PANW · 10-K · 2026A · Full report

Supply Chain Constraints

Palo Alto Networks Inc · 2026-09-10 · Importance 26 · Surprise 24

Cost of product revenue increased primarily because of higher demand for hardware products and higher costs driven by supply chain challenges. Product gross margin declined, including because of the effect of those supply chain challenges on hardware products. The company also identified increased memory, storage, and other component shortages and costs as potential supply-chain pressures affecting its business.

Key facts

• Cost of product revenue increased for fiscal 2026 compared to fiscal 2025 primarily due to increased demand for hardware products, higher amortization of intangible assets from the CyberArk acquisition, and higher costs primarily driven by supply chain challenges, partially offset by a decrease in inventory excess and obsolete charges. source