Palo Alto Networks (NASDAQ: PANW) is an enterprise cybersecurity company that sells network security hardware, cloud-delivered security subscriptions, and support services to organizations worldwide. It makes money primarily through recurring subscription and support contracts, which accounted for $7.4B or 80.5% of total revenue in FY2025 (year ended July 31, 2025), with hardware products contributing the remaining $1.8B or 19.5%. Total revenue reached $9.2B in FY2025, up 14.9% year over year, with a gross margin of 73.4% and operating income of $1.2B. Next-Generation Security Annualized Recurring Revenue (NGS ARR) stood at $5.6B as of July 31, 2025, up from $4.2B a year prior. Remaining performance obligations totaled $15.8B as of July 31, 2025. The company sells through a direct sales force and channel partners including resellers, systems integrators, managed security service providers, and cloud marketplaces such as AWS, Azure, and Google Cloud.

Revenue model

Subscription and support contracts (80.5% of FY2025 revenue, $7.4B) plus hardware product sales (19.5%, $1.8B). Subscriptions include cloud-delivered security services sold under recurring contracts. Hardware includes physical and virtual next-generation firewalls, with VM-Series virtual firewalls also sold under usage-based licensing via cloud marketplaces.

Products and services

Next-generation firewalls (hardware and VM-Series virtual), Cloud NGFW, cloud-delivered security subscriptions, and support services. Virtual firewalls are available on AWS Marketplace, Microsoft Azure Marketplace, Google Cloud Marketplace, and Oracle Cloud Marketplace.

Customers and end markets

Enterprise customers across industries, reached primarily through a direct sales force and channel partners including resellers, global and regional systems integrators, service providers, managed security service providers, and cloud hosting service providers. No individual customer concentration disclosures were cited in the filing excerpts provided.

Value-chain role

Security platform vendor and software publisher sitting between component suppliers and enterprise end-customers. Sells direct and through channel partners. Hardware manufacturing is outsourced; components sourced from suppliers concentrated in Asia.

Geographic exposure

Global operations with hardware supply chain concentrated in Asia. No specific revenue breakdown by geography was provided in the filing excerpts.

Competitors

Cisco Systems, Microsoft, Alphabet, Check Point Software Technologies, Fortinet, CrowdStrike Holdings, Zscaler, Wiz

Source: SEC 10-K, filed 2025-08-29

Industry: Computer Peripheral Equipment, NEC Peers: Microsoft Corp CrowdStrike Holdings, Inc. Fortinet Inc McAfee Corp. Gen Digital Inc Oracle Corp ServiceNow Inc VMWARE LLC Zscaler Inc