Palo Alto Networks Inc
For the period ended Jul 31, 2026. Filed Sep 10, 2026.
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FY2026 · Filed Sep 10, 2026
PANW$326.36-1.4%Stored close · as of Nov 10, 2026
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Item 8. Consolidated Statements of Cash Flows
| CONSOLIDATED STATEMENTS OF CASH FLOWS(In millions) | |||
|---|---|---|---|
| Year Ended July 31, | |||
| 2026 | 2025 | 2024 | |
| Cash flows from operating activities | |||
| Net income | $307 | $1,134 | $2,578 |
| Adjustments to reconcile net income to net cash provided by operating activities: | |||
| Share-based compensation for equity-based awards | 1,774 | 1,295 | 1,076 |
| Deferred income taxes | (19) | (350) | (2,034) |
| Depreciation and amortization | 855 | 343 | 284 |
| Amortization of deferred contract costs | 590 | 481 | 446 |
| Amortization of debt issuance costs | — | 1 | 3 |
| Change in fair value of convertible senior notes and capped calls | 562 | — | — |
| Change in fair value of contingent consideration liability | (117) | (135) | — |
| Reduction of operating lease right-of-use assets | 75 | 65 | 56 |
| Amortization of investment premiums, net of accretion of purchase discounts | (54) | (41) | (60) |
| Unrealized foreign currency exchange (gains) losses, net | 1 | — | — |
| Changes in operating assets and liabilities, net of effects of acquisitions: | |||
| Accounts receivable, net | (335) | (345) | (155) |
| Financing receivables, net | 181 | 191 | (866) |
| Deferred contract costs | (795) | (555) | (490) |
| Prepaid expenses and other assets | (139) | 88 | (134) |
| Accounts payable | 43 | 107 | (15) |
| Accrued compensation | 327 | 51 | 4 |
| Accrued and other liabilities | 95 | 147 | 385 |
| Deferred revenue | 1,202 | 1,239 | 2,180 |
| Net cash provided by operating activities | 4,553 | 3,716 | 3,258 |
| Cash flows from investing activities | |||
| Purchases of investments | (3,694) | (3,696) | (3,551) |
| Proceeds from sales of investments | 3,489 | 1,197 | 956 |
| Proceeds from maturities of investments | 2,204 | 1,595 | 1,853 |
| Business acquisitions, net of cash and restricted cash acquired | (4,663) | (1,054) | (611) |
| Purchases of property, equipment, and other assets | (440) | (247) | (157) |
| Net cash used in investing activities | (3,104) | (2,205) | (1,510) |
| Cash flows from financing activities | |||
| Repayments and settlement of conversions of convertible senior notes | (160) | (966) | (1,033) |
| Proceeds from capped calls related to convertible senior notes | 10 | — | — |
| Repurchases of common stock | (1,000) | — | (567) |
| Proceeds from sales of shares through employee equity incentive plans | 265 | 371 | 283 |
| Payments for taxes related to net share settlement of equity awards | (126) | (184) | (26) |
| Payments of contingent consideration liability | (191) | — | — |
| Net cash used in financing activities | (1,202) | (779) | (1,343) |
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (3) | — | — |
| Net increase in cash, cash equivalents, and restricted cash | 244 | 732 | 405 |
| Cash, cash equivalents, and restricted cash—beginning of period | 2,279 | 1,547 | 1,142 |
| Cash, cash equivalents, and restricted cash—end of period | $2,523 | $2,279 | $1,547 |
| Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets | |||
| Cash and cash equivalents | $2,514 | $2,269 | $1,535 |
| Restricted cash included in prepaid expenses and other current assets | 5 | 10 | 12 |
| Restricted cash included in other assets | 4 | — | — |
| Total cash, cash equivalents, and restricted cash | $2,523 | $2,279 | $1,547 |
| Non-cash investing and financing activities | |||
| Equity consideration for business acquisitions | $(18,862) | $(27) | $(27) |
| Contingent consideration for a business acquisition | $— | $(649) | $— |
| Supplemental disclosures of cash flow information | |||
| Cash paid for income taxes | $199 | $505 | $342 |
| Cash paid for contractual interest | $— | $2 | $6 |
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