Palo Alto’s Revenue by Segment (2016 – 2023)

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This statistic highlights Palo Alto’s Revenue by Segment, split between Subscription and Support, and Product, reported on a quarterly basis from Q4 2016 onwards. 

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This statistic highlights Palo Alto’s Revenue by Segment, split between Subscription and Support, and Product, reported on a quarterly basis from Q4 2016 onwards.

Palo Alto’s Revenue by Segment 

The following table highlights Palo Alto Network Inc.’s Revenue by Segment for Q1 2021, Q4 2021, and Q1 2022:

Segment Q1 2021  Q4 2021  Q1 2022  Contribution in Q1 2022
Subscription and Support $708.70 $879.90 $951.90 76%
Product $237.30 $339.40 $295.50 24%
Total $946 $1,219.30 $1,247.40 100%

(All figures in millions, except percentages)

On a QoQ basis, Palo Alto’s total revenue increased from $1,219.3 million in Q4 2021 to $1,247.4 million in Q1 2022, which was an increase of 2.3%. However, on a YoY basis, the company’s total revenue increased from $946 million in Q 2021 to $1,247.4 million in Q1 2022, which was an increase of 31.8%.

Subscription and Support Revenue

Subscription and support revenue comprises a major proportion of the company’s revenue. This revenue is mainly derived from the sales of subscriptions and support-related offerings. These subscriptions provide end customers with access to:

  • the latest antivirus,
  • intrusion prevention,
  • web filtering,
  • modern malware prevention,
  • data loss prevention, among others.

When end-customers purchase the company’s physical or virtual firewall appliances, or certain cloud offerings, they even purchase support in order to receive ongoing security updates, bug fixes, and repairs. In addition, end customers also purchase other subscriptions on a per-user, per-endpoint, or capacity-based basis. Palo Alto also offers professional services, including incident response, risk management, and digital forensic services.

Palo Alto’s contractual subscription and support contracts generally vary over a period of one to five years. The revenue generated is recognized from subscriptions and support over time, as and when the services are performed. As a percentage of total revenue, it is expected that this revenue will vary each quarter and increase over the long term. As new subscriptions are introduced, existing subscriptions are renewed along with support contracts, more revenue is expected to be generated.

On a QoQ basis, the revenue from this vertical increased by 8.2%. However, on a YoY basis, there was an increase of 34.3%. This increase was due to increased demand for their subscription and support offerings from both – new as well as existing end-customers.

Product Revenue

Product revenue is derived primarily from sales of Palo Alto’s appliances. This mainly includes the company’s ML-Powered Next-Generation Firewall, which is available in several form factors, such as physical, virtual, and containerized appliances. This firewall also incorporates the PAN-OS operating system, which provides a consistent set of capabilities across the entire network security product line.

Product revenue also comprises of revenue generated from software licenses of the VM-Series and Panorama . The company’s appliances and software licenses include a broad set of built-in networking and security features and functionalities. These appliances and software licenses include a broad set of built-in networking and security features and functionalities. Product revenue is recognized at the time of hardware shipment or when the delivery of software license take place.

On a QoQ basis, there was a decrease of 12.9% in the revenue generated. However, on a YoY basis, there was an increase of 24.5% in the revenue generated.

About the Company

Palo Alto Network Inc. (NASDAQ: PANW) is an American cybersecurity company, headquartered in Santa Clara, California. It was established in March 2005 under the laws of the State of Delaware and commenced operations in April 2005. The core products offered by the company are platforms that include advanced firewalls and cloud-based products. These further extend to those firewalls that cover other aspects of security. It delivers cybersecurity products covering a broad range of use cases, enabling its customers to secure their networks, branch locations (including remote and hybrid workforces), and public and private clouds, and to progress their Security Operations Centers (SOC). 

In 2018, Palo Alto Networks was ranked 8th in the Forbes Digital 100. Nikesh Arora, former Google and SoftBank executive, joined the company in June 2018 as Chairman and CEO. The company serves more than 70,000 organizations in more than 150 countries, including 85 of the Fortune 100 companies. 

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