Palo Alto Networks Inc. (NASDAQ:PANW)

Gross profit margin

The gross profit margin remained relatively stable throughout the periods, fluctuating within a narrow range around 70%. Starting at approximately 70.42%, it experienced a slight downward trend in the early quarters, reaching a low near 68.76%. From early 2023 onwards, there was a consistent upward movement culminating around 74.43%, before slightly stabilizing close to 73.47% by the final period. This indicates an improvement in cost efficiency or pricing power over time.

Operating profit margin

Operating profit margin showed a marked improvement across the reported quarters. Initially, the company operated at a negative margin, starting near -4.79% and declining to as low as -7.51%. However, an upward trend began around the end of 2021, with margins crossing into positive territory by early 2023. The margins continued to increase steadily, peaking above 13%, signifying enhanced operational efficiency and better management of operating expenses.

Net profit margin

The net profit margin mirrored the operating margin's improvement but exhibited more volatility. Early quarters were characterized by negative margins, worsening to approximately -11.72%. From early 2023, net margin turned positive and increased notably, peaking at over 32%. This surge suggests extraordinary gains or non-operating income possibly influencing profitability. Following the peak, there was a decline to approximately 11.69%, though margins remained positive, exhibiting profit retention but at a more moderated level.

Return on equity (ROE)

Return on equity exhibited significant volatility and negative performance in the initial periods, with values declining steeply to an extreme low near -391.77%. This indicates periods of substantial losses relative to shareholder equity. Beginning in late 2022, ROE improved markedly, reaching positive territory and climbing as high as approximately 54.78%. Despite this recovery, ROE showed a downward trend after the peak, settling near 12.89% by the end, suggesting a normalization of returns on equity after the volatile phase.

Return on assets (ROA)

Return on assets mirrored trends in net profitability, starting with negative values near -4.87% and gradually improving over time. ROA crossed into positive territory around early 2023 and escalated to a peak of approximately 13.65%. This was followed by a period of decline, with ROA falling to around 4.75% by the last reported quarter. The pattern reflects improved asset utilization and profitability, albeit with a recent stabilization at moderate levels.

The financial data reflects a consistent upward trend in both revenue and gross profit over the analyzed periods. Revenue increased from US$946 million in October 2020 to a peak around US$2,536 million by October 2025, demonstrating robust growth. Similarly, gross profit rose from US$668 million to approximately US$1,857 million over the same timeframe. This growth indicates effective revenue generation and cost management contributing to expanding profits.

The gross profit margin exhibits a generally positive trajectory with some fluctuations. Starting at around 70.42% in October 2020, it dipped slightly during the early periods, reaching a low near 68.76%, before steadily increasing to approximately 73.47% by the end of the period. This improvement in margin suggests enhanced operational efficiency or favorable product mix changes, leading to a higher proportion of revenue being converted into gross profit.

Revenue Trend

Revenue shows steady quarterly increases with occasional minor fluctuations. The growth rate accelerates notably after early 2021, maintaining a strong upward momentum through 2025.

Gross Profit Trend

Gross profit mirrors revenue growth closely, reflecting consistent control over costs of goods sold. The magnitude of gross profit increases supports sustained business expansion.

Gross Profit Margin Analysis

Initial margins hovered near 70%, slightly declining during mid-2021 but recovering strongly afterward.

The margin rise from 68.76% to over 73% indicates improved cost efficiency or shifts toward higher-margin offerings.

Stabilization of the margin in the last several periods suggests the company has reached a sustainable profitability level amid continued growth.

Overall, the data reveals a company experiencing healthy and consistent growth in revenue and profitability. The expanding gross profit margin highlights enhanced operational performance, which, combined with substantial top-line growth, positions the company favorably in its market environment. The sustained upward trends and margin improvement reflect successful strategic execution over the multiple quarters analyzed.

The analysis of the financial data reveals several significant trends in the company's quarterly performance over the observed period.

Revenue

The revenue showed a consistent upward trajectory throughout the timeline. Beginning at 946 million USD in October 2020, it experienced steady growth each quarter, reaching a peak of approximately 2,536 million USD by October 2025. This represents a substantial increase, indicating successful expansion or market penetration strategies.

Operating Income (Loss)

Operating income initially reflected losses, with negative values ranging from -45 million USD to around -110 million USD in the early quarters. This loss trend began to improve around mid-2022, crossing into positive territory with 15 million USD, and continuing to increase significantly thereafter. By October 2025, operating income had grown to 309 million USD, demonstrating a turnaround from operational deficits to solid profitability.

Operating Profit Margin

The operating profit margin paralleled the improvement in operating income. Initially, the margin was negative, worsening from -4.79% to about -7.51% across the first several quarters. Starting around late 2022, the margin began to improve, moving into positive values and escalating steadily to double-digit percentages in the final periods. By October 2025, the margin had reached approximately 13.24%, indicating enhanced operational efficiency and profitability relative to revenue.

Overall, the data illustrates a significant transformation from a period characterized by operating losses and negative margins to a stage of strong revenue growth accompanied by increasing profitability. This trend suggests effective management initiatives aimed at cost control and revenue enhancement have successfully reversed earlier losses and established a robust financial position going forward.

Revenue Trends

The revenue of the company exhibits a generally upward trajectory over the analyzed quarters. Starting at 946 million USD in October 2020, revenue steadily increased with occasional modest fluctuations, reaching a peak of 2536 million USD in October 2025. There is a consistent pattern of growth indicating expanding business operations or increased sales volume throughout the period, with few quarters showing slight decreases or plateauing, such as between July 2023 and October 2023, or between October 2025 and the subsequent quarter.

Net Income (Loss) Trends

Net income initially showed negative results, reflecting losses for the earlier periods, with a low of -145 million USD in April 2021. However, a gradual improvement is evident as losses diminish over subsequent quarters. The company transitions to positive net income starting in July 2022, achieving a notable jump to 228 million USD by July 2023. There is a significant spike in January 2024 reaching 1747 million USD, which appears anomalous compared to surrounding quarters. Following this spike, net income stabilizes at positive values in the range of 250 to 350 million USD, suggesting strengthened profitability and improved cost management or revenue quality in recent periods.

Net Profit Margin Patterns

The net profit margin began with negative values, indicating that the company was operating at a loss relative to its revenue during the initial quarters. Margins improved steadily over time, turning positive around October 2022 when it reached 0.56%. From that point, there was continuous growth in profitability metrics with the margin peaking unusually high at over 30% in January 2024. Following this peak, the profit margin settles at a lower yet strong range between approximately 11% and 33%. This reflects an overall transition from loss-making quarters to significantly profitable operations, aligned with the net income improvement trend.

Summary Insights

The analyzed data reveals a clear progression from a phase of financial losses to sustained profitability, accompanied by consistent revenue growth. The financial performance improvements suggest enhanced operational efficiency, effective revenue generation strategies, or shifts in cost structure. The isolated sharp increase in net income and profit margin around January 2024 stands out as an outlier that could be due to extraordinary income, asset sales, or accounting adjustments. Apart from this anomaly, the trends reflect a positive financial trajectory with higher net margins and growing revenues, indicating successful financial management and stronger profitability. Continued monitoring of quarterly fluctuations will be important to confirm the durability of these positive trends.

Net Income (Loss)

The net income demonstrates a significant positive trend over the observed periods. Initially, the figures indicate consistent losses, reaching a peak negative value near the beginning of the timeline. However, starting from the mid-2022 period, net income turns positive and shows strong growth, peaking notably in early 2024. Although some fluctuations occur afterwards, net income maintains a substantially higher level than in the early periods, suggesting an improving profitability trajectory.

Stockholders’ Equity

The stockholders’ equity exhibits an overall upward trend throughout the timeline. Early periods show moderate values with some volatility, including declines and recoveries. From 2023 onward, there is a marked acceleration in equity growth, nearly doubling and continuing to increase steadily towards the end of the dataset. This pattern suggests enhanced capitalization either through retained earnings, equity financing, or asset growth, contributing to strengthened financial stability.

Return on Equity (ROE)

ROE initially records substantial negative values, reflecting losses relative to equity and inefficiencies in generating returns for shareholders. The negative ROE values reach extreme levels in certain periods, indicating significant challenges in profitability. From late 2022, ROE turns positive and improves consistently, peaking in early 2024 with very strong returns. Although a downward trend follows after the peak, ROE remains positive and at moderate levels in the most recent quarters, illustrating improved but stabilizing profitability performance relative to equity.

The financial data reveals notable trends in net income, total assets, and return on assets (ROA) over the analyzed periods. Initially, the company experienced consistent net losses, with negative net income values gradually improving from -$92 million to a modest positive income of $3 million by mid-2022. From that point, net income progressively increased, peaking significantly at $1,747 million in early 2024 before stabilizing around lower but still positive values in subsequent quarters.

Total assets exhibited a steady upward trend throughout the entire timeline. Beginning at $8,727 million, total assets consistently increased each quarter, reaching approximately $23,536 million by late 2025. This growth in assets suggests ongoing expansion or investment activity underpinning the operational scale of the company.

Return on assets followed a trajectory aligned with net income improvements. Initially negative, indicating unprofitable use of assets, ROA gradually improved from -3.43% to positive territory by early 2023. Subsequently, it reached a remarkable peak of 13.65% in early 2024, coinciding with the net income surge. Although the ROA decreased somewhat after this peak, it remained positive and relatively strong, fluctuating around 4.75% to 13.42% in the later quarters.

Net Income (Loss)

Transitioned from sustained losses in 2020 and early 2021 to positive net income in mid-2022, followed by significant growth culminating in a peak in early 2024, then stabilizing at moderately high positive values.

Total Assets

Displayed continuous growth over the period analyzed, more than doubling from approximately $8.7 billion to $23.5 billion, indicating increased resource capacity and scale.

Return on Assets (ROA)

Shifted from negative ratios indicating inefficient asset utilization to robust positive returns, peaking above 13% in early 2024, and maintaining positive levels thereafter, reflecting improved profitability relative to asset base.

Overall, the data suggests a significant turnaround in profitability beginning in mid-2022, supported by a growing asset base and enhanced operational efficiency. The spike in net income and ROA in early 2024 is particularly noteworthy, indicating a period of exceptional financial performance. The sustained positive returns and asset expansion thereafter reflect a consistent capability to generate profit while managing growth.