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Jan 31
Palo Alto Networks Q2 2025 Earnings Report
Palo Alto Networks reported strong revenue growth but a decline in GAAP net income due to a prior-year tax benefit.
Key Takeaways
Palo Alto Networks delivered 14.29% year-over-year revenue growth, driven by strong adoption of Next-Generation Security solutions. Non-GAAP EPS improved, but GAAP net income declined due to a prior-year tax benefit. The company continues to expand its AI-powered security offerings, raising its operating margin and EPS outlook for FY25.
Revenue grew 14.29% YoY to $2,257,400,000.
Next-Generation Security ARR increased 37% YoY to $4,800,000,000.
GAAP net income declined 84.70% YoY due to a prior-year tax benefit.
Operating margin remained strong at 28.40%.
Palo Alto Networks
Palo Alto Networks
Palo Alto Networks Revenue by Segment
Revenue by Segment
Product Revenue
CapyFin.comSubscription and Support Revenue
CapyFin.com Forward Guidance
Palo Alto Networks expects continued revenue growth in Q3 FY25, with strong Next-Gen Security momentum and higher operating margins.
Positive Outlook
- Revenue guidance of $2,260,000,000 to $2,290,000,000 (+14% to +15% YoY).
- Next-Gen Security ARR expected to grow 33% to 34% YoY.
- RPO expected to grow 19% to 20% YoY.
- Operating margin guidance raised to 28.0% - 28.5%.
- AI-driven security solutions continue to gain traction.
Challenges Ahead
- Macroeconomic uncertainty could impact enterprise spending.
- Competition in cybersecurity remains intense.
- Potential headwinds from FX fluctuations.
- Slower than expected adoption in certain segments.
- Stock-based compensation expenses remain high.
Revenue & Expenses
Visualization of income flow from segment revenue to net income