How does Palo Alto Networks (PANW) make money?

Palo Alto Networks (PANW) generates revenue primarily from Subscription, which accounted for 53.5% of total revenue in TTM through Q2 2026. The company reported $10.61B in revenue and converted 7.9% of it into net profit, equivalent to roughly $842.80M in net income — what's left after the cost of revenue, operating expenses, interest, and income taxes.

What is the gross profit margin of Palo Alto Networks (PANW)?

Palo Alto Networks (PANW) reported a gross profit margin of 71.9% in TTM through Q2 2026, equivalent to $7.63B in gross profit on $10.61B in revenue. Gross margin measures how much of each dollar of revenue remains after the direct cost of producing or delivering the product — a higher figure typically signals pricing power, scale, or a less capital-intensive business model.

What is the operating profit margin of Palo Alto Networks (PANW)?

Palo Alto Networks (PANW) reported an operating profit margin of 9.6% in TTM through Q2 2026, equivalent to $1.02B in operating income. Operating margin captures profitability after research & development, sales & marketing, and general & administrative expenses — but before interest, taxes, and one-off items — and is the cleanest single read on the underlying business's efficiency.

What is the net profit margin of Palo Alto Networks (PANW)?

Palo Alto Networks (PANW) reported a net profit margin of 7.9% in TTM through Q2 2026, equivalent to $842.80M in net income. Net margin is the bottom-line share of revenue that survives every expense — operating costs, interest, and income taxes — and is the figure that flows directly into earnings per share.

Is Palo Alto Networks (PANW) profitable?

Yes. Palo Alto Networks (PANW) reported $842.80M in net income for TTM through Q2 2026, with a net profit margin of 7.9%. The company earned more from its operations than it paid out in costs, interest, and income taxes, leaving positive earnings on the bottom line.

How much does Palo Alto Networks (PANW) invest in research and development?

Palo Alto Networks (PANW) invested $2.28B in research and development during TTM through Q2 2026, roughly 21.5% of total revenue. R&D spending funds the company's future product pipeline and is expensed in full on the income statement rather than capitalised, which makes the operating margin sensitive to how aggressively management chooses to reinvest in innovation.

How much does Palo Alto Networks (PANW) spend on capital expenditures?

Palo Alto Networks (PANW) spent $76.90M on capital expenditures (CapEx) during TTM through Q2 2026, roughly 0.7% of total revenue. CapEx represents long-lived investment in property, equipment, data centres, and other physical infrastructure, and is subtracted from operating cash flow to arrive at free cash flow.

How much free cash flow does Palo Alto Networks (PANW) generate?

Palo Alto Networks (PANW) generated $4.29B in free cash flow during TTM through Q2 2026, a free-cash-flow margin of 40.5%. Free cash flow is the cash left after capital expenditures and represents the discretionary pool the company can use to pay dividends, repurchase shares, repay debt, or fund acquisitions without raising external capital.

What is the effective tax rate of Palo Alto Networks (PANW)?

Palo Alto Networks (PANW) had an effective tax rate of 39.7% in TTM through Q2 2026. The effective rate is the actual share of pre-tax income paid as income taxes and can differ materially from the statutory rate due to foreign earnings mix, tax credits (such as R&D), share-based compensation deductions, and one-off discrete items.

What are the main business segments of Palo Alto Networks (PANW)?

Palo Alto Networks (PANW) reports revenue across 3 reportable product segments, led by Subscription at 53.5% of total revenue in TTM through Q2 2026. See the revenue-by-segment table on this page for the full breakdown and how each segment feeds into the income-statement waterfall above.

How Palo Alto Networks Makes Money: 2026 Visual Revenue Map

Palo Alto Networks (PANW) Income Statement Flow — TTM through Q2 2026

Calculated from the four most recent reported quarters, ending April 30, 2026 (reported June 3, 2026).

Palo Alto Networks discloses geographic revenue only in annual filings. to view the full breakdown.

Palo Alto Networks (PANW) Revenue by Product Segment — TTM through Q2 2026

Aggregated from the four quarterly disclosures behind this TTM. Minor differences vs the company's annual filing can occur if reported segments changed mid-year.

Revenue contribution by product segment for Palo Alto Networks (PANW) in TTM through Q2 2026.
Segment	Revenue (USD)	% of total
Subscription	$5.67B	53.5%
Support	$2.74B	25.8%
Product	$2.19B	20.7%
Total	$10.61B	100%

Subscription$5.67B
Support$2.74B
Product$2.19B
Total$10.61B

Revenue Breakdown — TTM through Q2 2026

In TTM through Q2 2026, Palo Alto Networks (PANW) reports revenue across 3 operating segments; the largest segment was Subscription at 53.5%, followed by Support (25.8%) and Product (20.7%).

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