71 | |
| International Business Machines Corp. | — | 1.88 | 2.01 | 2.51 | 2.32 | 2.74 | |
| Intuit Inc. | 0.40 | 0.30 | 0.33 | 0.35 | 0.42 | 0.21 | |
| Microsoft Corp. | 0.24 | 0.26 | 0.29 | 0.31 | 0.39 | 0.50 | |
| Oracle Corp. | 3.23 | 4.67 | 9.98 | 84.33 | — | 16.08 | |
| Palantir Technologies Inc. | — | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| Salesforce Inc. | 0.25 | 0.15 | 0.17 | 0.20 | 0.19 | 0.07 | |
| ServiceNow Inc. | — | 0.12 | 0.15 | 0.20 | 0.30 | 0.43 | |
| Synopsys Inc. | — | 0.48 | 0.00 | 0.00 | 0.00 | 0.02 | |
| Workday Inc. | 0.38 | 0.33 | 0.37 | 0.53 | 0.41 | 0.55 | |
| Debt to Equity, Sector | |||||||
| Software & Services | — | 0.50 | 0.55 | 0.64 | 0.71 | 0.83 | |
| Debt to Equity, Industry | |||||||
| Information Technology | — | 0.52 | 0.61 | 0.66 | 0.70 | 0.83 | |
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).
1 2026 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= 1,774 ÷ 27,492 = 0.06
2 Click competitor name to see calculations.
The solvency profile exhibits a significant transition from a highly leveraged position to a state of substantial equity strength over the observed period. An initial phase of increased financial risk transitioned into a period of aggressive deleveraging and rapid capital accumulation, resulting in a drastically improved solvency posture.
- Total Debt Trends
- Total debt experienced an initial increase, peaking at 3,677 million US$ in 2022. This was followed by a consistent downward trajectory, reaching a low of 964 million US$ in 2024. Although a subsequent increase to 1,774 million US$ is noted by 2026, the absolute debt levels remain significantly lower than the 2021-2022 peak.
- Stockholders’ Equity Growth
- Equity levels showed extreme volatility early in the period, dropping to a low of 210 million US$ in 2022. However, from 2023 onward, a period of exponential growth is observed. Equity rose from 1,748 million US$ in 2023 to 27,492 million US$ by 2026, indicating a massive infusion of capital or significant retained earnings growth.
- Debt to Equity Ratio Evolution
- The debt to equity ratio reflects a critical shift in the company's capital structure. A peak ratio of 17.51 in 2022 indicated high financial leverage and increased risk. This figure declined sharply to 1.14 in 2023 and further to 0.19 in 2024. By 2026, the ratio reached 0.06, demonstrating that the company's operations are now almost entirely funded by equity, with minimal reliance on borrowed capital.
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Debt to Equity (including Operating Lease Liability)
Palo Alto Networks Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Jul 31, 2026 | Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Short-term convertible senior notes | —) | —) | 964) | 1,992) | 3,677) | 1,558) | |
| Long-term convertible senior notes | 1,774) | —) | —) | —) | —) | 1,668) | |
| Total debt | 1,774) | —) | 964) | 1,992) | 3,677) | 3,226) | |
| Current portion of operating lease liabilities (included in Accrued and other liabilities) | 67) | 79) | 66) | 60) | 62) | 66) | |
| Long-term operating lease liabilities | 726) | 338) | 381) | 279) | 276) | 313) | |
| Total debt (including operating lease liability) | 2,567) | 417) | 1,410) | 2,331) | 4,015) | 3,605) | |
| Stockholders’ equity | 27,492) | 7,824) | 5,170) | 1,748) | 210) | 635) | |
| Solvency Ratio | |||||||
| Debt to equity (including operating lease liability)1 | 0.09 | 0.05 | 0.27 | 1.33 | 19.12 | 5.68 | |
| Benchmarks | |||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | |||||||
| Accenture PLC | — | 0.26 | 0.15 | 0.12 | 0.15 | 0.18 | |
| Adobe Inc. | — | 0.57 | 0.43 | 0.25 | 0.33 | 0.32 | |
| AppLovin Corp. | — | 1.72 | 3.41 | 2.66 | 1.76 | 1.57 | |
| Cadence Design Systems Inc. | — | 0.49 | 0.56 | 0.24 | 0.34 | 0.18 | |
| Datadog Inc. | — | 0.34 | 0.68 | 0.45 | 0.59 | 0.78 | |
| International Business Machines Corp. | — | 1.98 | 2.14 | 2.66 | 2.46 | 2.92 | |
| Intuit Inc. | 0.44 | 0.34 | 0.36 | 0.39 | 0.46 | 0.25 | |
| Microsoft Corp. | 0.29 | 0.33 | 0.36 | 0.39 | 0.47 | 0.58 | |
| Oracle Corp. | 3.94 | 5.33 | 10.85 | 88.84 | — | 16.61 | |
| Palantir Technologies Inc. | — | 0.03 | 0.05 | 0.07 | 0.10 | 0.11 | |
| Salesforce Inc. | 0.30 | 0.20 | 0.23 | 0.25 | 0.25 | 0.15 | |
| ServiceNow Inc. | — | 0.19 | 0.24 | 0.30 | 0.44 | 0.60 | |
| Synopsys Inc. | — | 0.50 | 0.08 | 0.11 | 0.12 | 0.13 | |
| Workday Inc. | 0.49 | 0.37 | 0.41 | 0.58 | 0.46 | 0.68 | |
| Debt to Equity (including Operating Lease Liability), Sector | |||||||
| Software & Services | — | 0.58 | 0.63 | 0.73 | 0.81 | 0.93 | |
| Debt to Equity (including Operating Lease Liability), Industry | |||||||
| Information Technology | — | 0.58 | 0.67 | 0.72 | 0.76 | 0.90 | |
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).
1 2026 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity
= 2,567 ÷ 27,492 = 0.09
2 Click competitor name to see calculations.
The solvency profile exhibits a transition from a period of high leverage and financial volatility to a highly equity-funded capital structure. A significant shift in the balance between liabilities and equity is observed between 2021 and 2026, characterized by an initial spike in risk followed by a sustained period of deleveraging and equity accumulation.
- Debt to Equity Ratio Volatility and Convergence
- The debt to equity ratio experienced an extreme increase from 5.68 in July 2021 to a peak of 19.12 in July 2022, indicating a period of heightened financial leverage. This trend reversed sharply starting in 2023, with the ratio falling to 1.33, then 0.27 in 2024, and reaching a minimum of 0.05 in 2025. By July 2026, the ratio remained low at 0.09, signaling a robust solvency position and a diminished reliance on borrowed funds relative to shareholder investment.
- Debt Obligation Trends
- Total debt, including operating lease liabilities, peaked at 4,015 million in July 2022. Following this peak, a consistent downward trajectory was maintained, with obligations reducing to 2,331 million in 2023, 1,410 million in 2024, and reaching a low of 417 million in 2025. An increase to 2,567 million is observed in 2026, though this increase is heavily offset by the simultaneous expansion of the equity base.
- Equity Expansion Analysis
- Stockholders' equity showed significant fluctuation and subsequent exponential growth. After declining to a low of 210 million in July 2022, equity expanded rapidly to 1,748 million in 2023 and 5,170 million in 2024. This growth accelerated further to 7,824 million in 2025 and culminated in a substantial increase to 27,492 million by July 2026. The massive accumulation of equity has been the primary driver in neutralizing the impact of debt and improving the overall solvency ratio.
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Debt to Capital
Palo Alto Networks Inc., debt to capital calculation, comparison to benchmarks
| Jul 31, 2026 | Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Short-term convertible senior notes | —) | —) | 964) | 1,992) | 3,677) | 1,558) | |
| Long-term convertible senior notes | 1,774) | —) | —) | —) | —) | 1,668) | |
| Total debt | 1,774) | —) | 964) | 1,992) | 3,677) | 3,226) | |
| Stockholders’ equity | 27,492) | 7,824) | 5,170) | 1,748) | 210) | 635) | |
| Total capital | 29,266) | 7,824) | 6,134) | 3,740) | 3,887) | 3,861) | |
| Solvency Ratio | |||||||
| Debt to capital1 | 0.06 | 0.00 | 0.16 | 0.53 | 0.95 | 0.84 | |
| Benchmarks | |||||||
| Debt to Capital, Competitors2 | |||||||
| Accenture PLC | — | 0.14 | 0.03 | 0.01 | 0.00 | 0.00 | |
| Adobe Inc. | — | 0.35 | 0.29 | 0.18 | 0.23 | 0.22 | |
| AppLovin Corp. | — | 0.63 | 0.77 | 0.72 | 0.63 | 0.60 | |
| Cadence Design Systems Inc. | — | 0.31 | 0.35 | 0.16 | 0.21 | 0.11 | |
| Datadog Inc. | — | 0.21 | 0.37 | 0.27 | 0.34 | 0.41 | |
| International Business Machines Corp. | — | 0.65 | 0.67 | 0.72 | 0.70 | 0.73 | |
| Intuit Inc. | 0.29 | 0.23 | 0.25 | 0.26 | 0.30 | 0.17 | |
| Microsoft Corp. | 0.19 | 0.21 | 0.23 | 0.24 | 0.28 | 0.33 | |
| Oracle Corp. | 0.76 | 0.82 | 0.91 | 0.99 | 1.09 | 0.94 | |
| Palantir Technologies Inc. | — | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| Salesforce Inc. | 0.20 | 0.13 | 0.15 | 0.16 | 0.16 | 0.06 | |
| ServiceNow Inc. | — | 0.10 | 0.13 | 0.16 | 0.23 | 0.30 | |
| Synopsys Inc. | — | 0.32 | 0.00 | 0.00 | 0.00 | 0.02 | |
| Workday Inc. | 0.28 | 0.25 | 0.27 | 0.35 | 0.29 | 0.35 | |
| Debt to Capital, Sector | |||||||
| Software & Services | — | 0.33 | 0.35 | 0.39 | 0.42 | 0.45 | |
| Debt to Capital, Industry | |||||||
| Information Technology | — | 0.34 | 0.38 | 0.40 | 0.41 | 0.45 | |
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).
1 2026 Calculation
Debt to capital = Total debt ÷ Total capital
= 1,774 ÷ 29,266 = 0.06
2 Click competitor name to see calculations.
The solvency profile of the organization exhibits a significant shift from high leverage to a conservative capital structure over the analyzed period. Between 2021 and 2026, a consistent reduction in the relative weight of debt within the total capital base is observed, indicating a strategic transition toward financial stability.
- Total Debt Trajectory
- Total debt levels peaked in 2022 at 3,677 million USD before entering a phase of aggressive deleveraging. This downward trend continued through 2024, where debt reached a period low of 964 million USD. Although an increase to 1,774 million USD is noted by 2026, the absolute debt levels remain significantly lower than those recorded in the 2021-2022 window.
- Total Capital Expansion
- The total capital base remained relatively stagnant between 2021 and 2023, fluctuating around 3,800 million USD. However, a period of rapid expansion began in 2024, with capital increasing to 6,134 million USD and continuing an exponential climb to 29,266 million USD by 2026. This substantial growth in the capital base suggests a significant increase in equity or retained earnings.
- Debt to Capital Ratio Interpretation
- The debt to capital ratio peaked at 0.95 in 2022, signifying that debt constituted the vast majority of the organization's capital. A sharp decline followed, with the ratio dropping to 0.53 in 2023 and further to 0.16 in 2024. By 2026, the ratio reached a minimum of 0.06. This trend demonstrates a profound reduction in financial leverage and a diminished reliance on borrowed funds to sustain operations and growth.
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Debt to Capital (including Operating Lease Liability)
Palo Alto Networks Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Jul 31, 2026 | Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Short-term convertible senior notes | —) | —) | 964) | 1,992) | 3,677) | 1,558) | |
| Long-term convertible senior notes | 1,774) | —) | —) | —) | —) | 1,668) | |
| Total debt | 1,774) | —) | 964) | 1,992) | 3,677) | 3,226) | |
| Current portion of operating lease liabilities (included in Accrued and other liabilities) | 67) | 79) | 66) | 60) | 62) | 66) | |
| Long-term operating lease liabilities | 726) | 338) | 381) | 279) | 276) | 313) | |
| Total debt (including operating lease liability) | 2,567) | 417) | 1,410) | 2,331) | 4,015) | 3,605) | |
| Stockholders’ equity | 27,492) | 7,824) | 5,170) | 1,748) | 210) | 635) | |
| Total capital (including operating lease liability) | 30,059) | 8,242) | 6,580) | 4,079) | 4,225) | 4,240) | |
| Solvency Ratio | |||||||
| Debt to capital (including operating lease liability)1 | 0.09 | 0.05 | 0.21 | 0.57 | 0.95 | 0.85 | |
| Benchmarks | |||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | |||||||
| Accenture PLC | — | 0.21 | 0.13 | 0.11 | 0.13 | 0.15 | |
| Adobe Inc. | — | 0.36 | 0.30 | 0.20 | 0.25 | 0.24 | |
| AppLovin Corp. | — | 0.63 | 0.77 | 0.73 | 0.64 | 0.61 | |
| Cadence Design Systems Inc. | — | 0.33 | 0.36 | 0.19 | 0.25 | 0.15 | |
| Datadog Inc. | — | 0.26 | 0.40 | 0.31 | 0.37 | 0.44 | |
| International Business Machines Corp. | — | 0.66 | 0.68 | 0.73 | 0.71 | 0.74 | |
| Intuit Inc. | 0.31 | 0.25 | 0.26 | 0.28 | 0.31 | 0.20 | |
| Microsoft Corp. | 0.23 | 0.25 | 0.27 | 0.28 | 0.32 | 0.37 | |
| Oracle Corp. | 0.80 | 0.84 | 0.92 | 0.99 | 1.08 | 0.94 | |
| Palantir Technologies Inc. | — | 0.03 | 0.05 | 0.06 | 0.09 | 0.10 | |
| Salesforce Inc. | 0.23 | 0.16 | 0.19 | 0.20 | 0.20 | 0.13 | |
| ServiceNow Inc. | — | 0.16 | 0.19 | 0.23 | 0.31 | 0.37 | |
| Synopsys Inc. | — | 0.34 | 0.07 | 0.10 | 0.11 | 0.11 | |
| Workday Inc. | 0.33 | 0.27 | 0.29 | 0.37 | 0.32 | 0.41 | |
| Debt to Capital (including Operating Lease Liability), Sector | |||||||
| Software & Services | — | 0.37 | 0.39 | 0.42 | 0.45 | 0.48 | |
| Debt to Capital (including Operating Lease Liability), Industry | |||||||
| Information Technology | — | 0.37 | 0.40 | 0.42 | 0.43 | 0.47 | |
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).
1 2026 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 2,567 ÷ 30,059 = 0.09
2 Click competitor name to see calculations.
The analysis of solvency reveals a fundamental shift in the capital structure between 2021 and 2026, characterized by a transition from high leverage to a position of significant capital strength.
- Debt to Capital Ratio Trends
- The debt to capital ratio experienced a peak of 0.95 in 2022, indicating that debt constituted the vast majority of the total capital. This was followed by a sustained and sharp decline over the subsequent three years, reaching a low of 0.05 in 2025. A marginal increase to 0.09 was observed in 2026, though the ratio remains substantially lower than the levels seen in the early part of the period.
- Total Debt Volatility
- Total debt, inclusive of operating lease liabilities, showed a pattern of initial growth followed by aggressive reduction. After peaking at US$ 4,015 million in 2022, total debt was systematically reduced to US$ 417 million by 2025. A significant increase back to US$ 2,567 million occurred in 2026, suggesting a strategic return to borrowing or new lease obligations.
- Total Capital Growth
- Total capital remained relatively stagnant from 2021 to 2023, fluctuating between US$ 4,079 million and US$ 4,240 million. However, a period of exponential expansion began in 2024, with capital rising to US$ 6,580 million and eventually surging to US$ 30,059 million by 2026. This rapid increase in the capital base acted as a primary driver in lowering the solvency ratio, effectively neutralizing the impact of the debt increase observed in the final year.
The overall trajectory indicates a strategic deleveraging phase that culminated in 2025, followed by a massive expansion of the capital base in 2026. This evolution has resulted in a significantly improved solvency profile, where the company maintains a very low reliance on debt relative to its total capital.
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Debt to Assets
Palo Alto Networks Inc., debt to assets calculation, comparison to benchmarks
| Jul 31, 2026 | Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Short-term convertible senior notes | —) | —) | 964) | 1,992) | 3,677) | 1,558) | |
| Long-term convertible senior notes | 1,774) | —) | —) | —) | —) | 1,668) | |
| Total debt | 1,774) | —) | 964) | 1,992) | 3,677) | 3,226) | |
| Total assets | 48,460) | 23,576) | 19,991) | 14,501) | 12,254) | 10,242) | |
| Solvency Ratio | |||||||
| Debt to assets1 | 0.04 | 0.00 | 0.05 | 0.14 | 0.30 | 0.31 | |
| Benchmarks | |||||||
| Debt to Assets, Competitors2 | |||||||
| Accenture PLC | — | 0.08 | 0.02 | 0.00 | 0.00 | 0.00 | |
| Adobe Inc. | — | 0.21 | 0.19 | 0.12 | 0.15 | 0.15 | |
| AppLovin Corp. | — | 0.50 | 0.62 | 0.61 | 0.56 | 0.53 | |
| Cadence Design Systems Inc. | — | 0.24 | 0.28 | 0.11 | 0.15 | 0.08 | |
| Datadog Inc. | — | 0.15 | 0.28 | 0.19 | 0.25 | 0.31 | |
| International Business Machines Corp. | — | 0.40 | 0.40 | 0.42 | 0.40 | 0.39 | |
| Intuit Inc. | 0.21 | 0.16 | 0.19 | 0.22 | 0.25 | 0.13 | |
| Microsoft Corp. | 0.14 | 0.14 | 0.15 | 0.16 | 0.18 | 0.21 | |
| Oracle Corp. | 0.52 | 0.57 | 0.62 | 0.67 | 0.69 | 0.64 | |
| Palantir Technologies Inc. | — | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| Salesforce Inc. | 0.13 | 0.09 | 0.10 | 0.12 | 0.12 | 0.04 | |
| ServiceNow Inc. | — | 0.06 | 0.07 | 0.09 | 0.11 | 0.15 | |
| Synopsys Inc. | — | 0.28 | 0.00 | 0.00 | 0.00 | 0.01 | |
| Workday Inc. | 0.17 | 0.17 | 0.18 | 0.22 | 0.18 | 0.21 | |
| Debt to Assets, Sector | |||||||
| Software & Services | — | 0.22 | 0.23 | 0.25 | 0.26 | 0.28 | |
| Debt to Assets, Industry | |||||||
| Information Technology | — | 0.23 | 0.25 | 0.26 | 0.26 | 0.29 | |
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).
1 2026 Calculation
Debt to assets = Total debt ÷ Total assets
= 1,774 ÷ 48,460 = 0.04
2 Click competitor name to see calculations.
A significant improvement in solvency is evident over the observed period, characterized by a consistent decline in the debt-to-assets ratio and a substantial expansion of the asset base.
- Asset Growth Trends
- Total assets exhibit a strong and continuous upward trajectory, increasing from 10,242 million USD in 2021 to 48,460 million USD by 2026. This represents a substantial expansion of the company's resource base, with the most significant acceleration occurring between 2025 and 2026.
- Debt Obligation Patterns
- Total debt peaked in 2022 at 3,677 million USD before entering a period of sharp decline, reaching a low of 964 million USD in 2024. While there is an increase to 1,774 million USD recorded in 2026, the total debt level remains significantly lower than the levels observed in 2021 and 2022.
- Debt to Assets Ratio Analysis
- The debt-to-assets ratio demonstrates a marked downward trend, falling from 0.31 in 2021 to 0.04 in 2026. This reduction is driven by the dual effect of decreasing total debt and rapidly increasing total assets. The transition from a ratio of 0.31 to 0.04 indicates a shift toward a highly conservative capital structure, significantly reducing financial leverage and enhancing the overall solvency profile of the organization.
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Debt to Assets (including Operating Lease Liability)
Palo Alto Networks Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Jul 31, 2026 | Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Short-term convertible senior notes | —) | —) | 964) | 1,992) | 3,677) | 1,558) | |
| Long-term convertible senior notes | 1,774) | —) | —) | —) | —) | 1,668) | |
| Total debt | 1,774) | —) | 964) | 1,992) | 3,677) | 3,226) | |
| Current portion of operating lease liabilities (included in Accrued and other liabilities) | 67) | 79) | 66) | 60) | 62) | 66) | |
| Long-term operating lease liabilities | 726) | 338) | 381) | 279) | 276) | 313) | |
| Total debt (including operating lease liability) | 2,567) | 417) | 1,410) | 2,331) | 4,015) | 3,605) | |
| Total assets | 48,460) | 23,576) | 19,991) | 14,501) | 12,254) | 10,242) | |
| Solvency Ratio | |||||||
| Debt to assets (including operating lease liability)1 | 0.05 | 0.02 | 0.07 | 0.16 | 0.33 | 0.35 | |
| Benchmarks | |||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | |||||||
| Accenture PLC | — | 0.13 | 0.07 | 0.06 | 0.07 | 0.08 | |
| Adobe Inc. | — | 0.23 | 0.20 | 0.14 | 0.17 | 0.17 | |
| AppLovin Corp. | — | 0.51 | 0.63 | 0.62 | 0.57 | 0.54 | |
| Cadence Design Systems Inc. | — | 0.26 | 0.29 | 0.14 | 0.18 | 0.11 | |
| Datadog Inc. | — | 0.19 | 0.32 | 0.23 | 0.28 | 0.34 | |
| International Business Machines Corp. | — | 0.43 | 0.43 | 0.44 | 0.42 | 0.42 | |
| Intuit Inc. | 0.23 | 0.18 | 0.20 | 0.24 | 0.27 | 0.16 | |
| Microsoft Corp. | 0.17 | 0.18 | 0.19 | 0.19 | 0.21 | 0.25 | |
| Oracle Corp. | 0.64 | 0.65 | 0.67 | 0.71 | 0.73 | 0.66 | |
| Palantir Technologies Inc. | — | 0.03 | 0.04 | 0.05 | 0.07 | 0.08 | |
| Salesforce Inc. | 0.16 | 0.12 | 0.14 | 0.15 | 0.15 | 0.10 | |
| ServiceNow Inc. | — | 0.09 | 0.11 | 0.13 | 0.17 | 0.21 | |
| Synopsys Inc. | — | 0.30 | 0.05 | 0.07 | 0.07 | 0.08 | |
| Workday Inc. | 0.21 | 0.19 | 0.20 | 0.24 | 0.20 | 0.26 | |
| Debt to Assets (including Operating Lease Liability), Sector | |||||||
| Software & Services | — | 0.26 | 0.27 | 0.29 | 0.30 | 0.32 | |
| Debt to Assets (including Operating Lease Liability), Industry | |||||||
| Information Technology | — | 0.26 | 0.28 | 0.28 | 0.29 | 0.31 | |
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).
1 2026 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 2,567 ÷ 48,460 = 0.05
2 Click competitor name to see calculations.
The solvency profile of the organization exhibits a significant strengthening trend between July 2021 and July 2026. This period is characterized by a substantial reduction in financial leverage and a consistent expansion of the asset base, leading to a marked improvement in the company's ability to cover its total obligations with its assets.
- Debt Trajectory
- Total debt, including operating lease liabilities, initially increased from US$ 3,605 million in 2021 to a peak of US$ 4,015 million in 2022. This was followed by a period of aggressive deleveraging, with debt levels falling consistently for three consecutive years to reach a minimum of US$ 417 million by July 2025. A notable increase to US$ 2,567 million occurred in 2026, suggesting a new phase of financing or strategic investment.
- Asset Expansion
- Total assets demonstrated a continuous upward trend throughout the analysis period. Growth was steady from 2021 (US$ 10,242 million) through 2025 (US$ 23,576 million), followed by a substantial surge in July 2026, where assets increased to US$ 48,460 million. This rapid expansion in the final year suggests a significant acquisition or a large-scale capital injection.
- Debt to Assets Ratio Analysis
- The debt to assets ratio reflects a strong overall improvement in solvency. The ratio declined from 0.35 in 2021 to 0.02 in 2025, indicating that the company reduced its reliance on borrowed funds while growing its asset base. Although the ratio rose slightly to 0.05 in 2026 due to the increase in total debt, the simultaneous and more aggressive growth in total assets mitigated the impact, maintaining a solvency position far superior to the levels observed at the start of the period.
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Financial Leverage
Palo Alto Networks Inc., financial leverage calculation, comparison to benchmarks
| Jul 31, 2026 | Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Total assets | 48,460) | 23,576) | 19,991) | 14,501) | 12,254) | 10,242) | |
| Stockholders’ equity | 27,492) | 7,824) | 5,170) | 1,748) | 210) | 635) | |
| Solvency Ratio | |||||||
| Financial leverage1 | 1.76 | 3.01 | 3.87 | 8.29 | 58.35 | 16.14 | |
| Benchmarks | |||||||
| Financial Leverage, Competitors2 | |||||||
| Accenture PLC | — | 2.10 | 1.98 | 1.99 | 2.14 | 2.21 | |
| Adobe Inc. | — | 2.54 | 2.14 | 1.80 | 1.93 | 1.84 | |
| AppLovin Corp. | — | 3.40 | 5.39 | 4.27 | 3.07 | 2.88 | |
| Cadence Design Systems Inc. | — | 1.85 | 1.92 | 1.67 | 1.87 | 1.60 | |
| Datadog Inc. | — | 1.78 | 2.13 | 1.94 | 2.13 | 2.29 | |
| International Business Machines Corp. | — | 4.65 | 5.02 | 6.00 | 5.80 | 6.98 | |
| Intuit Inc. | 1.94 | 1.88 | 1.74 | 1.61 | 1.69 | 1.57 | |
| Microsoft Corp. | 1.71 | 1.80 | 1.91 | 2.00 | 2.19 | 2.35 | |
| Oracle Corp. | 6.16 | 8.23 | 16.20 | 125.24 | — | 25.03 | |
| Palantir Technologies Inc. | — | 1.20 | 1.27 | 1.30 | 1.35 | 1.42 | |
| Salesforce Inc. | 1.90 | 1.68 | 1.67 | 1.69 | 1.64 | 1.60 | |
| ServiceNow Inc. | — | 2.01 | 2.12 | 2.28 | 2.64 | 2.92 | |
| Synopsys Inc. | — | 1.70 | 1.45 | 1.68 | 1.71 | 1.65 | |
| Workday Inc. | 2.32 | 1.99 | 2.04 | 2.41 | 2.31 | 2.66 | |
| Financial Leverage, Sector | |||||||
| Software & Services | — | 2.22 | 2.35 | 2.55 | 2.72 | 2.95 | |
| Financial Leverage, Industry | |||||||
| Information Technology | — | 2.25 | 2.44 | 2.53 | 2.65 | 2.87 | |
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).
1 2026 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= 48,460 ÷ 27,492 = 1.76
2 Click competitor name to see calculations.
The financial leverage profile exhibits a significant transformation, transitioning from a period of extreme volatility to a state of strengthened solvency and capital stability.
- Total Asset Expansion
- Total assets demonstrate a consistent upward trajectory, growing from 10,242 million USD in 2021 to 48,460 million USD by 2026. A marked acceleration is observed between 2025 and 2026, where assets more than double, indicating a rapid expansion of the balance sheet.
- Stockholders' Equity Dynamics
- Equity experienced a sharp contraction in 2022, falling to a low of 210 million USD. This was followed by a period of aggressive growth, with equity rising to 5,170 million USD in 2024 and reaching 27,492 million USD by 2026. This recovery suggests a substantial strengthening of the internal capital base.
- Financial Leverage Trend
- The financial leverage ratio peaked at 58.35 in 2022, reflecting a high reliance on liabilities relative to equity. Following this peak, a consistent and sharp downward trend is observed, with the ratio decreasing to 8.29 in 2023, 3.01 in 2025, and concluding at 1.76 in 2026. This progression indicates a systematic reduction in financial risk and a strategic shift toward a more equity-funded capital structure.
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Interest Coverage
Palo Alto Networks Inc., interest coverage calculation, comparison to benchmarks
| Jul 31, 2026 | Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income (loss) | 307) | 1,134) | 2,578) | 440) | (267) | (499) | |
| Add: Income tax expense | 229) | 462) | (1,589) | 127) | 60) | 34) | |
| Add: Interest expense | —) | 3) | 8) | 27) | 27) | 163) | |
| Earnings before interest and tax (EBIT) | 536) | 1,599) | 997) | 594) | (180) | (302) | |
| Solvency Ratio | |||||||
| Interest coverage1 | — | 532.90 | 120.07 | 21.82 | -6.56 | -1.85 | |
| Benchmarks | |||||||
| Interest Coverage, Competitors2 | |||||||
| Accenture PLC | — | 45.94 | 165.48 | 193.31 | 195.34 | 131.46 | |
| Adobe Inc. | — | 34.21 | 42.01 | 61.17 | 54.64 | 51.49 | |
| AppLovin Corp. | — | 20.09 | 5.95 | 2.38 | -0.19 | 1.45 | |
| Cadence Design Systems Inc. | — | 14.06 | 19.37 | 36.43 | 46.58 | 46.26 | |
| Datadog Inc. | — | 12.49 | 29.85 | 10.56 | -1.30 | 0.12 | |
| International Business Machines Corp. | — | 6.35 | 4.40 | 6.42 | 1.97 | 5.20 | |
| Intuit Inc. | 24.50 | 20.57 | 15.67 | 13.05 | 32.38 | 89.14 | |
| Microsoft Corp. | 55.39 | 52.84 | 37.72 | 46.38 | 41.58 | 31.31 | |
| Oracle Corp. | 5.30 | 5.01 | 4.39 | 3.65 | 3.84 | 6.28 | |
| Palantir Technologies Inc. | — | — | — | 69.33 | -87.97 | -133.20 | |
| Salesforce Inc. | 30.38 | 28.35 | 18.49 | 3.20 | 7.93 | 21.49 | |
| ServiceNow Inc. | — | 99.30 | 76.57 | 43.00 | 15.78 | 9.89 | |
| Synopsys Inc. | — | 4.12 | 44.06 | 1,106.08 | 657.96 | 240.38 | |
| Workday Inc. | 9.85 | 6.60 | 4.12 | -1.54 | 1.97 | -3.00 | |
| Interest Coverage, Sector | |||||||
| Software & Services | — | 20.61 | 17.74 | 16.91 | 17.77 | 17.09 | |
| Interest Coverage, Industry | |||||||
| Information Technology | — | 25.81 | 19.15 | 17.37 | 22.18 | 19.66 | |
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).
1 2026 Calculation
Interest coverage = EBIT ÷ Interest expense
= 536 ÷ 0 = —
2 Click competitor name to see calculations.
A significant transformation in the company's solvency profile is evident over the analyzed period. The transition from operating losses to substantial profitability, coupled with a drastic reduction in financing costs, has resulted in an exponential increase in the capacity to service interest obligations.
- Earnings Before Interest and Tax (EBIT)
- Operational profitability underwent a fundamental shift between 2021 and 2023. Initial losses of US$302 million in 2021 were reduced to US$180 million in 2022 before pivoting to a positive US$594 million in 2023. This upward momentum continued through 2025, peaking at US$1,599 million, although a significant contraction to US$536 million is observed in 2026.
- Interest Expense
- Debt servicing costs experienced a sharp and consistent decline. From a peak of US$163 million in 2021, expenses dropped precipitously to US$27 million in 2022. This downward trend persisted through 2025, where interest expenses reached a minimum of US$3 million, indicating a substantial reduction in interest-bearing debt or a successful restructuring of liabilities.
- Interest Coverage Ratio
- The interest coverage ratio demonstrates the compounding effect of rising operating income and falling interest costs. The ratio moved from negative territory in 2021 (-1.85) and 2022 (-6.56) to a positive 21.82 in 2023. The ratio then escalated rapidly to 120.07 in 2024 and reached 532.90 by 2025. This trajectory indicates a move from a state of financial vulnerability to a position of extreme solvency, where earnings are more than sufficient to cover all interest obligations.
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Fixed Charge Coverage
Palo Alto Networks Inc., fixed charge coverage calculation, comparison to benchmarks
| Jul 31, 2026 | Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income (loss) | 307) | 1,134) | 2,578) | 440) | (267) | (499) | |
| Add: Income tax expense | 229) | 462) | (1,589) | 127) | 60) | 34) | |
| Add: Interest expense | —) | 3) | 8) | 27) | 27) | 163) | |
| Earnings before interest and tax (EBIT) | 536) | 1,599) | 997) | 594) | (180) | (302) | |
| Add: Operating lease costs | 104) | 88) | 76) | 64) | 68) | 59) | |
| Earnings before fixed charges and tax | 640) | 1,687) | 1,072) | 658) | (112) | (242) | |
| Interest expense | —) | 3) | 8) | 27) | 27) | 163) | |
| Operating lease costs | 104) | 88) | 76) | 64) | 68) | 59) | |
| Fixed charges | 104) | 91) | 84) | 91) | 95) | 223) | |
| Solvency Ratio | |||||||
| Fixed charge coverage1 | 6.15 | 18.52 | 12.78 | 7.20 | -1.18 | -1.09 | |
| Benchmarks | |||||||
| Fixed Charge Coverage, Competitors2 | |||||||
| Accenture PLC | — | 11.72 | 13.46 | 10.98 | 12.25 | 10.41 | |
| Adobe Inc. | — | 25.40 | 26.20 | 30.56 | 26.79 | 25.59 | |
| AppLovin Corp. | — | 18.93 | 5.73 | 2.30 | -0.07 | 1.35 | |
| Cadence Design Systems Inc. | — | 9.12 | 11.13 | 14.79 | 15.50 | 13.77 | |
| Datadog Inc. | — | 2.93 | 5.09 | 2.47 | 0.09 | 0.55 | |
| International Business Machines Corp. | — | 4.50 | 3.13 | 4.32 | 1.52 | 3.13 | |
| Intuit Inc. | 16.12 | 14.50 | 11.14 | 9.03 | 14.67 | 25.58 | |
| Microsoft Corp. | 17.56 | 16.63 | 17.61 | 19.44 | 19.50 | 16.90 | |
| Oracle Corp. | 3.61 | 3.71 | 3.55 | 3.12 | 3.22 | 5.17 | |
| Palantir Technologies Inc. | — | 29.99 | 9.48 | 4.62 | -5.06 | -7.89 | |
| Salesforce Inc. | 11.15 | 8.78 | 4.74 | 1.51 | 2.18 | 2.92 | |
| ServiceNow Inc. | — | 14.30 | 12.36 | 7.59 | 3.87 | 2.95 | |
| Synopsys Inc. | — | 3.47 | 12.88 | 14.38 | 12.91 | 9.29 | |
| Workday Inc. | 4.67 | 3.69 | 2.60 | -0.29 | 1.15 | -0.69 | |
| Fixed Charge Coverage, Sector | |||||||
| Software & Services | — | 10.45 | 9.93 | 9.38 | 9.33 | 9.14 | |
| Fixed Charge Coverage, Industry | |||||||
| Information Technology | — | 15.32 | 12.24 | 11.19 | 13.23 | 12.08 | |
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).
1 2026 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 640 ÷ 104 = 6.15
2 Click competitor name to see calculations.
The financial trajectory between 2021 and 2026 demonstrates a significant transition from negative earnings to a strong solvency position, followed by a subsequent correction in the final period. A period of initial instability is replaced by a phase of rapid expansion in earnings capacity, which drastically improves the ability to meet fixed financial obligations.
- Earnings Before Fixed Charges and Tax
- A notable recovery is observed starting in 2023, where earnings shifted from a deficit of -112 million US$ in 2022 to a positive 658 million US$. This upward momentum continued through 2025, reaching a peak of 1,687 million US$. However, a sharp decline occurs in 2026, with earnings falling to 640 million US$, indicating a reduction in the operational surplus available for debt servicing.
- Fixed Charges Trend
- Fixed charges experienced a substantial reduction between 2021 and 2022, dropping from 223 million US$ to 95 million US$. For the subsequent three years, these costs remained relatively stable, fluctuating slightly between 84 million US$ and 91 million US$. A moderate increase to 104 million US$ is noted in 2026, coinciding with the decline in earnings.
- Fixed Charge Coverage Ratio
- The coverage ratio reflects the volatility of the earnings. Negative ratios in 2021 (-1.09) and 2022 (-1.18) indicate that earnings were insufficient to cover fixed charges. A pivot to a positive ratio of 7.20 in 2023 marks a critical improvement in solvency. The ratio peaked at 18.52 in 2025, signifying an exceptionally high margin of safety. By 2026, the ratio compressed to 6.15, a result of both decreased earnings and increased fixed charges, though it remains well above the threshold for solvency risk.
Overall, the analysis indicates a period of aggressive financial strengthening between 2023 and 2025. While the 2026 figures show a decline in the coverage margin, the overall solvency profile remains substantially stronger than the initial 2021-2022 period.
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