$PANW

Palo Alto Networks Inc

CIK:0001327567|SEC Filings

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions	12 Months Ended
	Jul. 31, 2026	Jul. 31, 2025	Jul. 31, 2024
Revenue:
Revenue	$ 11,480	$ 9,221	$ 8,027
Cost of revenue:
Cost of revenue	3,403	2,451	2,059
Total gross profit	8,077	6,770	5,968
Operating expenses:
Research and development	2,552	1,984	1,810
Sales and marketing	3,931	3,100	2,794
General and administrative	899	443	680
Total operating expenses	7,382	5,527	5,284
Operating income	695	1,243	684
Other income (expense), net	(159)	353	304
Income before income taxes	536	1,596	988
Provision for (benefit from) income taxes	229	462	(1,590)
Net income	$ 307	$ 1,134	$ 2,578
Net income per share, basic (in usd per share)	$ 0.41	$ 1.71	$ 4.04
Net income per share, diluted (in usd per share)	$ 0.40	$ 1.60	$ 3.64
Weighted-average shares used to compute net income per share, basic (in shares)	749	663	638
Weighted-average shares used to compute net income per share, diluted (in shares)	764	709	708
Product
Revenue:
Revenue	$ 2,280	$ 1,802	$ 1,603
Cost of revenue:
Cost of revenue	568	413	348
Subscription and support
Revenue:
Revenue	9,200	7,419	6,424
Cost of revenue:
Cost of revenue	$ 2,835	$ 2,038	$ 1,711

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	12 Months Ended
	Jul. 31, 2026	Jul. 31, 2025	Jul. 31, 2024
Cash flows from operating activities
Net income	$ 307	$ 1,134	$ 2,578
Adjustments to reconcile net income to net cash provided by operating activities:
Share-based compensation for equity-based awards	1,774	1,295	1,076
Deferred income taxes	(19)	(350)	(2,034)
Depreciation and amortization	855	343	284
Amortization of deferred contract costs	590	481	446
Amortization of debt issuance costs	0	1	3
Change in fair value of convertible senior notes and capped calls	562	0	0
Change in fair value of contingent consideration liability	(117)	(135)	0
Reduction of operating lease right-of-use assets	75	65	56
Amortization of investment premiums, net of accretion of purchase discounts	(54)	(41)	(60)
Unrealized foreign currency exchange (gains) losses, net	1	0	0
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable, net	(335)	(345)	(155)
Financing receivables, net	181	191	(866)
Deferred contract costs	(795)	(555)	(490)
Prepaid expenses and other assets	(139)	88	(134)
Accounts payable	43	107	(15)
Accrued compensation	327	51	4
Accrued and other liabilities	95	147	385
Deferred revenue	1,202	1,239	2,180
Net cash provided by operating activities	4,553	3,716	3,258
Cash flows from investing activities
Purchases of investments	(3,694)	(3,696)	(3,551)
Proceeds from sales of investments	3,489	1,197	956
Proceeds from maturities of investments	2,204	1,595	1,853
Business acquisitions, net of cash and restricted cash acquired	(4,663)	(1,054)	(611)
Purchases of property, equipment, and other assets	(440)	(247)	(157)
Net cash used in investing activities	(3,104)	(2,205)	(1,510)
Cash flows from financing activities
Repayments and settlement of conversions of convertible senior notes	(160)	(966)	(1,033)
Proceeds from capped calls related to convertible senior notes	10	0	0
Repurchases of common stock	(1,000)	0	(567)
Proceeds from sales of shares through employee equity incentive plans	265	371	283
Payments for taxes related to net share settlement of equity awards	(126)	(184)	(26)
Payments of contingent consideration liability	(191)	0	0
Net cash used in financing activities	(1,202)	(779)	(1,343)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(3)	0	0
Net increase in cash, cash equivalents, and restricted cash	244	732	405
Cash, cash equivalents, and restricted cash—beginning of period	2,279	1,547	1,142
Cash, cash equivalents, and restricted cash—end of period	2,523	2,279	1,547
Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets
Cash and cash equivalents	2,514	2,269	1,535
Restricted cash included in prepaid expenses and other current assets	5	10	12
Restricted cash included in other assets	4	0	0
Total cash, cash equivalents, and restricted cash	2,523	2,279	1,547
Non-cash investing and financing activities
Equity consideration for business acquisitions	(18,862)	(27)	(27)
Contingent consideration for a business acquisition	0	(649)	0
Supplemental disclosures of cash flow information
Cash paid for income taxes	199	505	342
Cash paid for contractual interest	$ 0	$ 2	$ 6

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Jul. 31, 2026	Jul. 31, 2025
Current assets:
Cash and cash equivalents	$ 2,514	$ 2,269
Short-term investments	557	635
Accounts receivable, net of allowance for credit losses of $4 and $10 as of July 31, 2026 and July 31, 2025, respectively	3,629	2,965
Short-term financing receivables, net	592	715
Short-term deferred contract costs	544	419
Prepaid expenses and other current assets	807	520
Total current assets	8,643	7,523
Property and equipment, net	523	387
Operating lease right-of-use assets	700	347
Long-term investments	4,835	5,555
Long-term financing receivables, net	944	1,002
Long-term deferred contract costs	667	586
Goodwill	22,010	4,567
Intangible assets, net	7,017	763
Deferred tax assets	2,443	2,424
Other assets	678	422
Total assets	48,460	23,576
Current liabilities:
Accounts payable	290	232
Accrued compensation	1,048	608
Accrued and other liabilities	838	846
Deferred revenue	7,747	6,302
Total current liabilities	9,923	7,988
Long-term convertible senior notes	1,774	0
Long-term deferred revenue	7,009	6,450
Deferred tax liabilities	251	89
Long-term operating lease liabilities	726	338
Other long-term liabilities	1,285	887
Total liabilities	20,968	15,752
Commitments and contingencies (Note 13)
Stockholders’ equity:
Preferred stock; $0.0001 par value; 100 shares authorized; none issued and outstanding as of July 31, 2026 and July 31, 2025	0	0
Common stock and additional paid-in capital; $0.0001 par value; 2,000 shares authorized; 815 and 668 shares issued and outstanding as of July 31, 2026 and July 31, 2025, respectively	24,772	5,292
Accumulated other comprehensive income (loss)	(71)	48
Retained earnings	2,791	2,484
Total stockholders’ equity	27,492	7,824
Total liabilities and stockholders’ equity	$ 48,460	$ 23,576