Can PANW maintain its operating margin expansion trend?

**Palo Alto Networks (PANW) is poised to maintain its operating margin expansion trend**, considering the following points:

1. **Consistent Growth in Revenue and Profitability**: PANW has demonstrated a notable increase in revenue, with a 14% growth in the fiscal first quarter of 2025, reaching $2.1 billion. This growth in revenue has contributed to an increase in net income, which rose to $544.9 million, or $1.56 per diluted share[^5).
2. **Strategic Focus on Margin Expansion**: The company's strategic focus on platformization and the recognition of its security and AI outcomes are key drivers for margin expansion. This strategy has enabled PANW to increase its Next-Generation Security Annual Recurring Revenue (ARR) by 40% year-over-year to $4.5 billion.
3. **Improvement in Key Profitability Indicators**: PANW's gross margin, although low at 74.09%, has shown an improvement in profitability compared to its peers. The company's Earnings Per Share (EPS) also outshines the industry average, indicating a strong bottom-line trend.
4. **Financial Outlook and Guidance**: PANW's financial outlook for the fiscal year 2025 projects a Next-Generation Security ARR of $5.52 billion to $5.57 billion, reflecting a 14% year-over-year growth. The non-GAAP operating margin is expected to be between 27.5% and 28.0%, which is a clear indication of the company's focus on margin expansion.
5. **Insider Confidence**: The exercise of stock options by Nir Zuk, EVP at PANW, in a transaction valued at $494,663,904, suggests confidence in the company's future performance. This insider activity often serves as a bullish signal, indicating that those with the most knowledge of the company's prospects believe in its continued success.

In conclusion, PANW's historical performance, strategic initiatives, and financial outlook all point to the company's ability to maintain its operating margin expansion trend.