Aureus
AExcellent

Palo Alto Networks, Inc.(PANW)

A

Financial data as of Jul 31, 2026Improving · Technology

FCF Margin20.4%Free Cash Flow / Revenue
Cash Conversion—Operating CF / Net Income
Free Cash Flow$4.1B
Revenue$11.5B
Net Cash$14.0MCash exceeds debt
Debt / FCF1.1xManageable debt load
Current Ratio0.87Tight short-term liquidity
YoY FCF Growth+36.9%5 of 5 quarters positive

How This Grade Was Calculated

Base grade from FCF margin, adjusted by financial health factors

BaseB
→
+0.5Healthy FCF margin with manageable debt (20.4%, 1.1x)
→
-0.5Current ratio below 1.0 (0.87) (reduced — strong FCF covers short-term obligations)
→
+1Strong YoY FCF growth (36.9% YoY)
→
+1Net cash position with strong FCF margin
→
+1Very low debt-to-FCF ratio (1.1x)
→
FinalA

Analysis Summary

Strengths

  • Exceptional FCF margin (20.4%)
  • Net cash position ($0.0B)
  • Very low debt relative to cash flow (1.1x)
  • Strong YoY FCF growth (+36.9%)
  • Strong revenue growth (34.4% YoY)

Concerns

  • Current ratio below 1.0 — tight short-term liquidity
Cash conversion ratio unavailable or not meaningfulSBC-adjusted FCF used — $1.8B stock-based compensation (43% of reported FCF) subtracted

Financial Breakdown

Key financials compared side by side

Margin Composition

FCF Margin20.4%
Net Margin2.7%
Operating CF Margin39.7%
CapEx Ratio3.8%

Balance Sheet Health

Debt, liquidity, and leverage snapshot

Net Cash$14.0MCash exceeds debt
Debt / FCF1.1xManageable debt load
Current Ratio0.87Tight liquidity
Debt / Equity0.09Low leverage

Quarterly FCF Trend

+36.9% YoYImproving (+36.9%)

Free cash flow per quarter

Sector Comparison — Technology

FCF Margin ranked against sector peers

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Detailed Metrics

Company NamePalo Alto Networks, Inc.
SectorTechnology
Free Cash Flow$4.1B
Revenue$11.5B
Net Income$307.0M
Operating Cash Flow$4.6B
Capital Expenditure$440.0M
FCF Margin20.4%
Cash Conversion Rate—
Net Margin2.7%
Total Debt$2.5B
Total Cash$2.5B
Net Cash$14.0M
Current Ratio0.87
Debt / Equity0.09
Debt / FCF1.1x
YoY FCF Growth+36.9%
Positive Quarters5 of 5
Trend DirectionImproving
Report DateJul 31, 2026
GradeA
Data SourceYahoo Finance

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