Palo Alto Networks reported QQ3 2024 revenue of USD 1.9848 billion, up 15.3% year-over-year and flat to modestly higher quarter-over-quarter (QoQ growth of 0.5%). The gross margin remained robust at approximately 74.1%, supporting a healthy operating margin of 8.9% and a net margin of about 14.0%. The company generated strong operating cash flow (USD 528.9 million) and free cash flow (USD 491.5 million), underpinning a liquid balance sheet with net debt of roughly USD -150 million and total cash & investments of nearly USD 4.8 billion. A standout feature of the quarter is the substantial deferred revenue base (current ~ USD 5.01 billion and non-current ~ USD 5.15 billion), underscoring Palo Alto’s high-visibility recurring revenue and cloud/security solutions pipeline.
Management signaled continued emphasis on scaling cloud security offerings and platform breadth, which historically supports high customer retention and stickiness. While operating leverage has been variable given ongoing investment in R&D and go-to-market initiatives, the company’s trajectory remains solid with strong free cash flow generation, improving QoQ profitability, and a robust balance sheet. Looking ahead, the key questions for investors center on ARR growth, product mix contribution (on-prem vs. cloud), churn in the large enterprise segment, and how much profitability is re‑invested to sustain growth in a competitive cybersecurity landscape.