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Palo Alto Networks Inc Annual Report, Year Ended Jul 31, 2021

Filing Date
Filed September 3, 2021
Period End
July 31, 2021
Security
PANW
In the record · 2016–202610-K1110-Q328-K110

PANW filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 110 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Jun ’20Jun ’20
  2. Leadership change8-K · Dec ’22Dec ’22
  3. Leadership change8-K · Aug ’26Aug ’26

01—Abstract

Summary

Summary of the 10-K filed September 3, 2021. Cited figures are marked; the original filing is the authoritative source.

Palo Alto Networks, Inc. (PANW) reported robust growth in its fiscal year ending July 31, 2021, with total revenue increasing by 24.9% year-over-year to $4.3 billiona.

This growth was primarily driven by a strong performance in subscription and support revenue, which increased by 33.8% to $3.1 billionb, now representing 73.7% of total revenue. Product revenue saw a more modest increase of 5.3%. The company has strategically expanded its portfolio through key acquisitions in fiscal year 2021, including Bridgecrew, Expanse, Sinefa, and Crypsis, aimed at enhancing its cloud security, security analytics, and incident response capabilities.

Despite the overall revenue growth, the company reported an operating loss of $304.1 millionc, an increase from the prior year's loss of $179.0 million, largely due to significant investments in research and development and sales and marketing to fuel future growth. Financially, Palo Alto Networks ended the fiscal year with a strong liquidity position, holding $3.8 billion in cash, cash equivalents, and investments. The company also made substantial progress in its share repurchase program.

Management remains focused on innovation and expanding its customer base, particularly in cloud security and security analytics, with a clear strategy to address the evolving cybersecurity landscape. The company's extensive portfolio, including its ML-Powered Next-Generation Firewalls, Prisma cloud security platform, and Cortex security analytics and automation solutions, positions it to capitalize on the ongoing digital transformation and increasing demand for advanced cybersecurity solutions.

02—Key points

Key Highlights

  1. Total revenue increased by 24.9% to $4.3 billion for fiscal year 2021.
  2. Subscription and support revenue grew by 33.8% to $3.1 billion, comprising 73.7% of total revenue.
  3. The company executed several strategic acquisitions in FY2021, including Bridgecrew, Expanse, Sinefa, and Crypsis, to enhance its product portfolio.
  4. Despite revenue growth, Palo Alto Networks reported an operating loss of $304.1 million, driven by increased R&D and sales/marketing investments.
  5. The company ended the fiscal year with a strong cash position of $3.8 billion.
  6. Palo Alto Networks continues to invest heavily in research and development to maintain its competitive edge in the cybersecurity market.

03—One dollar

Follow one dollar

For each $1.00 of revenue in FY2021, Palo Alto Networks Inc lost $0.12.

  1. Revenue$4.26B100.0%
  2. Cost of revenue−$1.27B30.0%
  3. Gross profit$2.98B70.0%
  4. Operating costs−$3.29B77.2%
  5. Operating income−$304.1M7.1%
  6. Interest, other & tax−$194.8M4.6%
  7. Net income−$498.9M11.7%
Computed from 10-KFY2021filed September 3, 2021Computed from this filing’s revenue, gross profit, operating income and net income · right columngrey figure: share of revenue

04—Financials

Financial Highlights

Figures from 10-KFY2021filed September 3, 2021
Revenue$4.26B70.0% Gross MarginNet Income-$498.90M-11.7% Net MarginEPS (Diluted)$-0.86Total Assets$10.24BCash & Equivalents$1.88BFree Cash Flow$1.50B

Financial Statements

FY2021 against FY2020

Line itemFY2021FY2020Change
Revenue$4.26B$3.41B+24.9%
Cost of Revenue$1.27B$999.50M+27.6%
Gross Profit$2.98B$2.41B+23.8%
R&D Expenses$1.14B$768.10M+48.5%
Operating Expenses$3.29B$2.59B+26.9%
Operating Income-$304.10M-$179.00M−69.9%
Interest Expense$163.30M$88.70M+84.1%
Net Income-$498.90M-$267.00M−86.9%
EPS (Basic)$-0.86$-0.46−88.0%
EPS (Diluted)$-0.86$-0.46−88.0%
Shares Outstanding (Basic)578.20M581.40M−0.6%
Shares Outstanding (Diluted)578.20M581.40M−0.6%

05—Questions

Frequently Asked Questions

  1. What was Palo Alto Networks' revenue growth in fiscal year 2021?

    Palo Alto Networks experienced a 24.9% year-over-year increase in total revenue for fiscal year 2021, reaching $4.3 billion. This growth was predominantly fueled by a 33.8% surge in subscription and support revenue.

  2. Did Palo Alto Networks achieve profitability in fiscal year 2021?

    No, Palo Alto Networks reported an operating loss of $304.1 million for fiscal year 2021. This was an increase from the prior year's operating loss of $179.0 million, largely due to significant investments in research and development and sales and marketing initiatives.

  3. What is the company's strategy for future growth?

    Palo Alto Networks' growth strategy centers on continued innovation and expansion of its cybersecurity portfolio, particularly in cloud security and security analytics. This includes strategic acquisitions to bolster its capabilities and a focus on growing its installed customer base and increasing the adoption of its subscription-based offerings.

  4. How does the company manage its financial resources and liquidity?

    The company maintained a strong liquidity position with $3.8 billion in cash, cash equivalents, and investments as of July 31, 2021. It also has an active share repurchase program, indicating a focus on returning value to shareholders while investing in future growth.

06—Continue

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