Palo Alto Networks, Inc. · NASDAQ:PANW

Palo Alto Networks — Q4 2025 Earnings Presentation

32 slides from Palo Alto Networks's earnings presentation, Aug 18, 2025

  1. Slide 1: Q4 Fiscal Year 2025 Earnings Call

    Q4 Fiscal Year 2025 Earnings Call August 18, 2025 © 2025 Palo Alto Networks, Inc. All rights reserved. Proprietary and confidential information.

  2. Slide 2: Safe Harbor

    Safe Harbor This presentation contains “forward-looking” statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements other than statements of historical or current facts, including, without limitation, statements regarding the cybersecurity

  3. Slide 3: Safe Harbor - Continued

    Safe Harbor - Continued Non-GAAP Financial Measures All information in this presentation is as of August 18, 2025. This presentation contains non-GAAP financial measures and key metrics relating to the company’s past and expected future performance. We have not reconciled diluted non-GAAP earnings pe

  4. Slide 4: © 2025 Palo Alto Networks, Inc. All rights reserved. Proprietary and confidential information.

    © 2025 Palo Alto Networks, Inc. All rights reserved. Proprietary and confidential information.

  5. Slide 5: Q4 Capped a Strong Year of Execution

    Q4 Capped a Strong Year of Execution RPO Acceleration Q4’25 RPO Q4’25 NGS ARR2 Q4’25 Revenue as Revenue $15.8B $5.58B $2.54B Surpasses $10B +24% y/y +32% y/y +16% y/y Run-Rate1 FY’25 Operating Margin (non-GAAP) FY’25 EPS (non-GAAP) Continue to Deliver Free Cash Flow and 28.8% $3.34 +150 bps y/y +18%

  6. Slide 6: Customers Continue to Platformize With Us

    Customers Continue to Platformize With Us For Superior Security and More Efficient Outcomes Total Platformizations Record Net New Platformizations in Q4 ~1,400 ~1,250 On Track for FY’30 ~1,150 Target of ~1,100 ~1,000 2,500-3,500 120% NRR2 ~900 Platformizations Among Platformized customers with and low

  7. Slide 7: Top Platformizations Included Some of Our Largest Deal Wins in Q4

    Top Platformizations Included Some of Our Largest Deal Wins in Q4 Global Consulting $111M Deal $50M Firm Customer purchased Cloud Security and SASE, including NGS Customer has AI Access to secure AI and Cloud environments, delivering a comprehensive solution and lower TCO. ARR1 3 Platformizations Cu

  8. Slide 8: Network Security: Higher Mix of Software and SASE Driving Growth

    Network Security | Higher Mix of Software and SASE is Driving Stronger Growth In Our Network Security Business Q4 Product Revenue Driven By Higher Software Mix +19% y/y Network Security NGS ARR, Product Revenue $3.9B up ~35%, y/y Growth 56% of total Q4 Network Security 44% >60% bookings from SASE &

  9. Slide 9: Network Security | SASE: Large Deal Momentum and Secure Browser

    Network Security | SASE: Robust Large Deal Momentum and Leading Innovation with Secure Browser Industry Leading Growth Marquee SASE Deals Largest Ever SASE Deal,with +35% SASE ARR1 Growth, y/y >$60M Global Technology Firm covering 180k seats of Fortune 500 1/3rd are SASE Customers >$55M Global Consu

  10. Slide 10: Cortex: Broad-Based Momentum in Q4, Led by XSIAM Deals

    Cortex | Broad-Based Momentum in Q4, Led by XSIAM Deals ~$1.7B Total Cortex & Prisma Cloud ARR, up ~25% y/y Leader in Gartner MQ for ~400 XSIAM Customers, up >2x y/y 3x Endpoint Protection Platforms (EPP) of XSIAM Customers of XSIAM customers with ~25% are Global 2000 >60% MTTR1 <10 minutes Average

  11. Slide 11: Cortex: Extended Data Lake Expands Our Reach Into New TAMs

    Cortex | Extended Data Lake Expands Our Reach Into New TAMs – in Both Peacetime and Wartime “PEACETIME” “WARTIME” Extended Data Lake Capabilities built upon $18B Exposure Application Cloud SOC Endpoint Email TAM expansion Management Security Security Transformation Protection Security from new FY25

  12. Slide 12: Recapping a Strong Finish in FQ4

    Recapping a Strong Finish in FQ4 Bookings & RPO accelerated in Q4, driven by focus on excellence in execution Platformization has taken hold, customers are consolidating with us in Q4 Higher software mix driving differentiated growth in Network Security and continued momentum in XSIAM Relentless focu

  13. Slide 13: Looking Ahead: Multiple Tailwinds to Drive Growth in FY'26

    Looking Ahead: We Have Multiple Tailwinds Across Our Existing Platforms to Drive Growth in FY’26 Network Security Security Operations Double-digit product revenue growth in FY’26, Rapid XSIAM growth at scale from AI-driven SOC driven by demand for Software products Transformation SASE transaction mo

  14. Slide 14: The Next Chapter of Our Multi-Platform Journey: Identity Security

    The Next Chapter of Our Multi-Platform Journey: Identity Security Why Identity? Why Now? Why CyberArk? Similar to Network Security, Convergence between Category leader in Identity Identity is a key control Identity & Security Security & Privileged Access and enforcement point. Platformization is nee

  15. Slide 15: Integration of CyberArk Will Deliver a Comprehensive Cybersecurity Platform

    The Integration of CyberArk Will Deliver a Comprehensive Cybersecurity Platform to Our Joint Customers Announce Interim Period Anticipated Close 7/30/25 Between Announce & Close 2H FY’26 Separate Companies 75K+ 10K+ focused on: Customers Customers (incl. >75% of G2000) (incl. >55% of F500) ❏ Driving

  16. Slide 16: © 2025 Palo Alto Networks, Inc. All rights reserved. Proprietary and confidential information.

    © 2025 Palo Alto Networks, Inc. All rights reserved. Proprietary and confidential information.

  17. Slide 17: Q4'25 Top Line Results

    Q4’25 Top Line Results Revenue Remaining Performance Obligation Next-Generation Security ARR Revenue Revenue Growth y/y RPO RPO Growth y/y NGS ARR NGS ARR Growth y/y 17 © 2025 Palo Alto Networks, Inc. All rights reserved. Proprietary and confidential information.

  18. Slide 18: Q4'25 Metrics

    Q4’25 Metrics Q4’25 Q4’25 Guidance (as of 5/20/25) Actual Total Revenue $2.49B - $2.51B $2.54B 14% - 15% y/y 16% y/y Product Revenue $574M Remaining Performance Obligation $15.2B - $15.3B $15.8B 19% - 20% y/y 24% y/y Next-Gen Security ARR $5.52 - $5.57B $5.58B 31% - 32% y/y 32% y/y Gross Margin (Non

  19. Slide 19: Consistent Rule of 50 Execution

    Consistent Rule of 50 Execution Rule of Rule +50of +501 1 Revenue Growth + Adjusted FCF Margin 19 © 2025 Palo Alto Networks, Inc. All rights reserved. Proprietary and confidential information.

  20. Slide 20: Significant Non-GAAP Operating Margin Expansion Since FY'22

    Significant Non-GAAP Operating Margin Expansion Since FY’22 Non-GAAP Operating Margin % 1 FY’26 G represents non-GAAP Operating Margin guidance midpoint, as provided on 8/18/2025. 20 © 2025 Palo Alto Networks, Inc. All rights reserved. Proprietary and confidential information.

  21. Slide 21: Strong Visibility In Sustaining Industry-Leading Adjusted FCF Margin

    Strong Visibility In Sustaining Industry-Leading Adjusted FCF Margin Growing balance of future collections from deferred payments increases cash flow visibility $4.0B $3.5B $3.1B ~50% ~40% of FY’26 FCF1 ~30% of FY’25 FCF of FY’24 FCF FY’24 FY’25 FY’26 G2 Collection in fiscal year from deferred payment

  22. Slide 22: Standalone Q1 & Fiscal Year 2026 Guidance

    Palo Alto Networks Standalone Q1 & Fiscal Year 2026 Guidance Q1 FY’26 FY 2026 Guidance (as of 8/18/25) Guidance (as of 8/18/25) Next-Gen Security ARR $5.82B - $5.84B $7.00B - $7.10B 29% y/y 26% - 27% y/y Remaining Performance Obligation $15.4B - $15.5B $18.6B - $18.7B 23% y/y 17% - 18% y/y Total Rev

  23. Slide 23: Targeting 40%+ Free Cash Flow Margin for the Combined Company

    We Are Targeting 40%+ Free Cash Flow Margin for the Combined Company in FY’28 Future Free Cash Flow Margin supported by Continued Operating Margin Expansion 40%+ Continued smooth transition to deferred payments FY’28 Adj. Free Cash Flow Margin for combined Palo Alto Networks & CyberArk Capex-light b

  24. Slide 24: Appendix

    Appendix © 2025 Palo Alto Networks, Inc. All rights reserved. Proprietary and confidential information.

  25. Slide 25: Modeling Points

    Modeling Points ● Q1’26 product revenue y/y growth approximately 20% ● FY’26 product revenue y/y growth low teens ● Q1’26 and FY’26 non-GAAP effective tax rate of 22% ● FY’26 cash taxes lower than FY’25 ● Q1’26 net interest and other income of $95M – $100M ● Q1’26 diluted shares outstanding 709 – 712

  26. Slide 26: GAAP to Non-GAAP Reconciliations – Gross Margin

    GAAP to Non-GAAP Reconciliations – Gross Margin $ In millions Non-GAAP gross profit and gross margin: Q425 $ % GAAP gross profit and gross margin $1,857.3 73.2% Share-based compensation-related charges 40.5 1.6% Amortization expense of acquired intangible assets 22.9 0.9% Litigation-related charges⁽¹⁾

  27. Slide 27: GAAP to Non-GAAP Reconciliations – Operating Margin

    GAAP to Non-GAAP Reconciliations – Operating Margin $ In millions Non-GAAP operating income and operating margin: Q425 $ % GAAP operating income and operating margin $497.2 19.6% Share-based compensation-related charges 372.7 14.7% Acquisition-related costs⁽¹⁾ (141.8) -5.6% Amortization expense of a

  28. Slide 28: GAAP to Non-GAAP Reconciliations – Operating Margin

    GAAP to Non-GAAP Reconciliations – Operating Margin $ In millions Non-GAAP operating income and operating FY'22 FY'23 FY'24 FY'25 margin: $ % $ % $ % $ % GAAP operating income and operating margin ($188.8) -3.4% $387.3 5.6% $683.9 8.5% $1,242.9 13.5% Share-based compensation-related charges 1,072.0

  29. Slide 29: GAAP to Non-GAAP Reconciliations – EPS

    GAAP to Non-GAAP Reconciliations – EPS Non-GAAP net income per share, diluted: Q424 Q425 FY'24 FY'25 GAAP net income per share, diluted $0.51 $0.36 $3.64 $1.60 Share-based compensation-related charges 0.41 0.53 1.73 1.98 Acquisition-related cost⁽¹⁾ 0.00 (0.20) 0.02 (0.15) Amortization expense of acq

  30. Slide 30: GAAP to Non-GAAP Reconciliations – Adjusted Free Cash Flow

    GAAP to Non-GAAP Reconciliations – Adjusted Free Cash Flow $ In millions Free cash flow and adjusted free cash flow (non-GAAP): Q425 Net cash provided by operating activities $1,020.8 Less: purchases of property, equipment, and other assets 86.3 Free cash flow (non-GAAP) $934.5 Add: capital expenditure

  31. Slide 31: GAAP to Non-GAAP Reconciliations – Adjusted Free Cash Flow

    GAAP to Non-GAAP Reconciliations – Adjusted Free Cash Flow $ In millions Free cash flow and adjusted free cash flow (non-GAAP): FY'21 FY'22 FY'23 FY'24 FY'25 Net cash provided by operating activities $1,503.0 $1,984.7 $2,777.5 $3,257.6 $3,716.0 Less: purchases of property, equipment, and other assets

  32. Slide 32: Thank You

    Thank You paloaltonetworks.com © 2025 Palo Alto Networks, Inc. All rights reserved. Proprietary and confidential information. 32

Palo Alto Networks — Q4 2025 Earnings Presentation on 6ix