Palo Alto Networks Inc (PANW)

Operating profit margin

		Jul 31, 2024	Apr 30, 2024	Jan 31, 2024	Oct 31, 2023	Jul 31, 2023	Apr 30, 2023	Jan 31, 2023	Oct 31, 2022	Jul 31, 2022	Apr 30, 2022	Jan 31, 2022	Oct 31, 2021	Jul 31, 2021	Apr 30, 2021	Jan 31, 2021	Oct 31, 2020	Jul 31, 2020	Apr 30, 2020	Jan 31, 2020	Oct 31, 2019
Operating income (ttm)	US$ in thousands	683,900	699,000	601,000	587,300	387,300	149,200	22,900	-90,900	-188,800	-264,600	-327,400	-342,300	-304,100	-261,500	-207,600	-171,700	-179,000	-171,100	-133,300	-73,800
Revenue (ttm)	US$ in thousands	8,027,700	7,777,700	7,501,800	7,176,900	6,857,600	6,458,200	6,127,200	5,796,400	5,475,900	5,105,500	4,757,600	4,420,000	4,087,400	3,831,400	3,649,600	3,472,400	3,317,900	3,184,700	3,040,400	2,934,500
Operating profit margin		8.52%	8.99%	8.01%	8.18%	5.65%	2.31%	0.37%	-1.57%	-3.45%	-5.18%	-6.88%	-7.74%	-7.44%	-6.83%	-5.69%	-4.94%	-5.39%	-5.37%	-4.38%	-2.51%

July 31, 2024 calculation

Operating profit margin = Operating income (ttm) ÷ Revenue (ttm)
= $683,900K ÷ $8,027,700K
= 8.52%

Operating profit margin is a key efficiency ratio that reflects a company's ability to generate profit from its core operations. In the case of Palo Alto Networks Inc, the operating profit margin has shown a fluctuating trend over the past several quarters.

From October 2019 to April 2020, the company experienced negative operating profit margins, indicating that its operating expenses were exceeding its operating income. Subsequently, from July 2020 to April 2023, there was a gradual improvement in the operating profit margin, signaling better cost management and a more efficient operation.

However, there was a significant jump in the operating profit margin from 2.31% in April 2023 to 5.65% in July 2023, followed by further increases in subsequent quarters, reaching its peak at 8.99% in April 2024. This improvement suggests that Palo Alto Networks Inc has been able to increase its profitability relative to its revenue, potentially through revenue growth, cost reduction measures, or a combination of both.

It is worth noting that, despite some fluctuations, the company has managed to maintain positive operating profit margins in recent quarters, indicating a relatively healthy financial performance. Continued monitoring of this metric will be necessary to assess the sustainability and further improvements in the company's operational efficiency.