Palo Alto Networks Inc (PANW)
Return on equity (ROE)
| 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 stockholders’ equity | US$ in thousands | 7,824,400 | 5,169,700 | 1,748,400 | 210,000 | 763,600 |
| ROE | 14.49% | 49.86% | 25.15% | -127.14% | -65.34% |
July 31, 2025 calculation
ROE = Net income ÷ Total stockholders’ equity
= $1,133,900K ÷ $7,824,400K
= 14.49%
The analysis of Palo Alto Networks Inc.'s return on equity (ROE) over the specified period reveals a significant transformation in profitability and shareholder returns. As of July 31, 2021, the company exhibited a markedly negative ROE of -65.34%, indicating substantial losses relative to shareholders' equity. This negative performance persisted and worsened by July 31, 2022, with ROE declining further to -127.14%, reflecting escalating losses or diminished equity contributions.
However, a noteworthy turnaround is observed by July 31, 2023, when the ROE improves dramatically to 25.15%. This shift from negative to positive territory suggests a significant enhancement in net income relative to shareholders' equity, possibly driven by operational improvements, increased revenues, cost controls, or restructuring initiatives. The positive ROE continues to strengthen in the subsequent year, reaching 49.86% by July 31, 2024, which indicates a period of robust profitability and efficient utilization of equity capital.
By July 31, 2025, the ROE partially declines to 14.49%. Although still positive, this reduction may reflect factors such as increased equity base, changes in net income margins, or strategic adjustments that impacted overall profitability. Overall, the trend from a highly negative ROE to a strong positive figure highlights a remarkable recovery phase for Palo Alto Networks Inc., positioning the company as more effective in generating returns on shareholders' investments in recent years.