Palo Alto Networks (PANW.NE) delivered solid Q3 2025 results, underscoring continued demand for its cybersecurity platform. Revenue reached USD 2.289 billion, up 15.3% year over year (YoY) and 1.4% quarter over quarter (QoQ), with a gross margin of 72.9% and an operating margin of 9.56%. The company reported an EBITDA of USD 399.3 million and a net income of USD 262.1 million, corresponding to a 11.45% net margin and diluted earnings per share (EPS) of USD 0.37. Free cash flow (FCF) was USD 560.4 million, driving a robust cash conversion profile and leaving the balance sheet with a net cash position (net debt negative USD 1.578 billion). Cash at period-end stood at USD 2.395 billion, with total debt of USD 806 million and a strong interest coverage (~312.6x).
The quarterly performance reflects disciplined cost management alongside continued investments in R&D and go-to-market execution. The company’s FCF generation and strong cash balance support ongoing platform expansion (security operations, cloud security, threat intelligence) and potential upsell opportunities within Palo Alto Networks’ deployed base. Operational metrics show a healthy but leverageable balance sheet with a current ratio of 0.895x, reflecting a cash-heavy balance sheet relative to short-term liabilities, and a relatively long days sales outstanding (DSO) around 105.7 days, which is typical for enterprise software ecosystems with subscription models.
Looking ahead, management did not publish explicit quarterly guidance in the provided data. Nonetheless, the thesis remains that PANW.NE sits in a high-growth, high-value cybersecurity market with strong ARR potential, defensible margins, and meaningful cross-sell opportunities across firewall, cloud, and security operations. Investors should monitor renewal rates, ARR growth, product mix (on-prem versus cloud offerings), pipeline execution, and any shifts in enterprise IT budgeting that could affect mid-term revenue trajectory and free cash flow conversion.