Palo Alto Networks Inc (PANW)
Operating return on assets (Operating ROA)
| Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | ||
|---|---|---|---|---|---|---|
| Operating income | US$ in thousands | 1,133,200 | 683,900 | 387,300 | -188,800 | -304,100 |
| Total assets | US$ in thousands | 23,576,200 | 19,990,900 | 14,501,100 | 12,253,600 | 10,241,600 |
| Operating ROA | 4.81% | 3.42% | 2.67% | -1.54% | -2.97% |
July 31, 2025 calculation
Operating ROA = Operating income ÷ Total assets
= $1,133,200K ÷ $23,576,200K
= 4.81%
Analysis of Palo Alto Networks Inc.'s operating return on assets (operating ROA) indicates a notable improvement over the observed period from July 31, 2021, to July 31, 2025. In the fiscal year ending July 31, 2021, the company exhibited a negative operating ROA of approximately -2.97%, reflecting that operating income was insufficient to generate positive returns relative to total assets during that period. This negative figure suggests operational challenges or investment phases with limited profitability.
By the subsequent fiscal year ending July 31, 2022, the operating ROA remained negative but improved substantially to approximately -1.54%. Although still below zero, this demonstrates a narrowing of losses and potential initiating signs of operational recovery or increased efficiency. The positive shift in 2022 can be interpreted as a strategic or operational turnaround beginning to take effect.
The trend continued positively into the year ending July 31, 2023, with the operating ROA reaching approximately 2.67%, crossing the threshold into profitability. This transition signifies that the company's core operations, relative to its asset base, began generating net operating income that more than offset asset costs, marking a critical milestone in its financial performance.
Further improvement was observed in the fiscal year ending July 31, 2024, with the operating ROA increasing to approximately 3.42%, indicating an enhanced efficiency and ongoing operational strengthening. The most recent data, for the fiscal year ending July 31, 2025, shows a continued upward trajectory with an operating ROA of roughly 4.81%. This sustained growth underscores consistent operational improvements and effective asset utilization, leading to higher profitability margins derived from operating activities.
In sum, the transition from negative to positive operating ROA over the analyzed period signifies a substantial shift in Palo Alto Networks Inc.'s operational health. The pattern suggests phased improvement in operational efficiency, profitability, and possibly strategic initiatives aimed at optimizing asset use. As of the most recent fiscal year, the positive operating ROA indicates the company has achieved a robust operating position relative to its asset base, reflecting enhanced profitability and operational performance.