Palo Alto Networks, Inc. stock research
FY2025 Q3
Palo Alto Networks (PANW) Gross Margin — Quarter Ended Apr 30, 2025
Revenue and gross profit were stable sequentially but increased year over year, while cost of revenue rose in both periods, leading to a lower gross margin compared to both the prior quarter and the same quarter last year. The filing includes risk factors and management discussion but does not provide specific commentary on gross margin changes.
Gross margin takeaway
Quarter ended Apr 30, 2025 · FY2025 Q3
Revenue and gross profit were stable sequentially but increased year over year, while cost of revenue rose in both periods, leading to a lower gross margin compared to both the prior quarter and the same quarter last year. The filing includes risk factors and management discussion but does not provide specific commentary on gross margin changes.
- The strongest observable driver of the gross margin change was the increase in cost of revenue, which grew while revenue remained flat sequentially and increased year over year, causing the margin to narrow.
- Compared to the immediately preceding quarter, gross margin weakened as cost of revenue increased while revenue was unchanged. Compared to the same quarter one year earlier, gross margin also weakened as cost of revenue grew more than revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
73.0%
Gross profit
$1.7B
Revenue
$2.3B
Cost of revenue
$619.0M
Quarter-over-quarter change
-0.5 pts
Year-over-year change
-1.2 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, 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% |
| Apr 30, 2025 | $2.3B | $1.7B | $619.0M | 73.0% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jan 31, 2025
-0.5 pts
Year-over-year change
Apr 30, 2024
-1.2 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver of the gross margin change was the increase in cost of revenue, which grew while revenue remained flat sequentially and increased year over year, causing the margin to narrow.
Compared to the immediately preceding quarter, gross margin weakened as cost of revenue increased while revenue was unchanged. Compared to the same quarter one year earlier, gross margin also weakened as cost of revenue grew more than revenue.
Monitor the trend of cost of revenue relative to revenue in future quarters.