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This statistic highlights Palo Alto Networks’ Revenue Breakdown, split across Subscription and Support, and Product, reported on a quarterly basis from Q4 2016 onwards.
|Business Verticals||Q2 2021||Q1 2022||Q2 2022||Revenue Mix by Business Vertical in Q2 2022|
|Subscription and Support||$762.20||$951.90||$1,008.90||77%|
(All values are in millions, apart from percentages)
Total revenue for Palo Alto Network increased from $1,016.9 million in Q2 2021 to $1,316.90 million in Q2 2022, indicating a rise of 29.5% on a year-on-year basis. Moreover, it inclined by 5.5% as compared to $1,247.4 million in Q1 2022, on a quarterly basis.
The growth reflects the increased adoption of the company’s portfolio, which consists of products, subscriptions, and support. Palo Alto Network considers its portfolio to have advantages from recurring revenues as the installed end-customer base grows continuously. As of January 31, 2022, the company had end-customers in over 170 countries. The end-customers represent a broad range of industries, including education, energy, financial services, government entities, healthcare, Internet and media, manufacturing, public sector, and telecommunications, and consist almost all of the Fortune 100 companies and most of the Global 2000 companies around the globe.
The company’s total revenue is divided into the following business verticals:
Subscription and Support
The subscriptions provide the end-customers with near-real-time access to the latest antivirus, intrusion prevention, web filtering, modern malware prevention, data loss prevention, and cloud access security broker capabilities across the network, endpoints, and the cloud. When end-customers purchase the physical, virtual, or container firewall appliances, or certain cloud offerings, they typically purchase support in order to receive ongoing security updates, upgrades, bug fixes, and repairs. Additionally, to the subscriptions purchased with these appliances, end-customers may also buy other subscriptions on a per-user, per-endpoint, or capacity-based basis. The company also offers professional services, including incident response, risk management, and digital forensic services.
Revenue generated from the Subscription and Support segment increased significantly from $762.2 million in Q2 2021 to $1,008.9 million in Q2 2022, marking a growth of 32.4% on a yearly basis. It also grew from $951.9 million in Q1 2022 to $1,008.9 million in Q2 2022. This was an incline of 6% on a quarterly basis. Palo Alto Network generates the majority of its revenue from this segment only. The contribution of the Subscription and Support segment to the company’s total revenue for the period Q2 2022 stood at 77%.
The increase in revenue was due to increased demand for subscription and support offerings from the end-customers. The mix between subscription revenue and support revenue will fluctuate over time, depending on the introduction of new subscription offerings, renewals of support services, and the ability to increase sales to new and existing end-customers.
Product revenue is derived from sales of the appliances, primarily the ML-Powered Next-Generation Firewall, which is available in a number of form factors, including as physical, virtual, and containerized appliances. Product revenue also comprises revenue earned from software licenses for Panorama. The appliances and software licenses include a broad set of built-in networking and security features and functionalities.
Palo Alto Network’s Product segment comprises 23% of the company’s total revenue for the period Q2 2022. Revenue from Products increased from $254.7 million in Q2 2021 to $308 million in Q2 2022, witnessing a rise of 20.9% on a year-on-year basis. Additionally, it grew slightly by 4.2% as compared to $295.5 million in Q1 2022, on a quarter-on-quarter basis. The growth was primarily due to increased demand for new and existing product offerings.
Incorporated in 2005, Palo Alto Networks, Inc. is a worldwide cybersecurity supplier with a mission of a world where each day is safer and more secure than the one before. The company empowers enterprises, service providers, and government entities to secure all users, applications, data, networks, clouds and devices with comprehensive visibility and context continuously across all locations. It delivers cybersecurity products covering a broad range of use cases, enabling end-customers to secure their networks, remote and hybrid workforces, branch locations, and public and private clouds, and to advance their Security Operations Centers (SOCs). The company operates in five fundamental areas: Zero Trust Network Security, Cloud Security, Secure Access Service Edge, Security Analytics and Automation, and Threat Intelligence and Security Consulting.
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