Palo Alto Networks, Inc. stock research
FY2024 Q3
Palo Alto Networks (PANW) Gross Margin — Quarter Ended Apr 30, 2024
Revenue and gross profit were unchanged from the prior quarter, while cost of revenue increased, resulting in a weakened gross margin. Compared to the same quarter a year earlier, revenue and gross profit were higher, and gross margin improved.
Gross margin takeaway
Quarter ended Apr 30, 2024 · FY2024 Q3
Revenue and gross profit were unchanged from the prior quarter, while cost of revenue increased, resulting in a weakened gross margin. Compared to the same quarter a year earlier, revenue and gross profit were higher, and gross margin improved.
- The strongest observable margin driver is the relationship between cost of revenue and revenue. In the current quarter, cost of revenue increased relative to the prior quarter while revenue held steady, putting downward pressure on margin. Year-over-year, cost of revenue grew more slowly than revenue, supporting margin expansion.
- Quarter-over-quarter, gross margin weakened as revenue remained flat while cost of revenue rose. Year-over-year, gross margin improved as revenue grew faster than cost of revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
74.1%
Gross profit
$1.5B
Revenue
$2.0B
Cost of revenue
$513.6M
Quarter-over-quarter change
-0.6 pts
Year-over-year change
+1.7 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 |
|---|---|---|---|---|
| Jul 31, 2023 | $2.0B | $1.4B | $506.8M | 74.1% |
| Oct 31, 2023 | $1.9B | $1.4B | $472.8M | 74.8% |
| Jan 31, 2024 | $2.0B | $1.5B | $499.1M | 74.7% |
| Apr 30, 2024 | $2.0B | $1.5B | $513.6M | 74.1% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jan 31, 2024
-0.6 pts
Year-over-year change
Apr 30, 2023
+1.7 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the relationship between cost of revenue and revenue. In the current quarter, cost of revenue increased relative to the prior quarter while revenue held steady, putting downward pressure on margin. Year-over-year, cost of revenue grew more slowly than revenue, supporting margin expansion.
Quarter-over-quarter, gross margin weakened as revenue remained flat while cost of revenue rose. Year-over-year, gross margin improved as revenue grew faster than cost of revenue.
Monitor the trend in cost of revenue as a proportion of revenue in subsequent quarters.