Palo Alto Networks, Inc. stock research
FY2024 Q1
Palo Alto Networks (PANW) Gross Margin — Quarter Ended Oct 31, 2023
Revenue was lower than the prior quarter but higher than the same quarter last year. Gross profit remained stable sequentially while cost of revenue decreased, resulting in an improved gross margin compared to both periods.
Gross margin takeaway
Quarter ended Oct 31, 2023 · FY2024 Q1
Revenue was lower than the prior quarter but higher than the same quarter last year. Gross profit remained stable sequentially while cost of revenue decreased, resulting in an improved gross margin compared to both periods.
- The gross margin improved sequentially and year-over-year, driven by a lower cost of revenue relative to revenue. Gross profit was unchanged from the prior quarter despite lower revenue, indicating that cost of revenue declined more than revenue.
- Compared to the prior quarter, revenue was lower but gross profit was unchanged, and cost of revenue was lower, leading to a higher gross margin. Compared to the same quarter last year, revenue, gross profit, and cost of revenue were all higher, but gross margin improved as gross profit grew faster than cost of revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
74.8%
Gross profit
$1.4B
Revenue
$1.9B
Cost of revenue
$472.8M
Quarter-over-quarter change
+0.8 pts
Year-over-year change
+4.4 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Jan 31, 2023 | $1.7B | $1.2B | $466.2M | 71.8% |
| Apr 30, 2023 | $1.7B | $1.2B | $474.8M | 72.4% |
| Jul 31, 2023 | $2.0B | $1.4B | $506.8M | 74.1% |
| Oct 31, 2023 | $1.9B | $1.4B | $472.8M | 74.8% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jul 31, 2023
+0.8 pts
Year-over-year change
Oct 31, 2022
+4.4 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The gross margin improved sequentially and year-over-year, driven by a lower cost of revenue relative to revenue. Gross profit was unchanged from the prior quarter despite lower revenue, indicating that cost of revenue declined more than revenue.
Compared to the prior quarter, revenue was lower but gross profit was unchanged, and cost of revenue was lower, leading to a higher gross margin. Compared to the same quarter last year, revenue, gross profit, and cost of revenue were all higher, but gross margin improved as gross profit grew faster than cost of revenue.
Monitor the trend of cost of revenue relative to revenue, as it directly influences gross margin movements.