Palo Alto Networks Inc (PANW)
Return on assets (ROA)
| Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 1,133,900 | 2,577,600 | 439,700 | -267,000 | -498,900 |
| Total assets | US$ in thousands | 23,576,200 | 19,990,900 | 14,501,100 | 12,253,600 | 10,241,600 |
| ROA | 4.81% | 12.89% | 3.03% | -2.18% | -4.87% |
July 31, 2025 calculation
ROA = Net income ÷ Total assets
= $1,133,900K ÷ $23,576,200K
= 4.81%
The return on assets (ROA) of Palo Alto Networks Inc. demonstrates a notable trend over the specified period. As of July 31, 2021, the company reported a negative ROA of -4.87%, indicating an inefficiency in generating profits from its asset base and potentially reflecting operating challenges or high expenses relative to assets.
By July 31, 2022, the ROA improved to -2.18%, suggesting a reduction in negative profitability, possibly due to operational improvements or cost management strategies that mitigated losses relative to assets. This upward movement continued, with the ROA turning positive by July 31, 2023, reaching 3.03%, which signifies that the company began generating net income relative to its assets, signaling a shift towards operational efficiency and potential profitability.
The most significant development is observed by July 31, 2024, when ROA surged to 12.89%, reflecting a substantial increase in net income relative to total assets. This sharp rise indicates a period of enhanced profitability, possibly driven by revenue growth, margin expansion, or improved asset utilization. Such a high ROA level suggests optimal operational performance and effective asset management during this period.
By July 31, 2025, the ROA decreased to 4.81%, indicating a reduction from the peak it reached the previous year. While still positive and indicative of profitability, this decline could point to a normalization after the peak efficiency or the impact of increased asset levels, investment activities, or other operational factors affecting net income relative to assets.
Overall, Palo Alto Networks Inc.'s ROA over the analyzed timeframe illustrates a transition from negative to positive territory, with a period of significant profitability demonstrated in 2024. The fluctuations highlight the company's evolving efficiency in generating profit from its asset base and underscore the importance of ongoing operational and strategic management to sustain or enhance this performance.