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 gross profit margin exhibited a generally stable pattern over the analyzed period, spanning from October 2020 to July 2025. While fluctuations occurred, the metric largely remained within a relatively narrow range, indicating consistent production efficiency and pricing strategies. An initial slight decline is observed in the early part of the period, followed by a period of relative stability, and then a noticeable upward trend.

Initial Period (Oct 31, 2020 – Apr 30, 2021)

The gross profit margin began at 70.42% and experienced a modest decrease to 69.74% over this timeframe. This suggests a potential initial impact from changing costs of goods sold or pricing pressures, though the decline was minimal.

Stabilization and Slight Decline (Jul 31, 2021 – Jul 31, 2022)

Following the initial decline, the gross profit margin stabilized around the 69-70% range for several quarters, with a slight dip to 68.76% observed in July 2022. This period indicates a consistent cost structure and pricing environment, despite a minor fluctuation.

Upward Trend (Oct 31, 2022 – Apr 30, 2023)

A clear upward trend in the gross profit margin is evident, increasing from 69.06% to 72.29% over this period. This improvement suggests enhanced operational efficiency, potentially through cost reductions in production or increased pricing power. The margin reached its highest point at 72.29% in April 2023.

Peak and Subsequent Moderation (Jul 31, 2023 – Jul 31, 2025)

After peaking in April 2023, the gross profit margin experienced a slight moderation, fluctuating between 73.35% and 73.47% over the remaining quarters. While remaining at a high level, the stabilization suggests that the factors driving the earlier improvements may have reached a plateau. The final reported value for July 2025 is 73.41%.

Overall, the gross profit margin demonstrates a resilient performance with a positive trajectory in the latter half of the analyzed period. The company appears to have effectively managed its cost of goods sold and pricing strategies, resulting in sustained profitability. The recent stabilization at a higher margin suggests a strong underlying business model and efficient operations.

The operating profit margin exhibited a significant and consistent upward trend over the observed period. Initially negative, the margin transitioned to positive values and demonstrated increasing profitability.

Initial Period (Oct 31, 2020 – Jul 31, 2022)

From October 2020 through July 2022, the operating profit margin remained negative, ranging from -7.51% to -4.79%. The margin consistently declined during this timeframe, reaching its lowest point at -7.51% in October 2021. While still negative, the rate of decline slowed between January 2022 and July 2022.

Transition to Profitability (Oct 31, 2022 – Apr 30, 2023)

A turning point occurred in October 2022, with the operating profit margin becoming positive at 0.37%. This positive trend continued, with the margin increasing to 2.30% by April 2023. This period represents a substantial improvement in operational efficiency and profitability.

Accelerated Growth (Jul 31, 2023 – Apr 30, 2025)

From July 2023 through April 2025, the operating profit margin experienced accelerated growth. It rose from 5.62% to 13.48%, demonstrating a significant enhancement in the company’s ability to generate profit from its core operations. The rate of increase was particularly notable between July 2024 and April 2025.

Overall Trend

The overall trend indicates a dramatic shift from operating losses to substantial profitability. The operating profit margin increased from negative values to over 13% within a three-year period. This suggests successful implementation of cost control measures, revenue growth strategies, or a combination of both. The most recent values indicate a consistently strong and improving operational performance.

The progression from negative to positive and then rapidly increasing operating profit margins suggests a successful strategic turnaround or a period of significant operational improvement.

The net profit margin exhibited significant fluctuations over the observed period. Initially, the company experienced negative net profit margins, transitioning to positive values and subsequently demonstrating substantial growth before stabilizing and then declining again.

Initial Negative Margins (Oct 31, 2020 – Jul 31, 2022)

From October 2020 through July 2022, the net profit margin remained negative, ranging from -11.72% to -8.36%. The margin consistently improved, becoming less negative, indicating a reduction in net losses over this timeframe. However, profitability remained elusive during this period.

Transition to Profitability (Oct 31, 2022 – Jul 31, 2023)

A turning point occurred in October 2022, with the net profit margin becoming positive at 0.56%. This positive trend continued, with the margin increasing to 3.32% in April 2023 and reaching 6.38% in July 2023. This period signifies a successful shift towards profitability.

Peak Profitability and Subsequent Decline (Oct 31, 2023 – Jul 31, 2025)

The net profit margin peaked at 30.24% in January 2024, representing a substantial increase from prior periods. This was followed by a period of high, but gradually decreasing, profitability. The margin remained above 12% through July 2025, but showed a clear downward trend from the peak, ending at 11.69%.

Overall Trend

The overall trend demonstrates a dramatic improvement in profitability, moving from consistent losses to substantial gains. However, the most recent observations suggest a potential stabilization or moderate decline in the net profit margin, warranting further investigation to determine the underlying causes and potential implications.

The magnitude of the changes in net profit margin is noteworthy, particularly the rapid increase observed between January 2023 and January 2024. This suggests significant operational improvements or external factors positively impacting the company’s financial performance during that period.

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.