PANW · 10-K · 2026A · Full report

Operating Margin Drivers

Palo Alto Networks Inc · 2026-09-10 · Importance 63 · Surprise 64

Fiscal 2026 operating margin declined to 6.1% from 13.5% in fiscal 2025 as operating expenses grew faster than revenue and gross margin fell to 70.4% from 73.4%. Operating expenses increased $1.855 billion to $7.382 billion, reflecting acquisition-related personnel, amortization, severance, accelerated equity vesting, and expanded sales and development investment. Gross profit increased $1.307 billion to $8.077 billion, but the $1.855 billion operating-expense increase more than offset gross-profit growth. Operating income was approximately $695 million in fiscal 2026, compared with $1.243 billion in fiscal 2025.

Key facts

• Operating income for fiscal 2026 was $698 million, representing an operating margin of 6.1%. source