Palo Alto Networks Inc (PANW)
Interest coverage
| Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | — | 993,100 | 586,800 | -187,000 | -307,000 |
| Interest expense | US$ in thousands | 3,000 | 8,300 | 27,200 | 27,400 | 163,300 |
| Interest coverage | 0.00 | 119.65 | 21.57 | -6.82 | -1.88 |
July 31, 2025 calculation
Interest coverage = EBIT ÷ Interest expense
= $—K ÷ $3,000K
= 0.00
The interest coverage ratio for Palo Alto Networks Inc. has exhibited significant variations over the specified periods. As of July 31, 2021, the company faced a negative interest coverage ratio of -1.88, indicating that its earnings before interest and taxes (EBIT) were insufficient to cover interest expenses, reflecting potential financial strain or low profitability during that period.
In the subsequent year, ending July 31, 2022, the company's interest coverage deteriorated further to -6.82, suggesting a continued or worsening inability to meet interest obligations solely from operational earnings. This negative trend indicates that the company's profitability was highly insufficient to cover interest expenses, potentially signaling heightened financial risk or operational challenges.
By July 31, 2023, the interest coverage ratio shifted dramatically to 21.57, signifying a substantial improvement. This positive ratio indicates that the company's earnings adequately covered interest expenses, suggesting a strong financial position and improved profitability relative to interest obligations.
Looking ahead, projections for July 31, 2024, show an extraordinary increase in the interest coverage ratio to 119.65. Such a high ratio implies that the company's earnings are expected to far exceed interest expenses, potentially due to significant earnings growth or reduced interest obligations, reflecting a robust financial position.
However, the data for July 31, 2025, indicates a ratio of 0.00, which may suggest that the company anticipates a scenario where earnings are insufficient to cover interest expenses, or possibly that there are no interest expenses or earnings reported for that period, raising questions about future profitability or debt management strategies.
Overall, the trend reveals a period of financial distress in the 2021-2022 timeframe, followed by a marked turnaround in 2023, with expectations of continued strong earnings relative to interest obligations in 2024, and potentially challenging conditions or changes in financial structure by 2025.