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03Detailed Report
PANW.NE
Company PANW.NE
Period
Q2 2025
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 24, 2026
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Executive Summary
Palo Alto Networks reported a solid QQ2 2025 with revenue of $2.2574 billion, up 14.3% year-over-year and 5.6% quarter-over-quarter, reflecting continued demand for its enterprise cybersecurity platform. Gross margin stood at approximately 73.5%, and operating margin was 10.65%, with net income of $267.3 million and diluted EPS of $0.38. The results demonstrate durable top-line growth driven by a strong subscription mix and expanding cloud/security offerings, but profitability metrics indicate ongoing investment in R&D and go-to-market capacity that compress near-term margins as the company fuels product development and scale.
Key Performance Indicators
Revenue
Increasing
2.26B
QoQ: 5.55% | YoY: 14.29%
Gross Profit
Increasing
1.66B
73.46% margin
QoQ: 4.64% | YoY: 12.34%
Operating Income
Increasing
240.40M
QoQ: -16.09% | YoY: 4.34%
Net Income
Decreasing
267.30M
QoQ: -23.78% | YoY: -84.70%
EPS
Decreasing
0.41
QoQ: -23.36% | YoY: -85.01%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue: $2,257.4M; YoY +14.29%; QoQ +5.55%. Gross Profit: $1,658.2M; Gross Margin: 73.46%; YoY Gross Margin up slightly vs prior year. Operating Income: $240.4M; Operating Margin: 10.65%; Net Income: $267.3M; Net Margin: 11.84%; EBITDA: $413.0M; EBITDA Margin: 18.30%. Earnings per Share (diluted): $0.38; EPS (GAAP): $0.41. Cash Flow: Operating Cash Flow $556.9M; Free Cash Flow $509.4M; Capex $47.5M; Free Cash Flow Margin ~22.6% of revenue. Balance Sheet: Cash & Equivalents $2.226B; Short-Term Investments $1.007B; Total Debt $0.897B; Net Debt position: -$1.33B (net cash). Deferred Revenue: $5.60B (indicative of durable ARR). Current Assets $6.34B; Total Assets $20.95B; Total Liabilities $14.58B; Equity $6.38B. Liquidity/Leverage: Current Ratio 0.839; Quick Ratio 0.839; Debt to Capitalization 12.3%; EV/FCF ~238x; P/E ~114x; P/S ~53.9x; Dividend Yield 0%.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
2.26B
14.29%
5.55%
Gross Profit
1.66B
12.34%
4.64%
Operating Income
240.40M
4.34%
-16.09%
Net Income
267.30M
-84.70%
-23.78%
EPS
0.41
-85.01%
-23.36%
Key Financial Ratios
Gross Profit Margin
Excellent
73.50%
Gross profit margin is exceptional, indicating strong pricing power and operational efficiency
Operating Profit Margin
Fair
10.60%
Operating margin is moderate, room for improvement in cost management
Net Profit Margin
Good
11.80%
Net profit margin is healthy and competitive within industry standards
Return on Assets
Weak
1.28%
Return on assets suggests inefficient capital allocation
Return on Equity
Weak
4.19%
Return on equity suggests inefficient capital allocation
Current Ratio
Concern
0.84
Current ratio below safe levels, potential liquidity risk
Debt to Equity
Conservative
0.14
Debt-to-equity shows conservative leverage and low financial risk
P/E Ratio
High Growth
113.72x
Very high P/E indicates aggressive growth expectations, higher risk
Price to Book
High Premium
19.07x
Very high premium suggests asset-light business model or lofty expectations
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