How sustainable is PANW's net profit turnaround since 2023?

Palo Alto Networks (PANW) has demonstrated a significant net profit turnaround since 2023, driven by robust revenue growth, strategic shifts towards subscription and support services, and improved operational efficiency.

1. **Consistent Financial Performance**: PANW has shown strong financial performance, with revenue reaching $8.29 billion over the last twelve months, marking a 15% year-over-year growth. In its most recent quarter, the company reported non-GAAP earnings per share of $1.56 on revenue of $2.14 billion, reflecting a 14% year-over-year increase.

|code|Ticker|Name|Date|Net Income YoY|Net Income|market_code|
|---|---|---|---|---|---|---|
|PANW|PANW.O|Palo Alto Networks|2024 Q3|158.62708719851577|2.788E8|185|
|PANW|PANW.O|Palo Alto Networks|2024 Q4|57.092665788317966|3.577E8|185|
|PANW|PANW.O|Palo Alto Networks|2025 Q1|80.5870236869207|3.507E8|185|
|PANW|PANW.O|Palo Alto Networks|2025 Q2|-84.69860896445131|2.673E8|185|

2. **Strategic Shifts**: The company's strategic pivot towards subscription and support services is evident, with these services accounting for 80% of the revenue. This shift has contributed to the substantial increase in gross profit margin to 74.3% and the strong recovery of operating income to $683.9 million.
3. **Innovation and Product Expansion**: PANW's commitment to innovation is underscored by the introduction of new products such as Prisma Cloud Darwin and Cortex XSIAM 2.0. This product expansion has not only strengthened the company's market position but also attracted new clients, with approximately 70 new platformization customers added in the recent quarter.
4. **Market Leadership and Partnerships**: PANW's leadership in the cybersecurity industry, strengthened by partnerships like the one with the NHL, has likely contributed to the company's 3.74% share price increase over the past week. The company's international expansion and recent deals in regions like EMEA and JPAC have broadened its market presence.
5. **Insider Confidence**: Institutional investors like Park Avenue Securities LLC have increased their positions in PANW, indicating confidence in the company's growth potential. However, insider transactions show that some directors have sold shares, which could suggest a need for caution.

In conclusion, PANW's net profit turnaround since 2023 appears to be sustainable, based on the company's strong financial performance, strategic shifts, innovation, market leadership, and partnerships. However, the insider transactions and market fluctuations warrant close monitoring for investors.