01—Abstract
Summary
Summary of the 10-K filed August 29, 2025. Cited figures are marked; the original filing is the authoritative source.
Palo Alto Networks (PANW) demonstrated robust growth in fiscal year 2025, with total revenue reaching $9.2 billiona, a 14.9% increase year-over-year.
The company continues its strategic shift towards platformization, integrating its diverse cybersecurity offerings into cohesive solutions that simplify security architectures for customers. Subscription and support revenue now constitute a significant 80.5%b of total revenue, highlighting a strong recurring revenue base and customer adoption of cloud-delivered security services. The company also made strategic acquisitions, including IBM's QRadar assets and Protect AI, to further enhance its platform capabilities, particularly in AI security and security operations.
Looking ahead, Palo Alto Networks is focused on continued innovation, especially in AI-driven security, and expanding its global reach. The company has announced its intent to acquire CyberArk Software Ltd., a move expected to significantly broaden its identity security offerings.
While facing intense competition and macroeconomic uncertainties, Palo Alto Networks maintains a strong financial position and continues to invest heavily in research and development to address the evolving threat landscape. Investors should monitor the integration of recent acquisitions and the potential impact of the proposed CyberArk acquisition on future growth and market position.
02—Key points
Key Highlights
- Total revenue reached $9.2 billion in fiscal year 2025, an increase of 14.9% year-over-year, driven by strong subscription and support revenue growth.
- Subscription and support revenue now represents 80.5% of total revenue, indicating a successful shift towards a recurring revenue model.
- The company made strategic acquisitions, including IBM's QRadar assets and Protect AI, to bolster its AI security and security operations platforms.
- Palo Alto Networks announced its definitive agreement to acquire CyberArk Software Ltd., a significant move expected to expand its identity security capabilities.
- Investment in research and development remains a priority, with new offerings like Prisma Access Browser, Cortex Cloud, and Prisma AIRS launched in fiscal year 2025.
- The company generated $3.7 billion in cash flow from operating activities and $3.5 billion in free cash flow (non-GAAP) in fiscal year 2025, demonstrating strong cash generation.
- Palo Alto Networks has a strong balance sheet with $8.5 billion in cash, cash equivalents, and investments as of July 31, 2025.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2025, Palo Alto Networks Inc kept $0.12.
- Revenue$9.22B100.0%
- Cost of revenue−$2.45B26.6%
- Gross profit$6.77B73.4%
- Operating costs−$5.53B59.9%
- Operating income$1.24B13.5%
- Interest, other & tax−$109.0M1.2%
- Net income$1.13B12.3%
Where FY2025 revenue went
$9.22B- Other operating costs: $3.54B, 38% of revenue
- Cost of revenue: $2.45B, 27% of revenue
- R&D: $1.98B, 22% of revenue
- Net income: $1.13B, 12% of revenue
- Interest, other & tax: $109.0M, 1.2% of revenue
Kept 12% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2025filed August 29, 2025Financial Statements
FY2025 against FY2024
| Line item | FY2025FY2024 | Change |
|---|---|---|
| Revenue | $9.22B$8.03B | +14.9% |
| Cost of Revenue | $2.45B$2.06B | +19.1% |
| Gross Profit | $6.77B$5.97B | +13.4% |
| R&D Expenses | $1.98B$1.81B | +9.7% |
| Operating Expenses | $5.53B$5.28B | +4.6% |
| Operating Income | $1.24B$683.90M | +81.7% |
| Interest Expense | $3.00M$8.30M | −63.9% |
| Net Income | $1.13B$2.58B | −56.0% |
| EPS (Basic) | $1.71$4.04 | −57.7% |
| EPS (Diluted) | $1.60$3.64 | −56.0% |
| Shares Outstanding (Basic) | 662.50M638.50M | +3.8% |
| Shares Outstanding (Diluted) | 709.30M707.90M | +0.2% |
05—Questions
Frequently Asked Questions
What were the key financial drivers for Palo Alto Networks in fiscal year 2025?
The primary financial driver was the continued strong growth in subscription and support revenue, which now constitutes over 80% of total revenue. This reflects successful customer adoption of their integrated security platforms and recurring services. Product revenue also saw growth, primarily from new hardware and enhanced on-premise software licenses. The company's overall revenue increased by 14.9% year-over-year to $9.2 billion.
How are acquisitions impacting Palo Alto Networks' strategy and future prospects?
Palo Alto Networks actively uses acquisitions to accelerate its platformization strategy and expand its capabilities. The acquisitions of IBM's QRadar assets and Protect AI in fiscal year 2025 are key examples, strengthening their security operations and AI security platforms, respectively. The announced acquisition of CyberArk Software Ltd. is a major strategic move aimed at significantly enhancing their identity security offerings, which is a critical component of a comprehensive cybersecurity strategy.
What is the company's outlook regarding AI and its integration into products?
Palo Alto Networks views AI as a core element of its cybersecurity strategy, emphasizing its use in both its product offerings and internal operations. The company has launched AI-driven features across its platforms, including Prisma AIRS for AI ecosystem security and AI for IT Operations (AIOps). They are also embedding AI into their talent acquisition and employee enablement processes. This focus on AI is intended to provide more secure, faster, and cost-effective outcomes for their customers.
What are the main risks facing Palo Alto Networks, as highlighted in the filing?
Key risks include intense competition from both large tech companies and specialized security vendors, potential disruptions from global economic and geopolitical conditions, the success of integrating acquisitions (particularly the pending CyberArk deal), and the rapid evolution of technology and cyber threats. Risks related to product defects, cybersecurity incidents affecting their own infrastructure, reliance on channel partners, and intellectual property disputes are also significant.
06—Continue