Palo Alto Networks key statistics and ratios

In fiscal 2026, Palo Alto Networks had return on equity of 1.7%, an operating margin of 6.1%, debt equal to 6.5% of equity and a current ratio of 0.87. Each ratio below is calculated from the figures on its income statement, balance sheet and cash flow pages.

Financial ratios

US$ thousands unless shown otherwise. Fiscal years, plus the last twelve months (LTM) when newer.

Palo Alto Networks: financial ratios, annual
Fiscal year	2011Jul 2011	2012Jul 2012	2013Jul 2013	2014Jul 2014	2015Jul 2015	2016Jul 2016	2017Jul 2017	2018Jul 2018	2019Jul 2019	2020Jul 2020	2021Jul 2021	2022Jul 2022	2023Jul 2023	2024Jul 2024	2025Jul 2025	2026Jul 2026
Gross margin	72.8%	72.3%	72.3%	73.3%	72.9%	73.2%	72.6%	71.6%	72.1%	70.7%	70.0%	68.8%	72.3%	74.3%	73.4%	70.4%
Operating margin	−8.8%	1.5%	−4.7%	−36.0%	−10.8%	−11.4%	−9.4%	−4.6%	−1.9%	−5.3%	−7.1%	−3.4%	5.6%	8.5%	13.5%	6.1%
Net margin	−10.6%	0.3%	−7.4%	−37.9%	−14.1%	−14.0%	−11.5%	−5.4%	−2.8%	−7.8%	−11.7%	−4.9%	6.4%	32.1%	12.3%	2.7%
Free-cash-flow margin	16.1%	24.6%	23.2%	8.7%	34.4%	42.5%	40.0%	40.7%	31.9%	24.1%	32.6%	32.6%	38.2%	38.6%	37.6%	35.8%
Return on equity	—	0.9%	−11.7%	−61.1%	−27.5%	−27.9%	−24.5%	−12.7%	−6.0%	−19.9%	−57.5%	−63.2%	44.9%	74.5%	17.5%	1.7%
Return on assets	—	0.2%	−5.9%	−21.9%	−7.6%	−8.0%	−6.4%	−2.6%	−1.3%	−3.4%	−5.2%	−2.4%	3.3%	14.9%	5.2%	0.9%
Asset turnover	—	0.63	0.80	0.58	0.54	0.57	0.56	0.48	0.46	0.44	0.44	0.49	0.52	0.47	0.42	0.32
Current ratio	—	3.13	2.57	2.75	1.04	2.09	1.65	1.97	1.78	1.91	0.91	0.77	0.78	0.89	0.94	0.87
Debt to equity	—	0.0%	0.0%	122.7%	117.9%	64.3%	75.7%	195.5%	106.7%	335.2%	581.9%	>999%	114.4%	—	0.0%	6.5%
Interest cover (operating income ÷ interest)	—	108.1x	n/m	n/m	n/m	n/m	n/m	n/m	n/m	n/m	n/m	n/m	14.2x	82.4x	—	—
Effective tax rate	—	73.7%	—	—	—	—	—	—	—	—	—	—	22.4%	—	28.9%	42.7%
R&D as % of revenue	18.0%	15.1%	15.8%	17.5%	20.0%	20.6%	19.7%	17.6%	18.6%	22.5%	26.8%	25.8%	23.3%	22.5%	21.5%	22.2%
Capital spending as % of revenue	11.0%	5.7%	5.7%	6.0%	3.6%	5.3%	9.3%	4.9%	4.5%	6.3%	2.7%	3.5%	2.1%	2.0%	2.7%	3.8%
Free cash flow ÷ net income	—	>999%	—	—	—	—	—	—	—	—	—	—	598.4%	120.3%	305.9%	>999%
Dividends and buybacks ÷ free cash flow	0.5%	0.1%	0.1%	0.3%	0.0%	0.0%	58.3%	28.0%	35.7%	145.9%	84.9%	49.8%	10.4%	18.3%	0.0%	24.3%

US$ thousands unless shown otherwise. Fiscal quarters.

Palo Alto Networks: financial ratios, quarterly
Quarter	2025 Q1Oct 2024	2025 Q2Jan 2025	2025 Q3Apr 2025	2025 Q4Jul 2025	2026 Q1Oct 2025	2026 Q2Jan 2026	2026 Q3Apr 2026	2026 Q4Jul 2026
Gross margin	74.1%	73.5%	73.0%	73.2%	74.2%	73.6%	67.6%	67.6%
Operating margin	13.4%	10.7%	9.6%	19.6%	12.5%	15.3%	−6.1%	5.0%
Net margin	16.4%	11.8%	11.4%	10.0%	13.5%	16.7%	−5.9%	−8.3%
Free-cash-flow margin	68.5%	22.6%	24.5%	36.8%	68.2%	14.8%	26.2%	36.8%
Current ratio	0.84	0.84	0.90	0.94	0.99	1.04	0.86	0.87
R&D as % of revenue	22.5%	22.4%	21.6%	19.9%	21.3%	19.7%	24.5%	22.8%

Returns use average equity or assets over the year. Return on equity is left blank when equity is negative or so small that the ratio says nothing (above ±200%); interest cover is left blank above 200 times. Price-based ratios such as P/E are on the valuation page.

Financial health

0 of 2 checks passed · July 31, 2026

What it owns · $48.5bn

Short-term assets $8.6bnLonger-term assets $39.8bn

What it owes, and who funded it · $48.5bn

Short-term liabilities $9.9bnLonger-term liabilities $11.0bnShareholders' equity $27.5bn

Short-term assets cover short-term liabilities $8.6bn of assets due within a year against $9.9bn of liabilities due within a year.
Short-term assets cover long-term liabilities $8.6bn short-term assets against $11.0bn of longer-dated liabilities.
More cash than debt Cash or debt not separately reported. Not assessable.
Debt below 40% of shareholders' equity Equity or debt not reported. Not assessable.
Debt burden no higher than five years ago Five-year comparison not available. Not assessable.
A year's operating cash flow covers at least 20% of debt Cash flow or debt not reported. Not assessable.
Operating profit covers interest at least five times over Interest not separately reported. Not assessable.

From Palo Alto Networks's latest balance sheet as filed. Checks are fixed, documented rules (methodology), counted only where the company reports the figures — a dot means the filing doesn't break the item out. Descriptions of reported data, not advice.

Moat

65 /100

Moderate moat

How hard Palo Alto Networks's competitive advantage looks for rivals to wear away, judged from 10 years of its own filings: returns on capital, pricing power, profit durability, cash conversion and discipline.

Returns on capital 20 / 20

Cash operating profit has been a median 18.1% of total assets over 10 years.
Pricing power 20 / 20

Gross margin has been a median 71.9%, moving by 1.6 percentage points (standard deviation) across 10 years.
Durability 10 / 20

Operating margin has been a median -2.6%; its worst year was -10.2%.
Cash conversion 20 / 20

Free cash flow was positive in 10 of 10 years, at a median 36.7% of revenue.
Discipline 0 / 20

The diluted share count rose 38.9% over five years; stock-based pay has been a median 18.9% of revenue.

AI disruption exposure: Medium. In this industry, AI could change how the product is made or sold, without replacing the core asset. The score above includes a 5-point deduction for that exposure (70 before it).

A rules-based reading of reported figures, not a forecast and not investment advice. How the score is built: methodology.

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Figures from Palo Alto Networks's SEC filings (10-K and 10-Q), retrieved October 20, 2026. How we read and check them: methodology and data sources. Not investment advice. Back to Palo Alto Networks.