Palo Alto : Q4 FY2023 Earnings Call Presentation

Q4 Fiscal Year 2023

Earnings Call & Medium Term Update

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Q4 Fiscal Year 2023 Earnings Call

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Safe Harbor

This presentation contains "forward-looking" statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, including statements related to our financial guidance for the first quarter of fiscal 2024 and fiscal year 2024, our financial estimates for fiscal years 2023 through 2026, our modeling points, our strategic plans, our achievements, our growth rates and growth prospects, our estimates of market sizes and opportunities, the performance and benefits of our products, our product development expectations, anticipated trends, business and economic conditions and challenges, and other financial, operational and business expectations. Many of these assumptions relate to matters that are beyond our control and changing rapidly.

There are a significant number of factors that could cause actual results to differ materially from forward-looking statements made in this presentation, including: developments and changes in general market, political, economic, and business conditions; risks associated with managing our growth; risks associated with new product, subscription and support offerings; shifts in priorities or delays in the development or release of new product or subscription offerings, or the failure to timely develop and achieve market acceptance of new products and subscriptions as well as existing products, subscription and support offerings; rapidly evolving technological developments in the market for security products, subscription and support offerings; our customers' purchasing decisions and the length of sales cycles; our competition; our ability to attract and retain new customers; our ability as an organization to acquire and integrate other companies, products, or technologies in a successful manner; our debt repayment obligations; and our share repurchase program, which may not be fully consummated or enhance shareholder value, and any share repurchases which could affect the price of our common stock. Further information on these and other factors that could affect the forward-looking statements we make in this presentation can be found in the documents that we file with or furnish to the U.S. Securities and Exchange Commission, including Palo Alto Networks' most recent Quarterly Report on Form 10-Q filed for the quarter ended April 30, 2023, which is available on our website at investors.paloaltonetworks.com and on the SEC's website at www.sec.gov. Additional information will also be set forth in other filings that we make with the SEC from time to time. All forward-looking statements in this presentation are based on our current beliefs and on information available to management as of the date hereof, and we do not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.

All information in this presentation is as of August 18, 2023. This presentation contains non-GAAP financial measures and key metrics relating to the company's past and expected future performance. We have not reconciled diluted non-GAAP earnings per share guidance to GAAP earnings per diluted share, non-GAAP operating margin to GAAP operating margin or adjusted free cash flow margin guidance to GAAP net cash from operating activities because we do not provide guidance on GAAP net income (loss) or net cash from operating activities and would not be able to present the various reconciling cash and non-cash items between GAAP and non-GAAP financial measures, including share-based compensation expense, without unreasonable effort.

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Nikesh Arora

CEO & Chairman

Q4 capped a strong year of execution

TOTAL REVENUEOPERATING MARGIN (NON-GAAP)DELIVERED AT OR ABOVE ALL INITIAL FY'23 GUIDANCE TARGETS

$1.95B		28.4%				OF 8/22/22	ACTUAL
						GUIDANCE AS
							RESULTS
+26% y/y		+760 bps y/y
			Total Billings 1	$8.95B - $9.05B	$9.19B
					+20%-21% yr/yr	+23%yr/yr
TOTAL BILLINGS		ADJ. FREE CASH FLOW (NON-GAAP)
$3.16B		$388M				+25% yr/yr	+25% yr/yr
					Total Revenue	$6.85B - $6.90B	$6.89B
+18% y/y		+46% y/y on trailing 12-month basis
			EPS	$3.13 - $3.17 2	$4.44
REMAINING PERFORMANCE OBLIGATION		EPS (NON-GAAP)		(Non-GAAP)	+24%-26% yr/yr	+76% yr/yr
$10.6B		$1.44
			(Non-GAAP)	33.5-34.5%	38.8%
				Adj. FCF Margin
+30% y/y		+80% y/y

1 Total billings is a key financial metric calculated as total revenue plus change in total deferred revenue, net of total acquired deferred revenue.
2 Non-GAAP Earnings Per Share for period Q4'22 adjusted to reflect the effect of the stock split executed on September 13, 2022
A reconciliation of forward-lookingnon-GAAP financial measures to the corresponding GAAP measures has not been provided as it is not available without unreasonable effort.	5
Fiscal year ending on July 31.