Palo Alto Networks Inc (PANW)
Interest coverage
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,005,700 | 1,321,500 | 1,263,200 | 1,075,000 | 990,200 | 989,900 | 876,000 | 828,400 | 583,300 | 290,200 | 105,700 | -59,700 | -185,200 | -268,500 | -333,600 | -348,600 | -305,800 | -261,900 | -199,500 | -150,800 |
| Interest expense (ttm) | US$ in thousands | 3,000 | 3,100 | 4,700 | 6,600 | 8,300 | 13,700 | 19,200 | 23,300 | 27,200 | 28,400 | 27,400 | 27,300 | 27,400 | 61,900 | 96,100 | 130,000 | 163,300 | 153,300 | 131,700 | 110,000 |
| Interest coverage | 335.23 | 426.29 | 268.77 | 162.88 | 119.30 | 72.26 | 45.62 | 35.55 | 21.44 | 10.22 | 3.86 | -2.19 | -6.76 | -4.34 | -3.47 | -2.68 | -1.87 | -1.71 | -1.51 | -1.37 |
July 31, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,005,700K ÷ $3,000K
= 335.23
The analysis of Palo Alto Networks Inc.'s interest coverage ratios over the specified periods indicates a significant transition from negative to strongly positive levels. Prior to January 2023, the interest coverage ratios were negative, reflecting that the company's earnings before interest and taxes (EBIT) were insufficient to cover its interest expenses, thereby signaling potential financial distress or periods of operational losses. Specifically, from October 2020 through October 2022, the ratios ranged from -1.37 to -6.76, demonstrating deteriorating coverage and raising concerns about the company's ability to meet its interest obligations during that period.
Starting January 2023, a notable turnaround occurs as the ratios shift into positive territory, beginning with 3.86 and climbing progressively to exceptional levels, reaching 426.29 by April 2025. This dramatic improvement suggests a substantial enhancement in operational profitability and earnings capacity relative to interest expenses. The escalating trend in interest coverage ratios indicates a strengthening of financial stability and a reduced risk of default on interest payments.
Overall, the progression from negative to very high positive ratios reflects a robust recovery and an improved ability of Palo Alto Networks Inc. to service its debt obligations efficiently, with projections pointing toward sustained financial resilience in the foreseeable future.