Palo Alto Networks, Inc. stock research
FY2025 Q2
Palo Alto Networks (PANW) Gross Margin — Quarter Ended Jan 31, 2025
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue also rose. The gross margin weakened slightly as cost of revenue grew at a faster pace relative to revenue.
Gross margin takeaway
Quarter ended Jan 31, 2025 · FY2025 Q2
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue also rose. The gross margin weakened slightly as cost of revenue grew at a faster pace relative to revenue.
- The increase in cost of revenue relative to revenue is the most observable factor affecting the gross margin, as it outpaced revenue growth and compressed the margin.
- Compared to the immediately preceding quarter, gross margin was lower; compared to the same quarter one year earlier, gross margin was also lower. Revenue and gross profit were higher in both comparisons, but cost of revenue increased more sharply.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
73.5%
Gross profit
$1.7B
Revenue
$2.3B
Cost of revenue
$599.0M
Quarter-over-quarter change
-0.6 pts
Year-over-year change
-1.3 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 |
|---|---|---|---|---|
| Apr 30, 2024 | $2.0B | $1.5B | $513.6M | 74.1% |
| Jul 31, 2024 | $2.2B | $1.6B | $573.7M | 73.8% |
| Oct 31, 2024 | $2.1B | $1.6B | $554.0M | 74.1% |
| Jan 31, 2025 | $2.3B | $1.7B | $599.0M | 73.5% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Oct 31, 2024
-0.6 pts
Year-over-year change
Jan 31, 2024
-1.3 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The increase in cost of revenue relative to revenue is the most observable factor affecting the gross margin, as it outpaced revenue growth and compressed the margin.
Compared to the immediately preceding quarter, gross margin was lower; compared to the same quarter one year earlier, gross margin was also lower. Revenue and gross profit were higher in both comparisons, but cost of revenue increased more sharply.
Monitor the trend of cost of revenue growth relative to revenue growth, as continued divergence could further pressure gross margin.