PALO ALTO NETWORKS, INC.

Red flags

• Future non-cancelable purchase commitments total $8.242 billion: $7.686 billion for cloud hosting, $370 million for manufacturing, and $186 million of other obligations; an additional $81 million cloud minimum extends through September 2027.
• CyberArk was excluded from the fiscal 2026 internal-control assessment; it represented 6% of consolidated revenue, 2% of total assets, and less than 1% of total net assets as of and for the year ended July 31, 2026.
• Flex is the primary EMS provider, while manufacturing contracts generally provide no guaranteed supply or fixed pricing; the Flex contract permits termination for convenience subject to notice.
• Financing receivables totaled $1.536 billion net at July 31, 2026, including $944 million long term; $43 million of amortized-cost receivables carried the lowest-quality internal risk ratings of 7 to 10.
• The company reported supply-chain disruption and higher memory and component costs in Q4 fiscal 2026, which reduced gross margin and may continue to do so.