Palo Alto Networks Inc (0KF5.L) Q2 2025 Earnings Report

Palo Alto Networks delivered solid top-line growth in QQ2 2025, with revenue of $2.2574 billion, up 14.3% year over year and 5.6% quarter over quarter. The gross margin remained robust at approximately 73.46%, supporting an operating margin near 10.65% and an EBITDA margin of about 18.3%. Net income was $267.3 million, translating to a net margin of roughly 11.8% and basic earnings per share of $0.41. The company generated strong operating cash flow of $556.9 million and free cash flow of $509.4 million, underpinning a healthy liquidity position as cash and equivalents plus short-term investments stood at about $3.233 billion at quarter end. The balance sheet shows limited leverage with a total debt load of $896.8 million and net cash position of roughly $1.329 billion, alongside a substantial deferred revenue base (current and non-current combined of about $11.26 billion) that underscores a durable, subscription-driven revenue model and robust renewal dynamics. Valuation remains rich, with price-to-sales around 54.8x and P/E near 116x, reflecting elevated growth expectations for a leading cybersecurity software provider. Given the absence of formal forward guidance in the provided data, the outlook hinges on continued demand for enterprise security, higher-margin software services, and the company’s ability to scale operating leverage as revenue expands. Investors should monitor ARR/renewal trends, product mix (especially cloud and security analytics offerings), and any shifts in competitive dynamics that could influence pricing and growth velocity. Overall, the QQ2 2025 results reinforce Palo Alto Networks’ position as a cash-generative, subscription-centric cybersecurity leader, but the stock’s rich multiples warrant a disciplined, longer‑term view on growth sustainability and margin expansion potential.