Is the business good?
How good a business is PANW?
Palo Alto Networks earns 3.3% on the capital it employs against a 9.0% cost of capital, so growth costs more than it returns.
3.3%
Return on invested capital · cost of capital 9.0% · 5.7 points below what the capital costs: growth destroys value
- Operating margin
- 9.6%
Operating margin · Software - Infrastructure median 6.1% · 12 months to Q3 2026
- Share count, year on year
- +13%
Share count, year on year · shareholders own a smaller slice than a year ago
- R&D as % of revenue
- 21%
R&D as % of revenue
| Year | Operating margin |
|---|---|
| FY2020 | −5.3% |
| FY2021 | −7.1% |
| FY2022 | −3.4% |
| FY2023 | 5.6% |
| FY2024 | 8.5% |
| FY2025 | 13% |
Details›
- Gross margin12 months to Q3 2026
- 72%
- Operating margin12 months to Q3 2026
- 9.6%
- Net margin12 months to Q3 2026
- 8.0%
- Free cash flow margin
- 36%
- R&D as % of revenue
- 21%
- Revenue, trailing twelve months
- $10.6B
- Free cash flow, trailing twelve months
- $3.79B
- Net income, trailing twelve months
- $843M
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 3.3%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion from the cash flow statement.
Software - Infrastructure
Ranks #43 of 78 by Smart Score