Palo Alto Networks, Inc. stock research
FY2026 Q1
Palo Alto Networks (PANW) Gross Margin — Quarter Ended Oct 31, 2025
Revenue was unchanged from the prior quarter, while gross profit decreased slightly and cost of revenue declined, resulting in a higher gross margin. Compared to the same quarter last year, revenue and gross profit both increased, cost of revenue rose, and gross margin was stable.
Gross margin takeaway
Quarter ended Oct 31, 2025 · FY2026 Q1
Revenue was unchanged from the prior quarter, while gross profit decreased slightly and cost of revenue declined, resulting in a higher gross margin. Compared to the same quarter last year, revenue and gross profit both increased, cost of revenue rose, and gross margin was stable.
- The gross margin improved sequentially as cost of revenue declined while revenue held steady, indicating a favorable shift in the relationship between revenue and costs. The year-over-year comparison shows gross margin was nearly unchanged despite higher revenue and cost of revenue.
- Compared to the immediately preceding quarter, gross margin improved, driven by lower cost of revenue on flat revenue. Versus the same quarter one year earlier, gross margin was essentially stable, with revenue and cost of revenue both higher.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
74.2%
Gross profit
$1.8B
Revenue
$2.5B
Cost of revenue
$638.0M
Quarter-over-quarter change
+1.0 pts
Year-over-year change
+0.1 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, 2025 | $2.3B | $1.7B | $599.0M | 73.5% |
| Apr 30, 2025 | $2.3B | $1.7B | $619.0M | 73.0% |
| Jul 31, 2025 | $2.5B | $1.9B | $679.6M | 73.2% |
| Oct 31, 2025 | $2.5B | $1.8B | $638.0M | 74.2% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jul 31, 2025
+1.0 pts
Year-over-year change
Oct 31, 2024
+0.1 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The gross margin improved sequentially as cost of revenue declined while revenue held steady, indicating a favorable shift in the relationship between revenue and costs. The year-over-year comparison shows gross margin was nearly unchanged despite higher revenue and cost of revenue.
Compared to the immediately preceding quarter, gross margin improved, driven by lower cost of revenue on flat revenue. Versus the same quarter one year earlier, gross margin was essentially stable, with revenue and cost of revenue both higher.
Monitor the trajectory of cost of revenue relative to revenue, as its decline contributed to the sequential margin improvement.