Palo Alto Networks Inc (PANW)
Profitability ratios
Return on sales
| Jul 31, 2025 | Apr 30, 2025 | Jan 31, 2025 | Oct 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross profit margin | 73.41% | 73.56% | 73.86% | 74.17% | 74.35% | 74.43% | 74.05% | 73.35% | 72.29% | 70.80% | 69.77% | 69.06% | 68.76% | 69.34% | 69.63% | 69.77% | 70.05% | 69.74% | 70.02% | 70.42% |
| Operating profit margin | 11.94% | 11.09% | 10.99% | 9.11% | 8.52% | 8.97% | 7.98% | 8.15% | 5.62% | 2.30% | 0.37% | -1.56% | -3.43% | -5.12% | -6.74% | -7.51% | -7.15% | -6.56% | -5.49% | -4.79% |
| Pretax margin | 17.30% | 14.91% | 14.74% | 12.96% | 12.31% | 12.65% | 11.50% | 11.30% | 8.22% | 4.12% | 1.36% | -1.40% | -3.77% | -6.32% | -8.74% | -10.40% | -10.93% | -10.31% | -8.68% | -7.25% |
| Net profit margin | 12.30% | 13.95% | 14.64% | 32.99% | 32.11% | 31.41% | 30.24% | 8.52% | 6.38% | 3.32% | 0.56% | -2.46% | -4.85% | -7.54% | -9.50% | -11.20% | -11.72% | -11.00% | -9.73% | -8.36% |
The profitability ratios of Palo Alto Networks Inc. over the specified period reveal significant insights into the company’s financial performance.
Gross Profit Margin: The gross profit margin demonstrates a consistent upward trend, increasing from approximately 70.42% as of October 2020 to approximately 73.86% in January 2025. This steady improvement indicates the company's enhanced ability to manage cost of goods sold relative to sales, reflecting either better pricing strategies, cost efficiencies, or product mix improvements that favor higher-margin offerings. The margin's upward trajectory suggests ongoing operational efficiencies or a shift toward more profitable products or services.
Operating Profit Margin: The operating profit margin initially was negative throughout the period, reflecting operating losses, with values declining from -4.79% in October 2020 to as low as -7.51% in October 2021. However, a turning point occurs around the end of 2022, where margins transition into positive territory. From January 2023 onwards, there is a clear upward trajectory, reaching approximately 11.94% by July 2025. This positive shift indicates improved operational control, increased revenues, or cost management, resulting in the company moving toward profitability and expanding its operating efficiency.
Pre-tax Margin: Similar to the operating margin, the pre-tax margin shows a transition from negative to positive territory around January 2023. It progresses from approximately -7.25% in October 2020 to roughly 17.30% as of July 2025. The consistent improvement reflects not only operational efficiencies but also better management of non-operating costs and one-time items, leading to enhancing profitability before taxes.
Net Profit Margin: The net profit margin underlines a more dramatic turnaround. It was negative during the earlier period, with losses around -8.36% in October 2020 and as deep as -11.72% in July 2021. Notably, from January 2023 onwards, the net margin becomes positive, reaching approximately 32.11% in July 2024, before slightly declining to around 12.30% by July 2025. The substantial revision from losses to significant profits illustrates improved net income generation, successful cost controls, and possibly favorable tax treatments or extraordinary gains.
Overall, the ratio analysis indicates that Palo Alto Networks Inc. transitioned from a period of operational loss in the early years to sustained profitability. The continuous increase in gross profit margin alongside turning positive operating, pre-tax, and net margins highlights effective strategic changes, operational improvements, and possibly favorable market conditions, all culminating in a considerably stronger profitability position by mid-2025.
Return on investment
| Jul 31, 2025 | Apr 30, 2025 | Jan 31, 2025 | Oct 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 4.67% | 4.47% | 4.50% | 3.71% | 3.42% | 3.90% | 3.29% | 3.97% | 2.67% | 1.05% | 0.17% | -0.72% | -1.54% | -2.38% | -3.15% | -3.28% | -2.97% | -2.73% | -2.19% | -1.97% |
| Return on assets (ROA) | 4.81% | 5.63% | 5.99% | 13.42% | 12.89% | 13.65% | 12.45% | 4.15% | 3.03% | 1.52% | 0.26% | -1.14% | -2.18% | -3.51% | -4.44% | -4.89% | -4.87% | -4.59% | -3.88% | -3.43% |
| Return on total capital | 12.85% | 18.28% | 19.81% | 18.18% | 19.15% | 22.16% | 20.10% | 38.17% | 33.36% | 23.55% | 14.50% | -11.75% | -88.19% | -79.53% | -283.19% | -67.18% | -40.05% | -26.26% | -16.65% | -20.19% |
| Return on equity (ROE) | 14.49% | 17.12% | 19.68% | 46.25% | 49.86% | 54.78% | 52.25% | 28.28% | 25.15% | 17.47% | 4.71% | -28.23% | -127.14% | -115.40% | -391.77% | -98.34% | -65.34% | -43.97% | -30.72% | -40.11% |
The profitability ratios of Palo Alto Networks Inc. from October 2020 through July 2025 demonstrate significant improvement over the observed period. Initially, the company exhibited negative operating return on assets (Operating ROA), operating ROA, return on assets (ROA), and return on equity (ROE), indicating unprofitable operations. For example, as of October 2020, the Operating ROA was -1.97%, and the ROE stood at -40.11%, reflecting substantial losses and inefficient utilization of assets and shareholder equity.
However, a marked turnaround is evident beginning in early 2023. The Operating ROA progressed from negative territory to positive levels, reaching 3.97% by October 2023, with subsequent periods sustaining and slightly improving this trend. Similarly, ROA shifted from -1.14% in October 2022 to 4.15% in October 2023 and climbed further to approximately 13.42% in the period ending October 2024, signifying enhanced efficiency in generating profits from assets.
The Return on Total Capital exhibited a volatility pattern earlier, with severe negative values such as -283.19% in January 2022, indicating heavy losses relative to total capital. Nonetheless, starting from January 2023, positive figures emerged—14.50% in January 2023 and peaking at 38.17% in October 2023—demonstrating effective capital utilization and profitability.
Return on Equity (ROE), which measures profitability relative to shareholders’ investment, displayed an equally dramatic improvement. After considerable negative values, notably -391.77% in January 2022, PRoe returned to positive figures in 2023, reaching approximately 28.28% in October 2023 and maintaining elevated levels into early 2024. This trend suggests that the company's net income attributable to shareholders has recovered significantly, indicating a positive earnings trajectory.
Overall, the data reflect a phased recovery from periods of losses and negative profitability ratios to consistent positive profitability metrics starting in early 2023 and continuing through 2025. This trend points to the company's effective strategic and operational improvements, leading to more efficient asset utilization, higher return on capital, and substantial gains on shareholders’ equity in recent periods.
See also:
Palo Alto Networks Inc Profitability Ratios (Quarterly Data)