Palo Alto Networks (PANW) 10-K risk factor changes: FY2021 vs FY2020

[removed: The recent] [added: - The ongoing] global COVID-19 outbreak could harm our business and results of [removed: operations.][added: operations.]

These measures include transitioning our employee population to work remotely from home beginning in March 2020, which [removed: is planned to continue] [added: continued] through the [removed: first quarter of] fiscal [removed: 2021] [added: year ended July 31, 2021,] and [removed: is likely to expand] [added: may continue] into future quarters.

Although we continue to monitor the situation and may adjust our current policies as more information and public health guidance become available, [added: including progress made through vaccinations,] these precautionary measures that we have adopted could negatively affect our customer success efforts, sales and marketing efforts, delay and lengthen our sales cycles, and create operational or other challenges, any of which could harm our business and results of operations.

In addition, COVID-19 may [added: continue to] disrupt the operations of our end-customers and channel partners for an indefinite period of time, including as a result of travel restrictions and/or business shutdowns, all of which could negatively impact our business and results of operations, including cash flows.

The [added: ongoing] impact of COVID-19 is fluid and uncertain, but it has caused and may continue to cause various negative effects, including an inability to meet with our [removed: actual] [added: existing] or potential end-customers; our end-customers deciding to delay or abandon their planned purchases; increased requests for delayed payment terms or product discounts by our end-customers and channel partners; us delaying, canceling, or withdrawing from user and industry conferences and other marketing events, including some of our own; changes in the demand [removed: of] [added: for] our products, which has caused us to reprioritize our engineering and research and development efforts and make changes to our original offering roadmap; and delays or possible disruptions in our supply chain.

More generally, the outbreak has not only significantly and adversely increased economic and demand uncertainty, but it has caused a global economic slowdown, and [removed: it is likely that it will cause a] [added: continuing] global [removed: recession] [added: economic uncertainty] which could [removed: likely] decrease technology spending and adversely affect demand for our offerings and harm our business and results of operations.

For example, from the end of fiscal [removed: 2019] [added: 2020] to the end of fiscal [removed: 2020,] [added: 2021,] our headcount increased from [removed: 7,014 to] 8,014 [added: to 10,473] employees.

[added: Failure to manage any future growth effectively could result in increased costs,] disrupt our existing end-customer relationships, reduce demand for or limit us to smaller deployments of our products, or harm our business performance and operating results.

- the budgeting cycles, seasonal buying patterns, and purchasing practices of our end-customers, including the likely slowdown in technology spending due to the [removed: recent] global economic downturn;

- changes in the growth rate of the enterprise security [removed: market;][added: industry;]

- our inability to execute, [removed: complete] [added: complete,] or integrate efficiently any acquisitions that we may undertake;

- our ability to manage cloud hosting [added: service] costs and scale the cloud-based subscription offerings;

- political, economic and social instability caused by the [removed: referendum in June 2016, in which voters in the] United [removed: Kingdom (the “U.K.”) approved an] [added: Kingdom’s] exit from the European Union [removed: (the “E.U.”) and the U.K. government subsequently notified the E.U. of its withdrawal, which is commonly referred to as “Brexit,”] [added: (“Brexit”),] continued hostilities in the Middle East, terrorist activities, [removed: and] any [removed: disruption] [added: disruptions] from COVID-19 and any disruption these events may cause to the broader global industrial economy; and

- general macroeconomic conditions, both domestically and in our foreign markets that could impact some or all regions where we operate, including the expected global economic [removed: slowdown] [added: slowdown, increased risk of inflation,] and potential global recession caused by the COVID-19 pandemic.

[removed: The sudden and significant] [added: - Ongoing] global economic [removed: downturn] [added: uncertainty] could have an adverse effect on our business and operating [removed: results.][added: results.]

The multinational efforts to contain the spread of COVID-19 have had a significant adverse effect on the global macroeconomic environment that [removed: could lead] [added: continues] to [removed: a global recession.][added: cause economic uncertainty.]

In addition, the instability in the global credit markets, [removed: the recent contraction of China’s economy,] falling demand for oil and other commodities, uncertainties regarding the effects of Brexit, uncertainties related to the timing of the lifting of governmental restrictions to mitigate the spread of COVID-19, [removed: uncertainties related to elections and] changes in public policies such as domestic and international regulations, taxes, or international trade agreements, international trade disputes, government shutdowns, geopolitical turmoil and other disruptions to global and regional economies and markets [removed: could] continue to add uncertainty to global economic conditions.

We have experienced revenue growth rates of [removed: 17.5%] [added: 24.9%] and [removed: 27.5%] [added: 17.5%] in fiscal [removed: 2020] [added: 2021] and fiscal [removed: 2019,] [added: 2020,] respectively.

As a result, we had an accumulated deficit of [removed: $1.2] [added: $1.7] billion as of July 31, [removed: 2020.][added: 2021.]

Our future success depends, in part, on our ability to expand the deployment of our portfolio with existing end-customers and create demand for our new offerings, including cloud security, [removed: AI] [added: AI,] and analytics offerings.

[added: This may require increasingly sophisticated] and costly sales efforts that may not result in additional sales.

Our end-customers’ renewal rates may decline or fluctuate as a result of a number of factors, including their level of satisfaction with our [removed: subscriptions and our support offerings, the frequency and severity of subscription outages, our product uptime or latency, and the pricing of our, or competing, subscriptions.]

The [removed: market] [added: industry] for enterprise security products is intensely competitive, and we expect competition to increase in the future from established competitors and new market entrants.

- startups and single-vertical vendors that offer independent or emerging solutions [removed: in network;][added: across various areas of security;]

Organizations that use legacy products and services may believe that these products and services are sufficient to meet their security needs or that our offerings only serve the needs of a portion of the enterprise security [removed: market.][added: industry.]

As a result, these organizations may prefer to purchase from their existing suppliers rather than add or switch to a new supplier such as [removed: us] [added: us,] regardless of product performance, features, or greater services offerings or may be more willing to incrementally add solutions to their existing security infrastructure from existing suppliers than to replace it wholesale with our solutions.

Some of our competitors have made or could make acquisitions of businesses that may allow them to offer more directly competitive and comprehensive solutions than they had previously offered and adapt more quickly [removed: to new technologies and end-customer needs.]

In addition to traditional computer “hackers,” malicious code (such as viruses and worms), phishing attempts, employee theft or misuse, and denial of service attacks, sophisticated nation-state and nation-state supported actors engage in intrusions and attacks (including advanced persistent threat intrusions) and add to the risks to our internal networks, [removed: cloud deployed] [added: cloud-deployed] enterprise and [removed: customer facing] [added: customer-facing] environments and the information they store and process.

Further, we believe that a critical contributor to our success and our ability to retain highly skilled personnel has been our corporate culture, which we believe fosters innovation, [added: inclusion,] teamwork, passion for end-customers, focus on execution, and the facilitation of critical knowledge transfer and knowledge sharing.

[removed: If] [added: - If] we are not successful in executing our strategy to increase sales of our [removed: products and] [added: products,] subscriptions [added: and support offerings] to new and existing medium and large enterprise end-customers, our operating results may [removed: suffer.][added: suffer.]

[added: Finally, large enterprises typically have longer implementation cycles, require] greater product functionality and scalability and a broader range of services, demand that vendors take on a larger share of risks, sometimes require acceptance provisions that can lead to a delay in revenue recognition, and expect greater payment flexibility from vendors.

Subscription and support revenue accounts for a significant portion of our revenue, comprising [removed: 68.8%] [added: 73.7%] of total revenue in fiscal [removed: 2020, 62.2%] [added: 2021, 68.8%] of total revenue in fiscal [removed: 2019,] [added: 2020,] and [removed: 61.3%] [added: 62.2%] of total revenue in fiscal [removed: 2018.][added: 2019.]

[removed: Defects,] [added: - Defects,] errors, or vulnerabilities in our products, subscriptions, or support offerings, the failure of our products or subscriptions to block a virus or prevent a security [removed: breach,] [added: breach or incident,] misuse of our products, or risks of product liability claims could harm our reputation and adversely impact our operating [removed: results.][added: results.]

[removed: We] maintain insurance to protect against certain claims associated with the use of our products and subscriptions, but our insurance coverage may not adequately cover any claim asserted against us.

We may not be able to incentivize these channel partners to sell our products and subscriptions to end-customers [removed: and] [added: and,] in particular, to large enterprises.

[removed: If] [added: - If] we do not accurately predict, prepare for, and respond promptly to rapidly evolving technological and market developments and successfully manage product and subscription introductions and transitions to meet changing end-customer needs in the enterprise security [removed: market,] [added: industry,] our competitive position and prospects will be [removed: harmed.][added: harmed.]

The enterprise security [removed: market] [added: industry] has grown quickly and is expected to continue to evolve rapidly.

In 2019, we announced our new cloud security [removed: offerings,] [added: offerings] for securing access to the cloud (Prisma), and our security offerings for securing the future of security operations (Cortex).

While we have historically been successful in developing, acquiring, and marketing new products and product enhancements that respond to technological change and evolving industry standards, we may not be able to continue to do [removed: so] [added: so,] and there can be no assurance that our new or future offerings will be successful or will achieve widespread market acceptance.

[removed: If we experience] unanticipated delays in the availability of new products, [removed: features,] [added: features] and subscriptions, and fail to meet customer expectations for such availability, our competitive position and business prospects will be harmed.

RISK FACTOR SUMMARY

Our business is subject to numerous risks and uncertainties.

These risks include, but are not limited to, the following:

- Our business and operations have experienced growth in recent periods, and if we do not effectively manage any future growth or are unable to improve our systems, processes, and controls, our operating results could be adversely affected.

- Our operating results may vary significantly from period to period and be unpredictable, which could cause the market price of our common stock to decline.

- Our revenue growth rate in recent periods may not be indicative of our future performance.

- We have a history of losses, anticipate increasing our operating expenses in the future, and may not be able to achieve or maintain profitability or maintain or increase cash flow on a consistent basis, which could cause our business, financial condition, and operating results to suffer.

- If we are unable to sell new and additional product, subscription, and support offerings to our end-customers, our future revenue and operating results will be harmed.

- We face intense competition in our market and we may lack sufficient financial or other resources to maintain or improve our competitive position.

- A network or data security incident may allow unauthorized access to our network or data, harm our reputation, create additional liability, and adversely impact our financial results.

- Reliance on shipments at the end of the quarter could cause our revenue for the applicable period to fall below expected levels.

- Seasonality may cause fluctuations in our revenue.

- If we are unable to hire, integrate, train, retain, and motivate qualified personnel and senior management, our business could suffer.

- We rely on revenue from subscription and support offerings, and because we recognize revenue from subscription and support over the term of the relevant service period, downturns or upturns in sales of these subscription and support offerings are not immediately reflected in full in our operating results.

- False detection of applications, viruses, spyware, vulnerability exploits, data patterns, or URL categories could adversely affect our business.

- We rely on our channel partners to sell substantially all of our products, including subscriptions and support, and if these channel partners fail to perform, our ability to sell and distribute our products and subscriptions will be limited, and our operating results will be harmed.

- Our current research and development efforts may not produce successful products, subscriptions, or features that result in significant revenue, cost savings or other benefits in the near future, if at all.

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- Because we depend on manufacturing partners to build and ship our products, we are susceptible to manufacturing and logistics delays and pricing fluctuations that could prevent us from shipping customer orders on time, if at all, or on a cost-effective basis, which may result in the loss of sales and end-customers.

- Managing the supply of our products and product components is complex.

Insufficient supply and inventory may result in lost sales opportunities or delayed revenue, while excess inventory may harm our gross margins.

- Because some of the key components in our products come from limited sources of supply, we are susceptible to supply shortages or supply changes, which could disrupt or delay our scheduled product deliveries to our end-customers and may result in the loss of sales and end-customers.

- We generate a significant amount of revenue from sales to distributors, resellers, and end-customers outside of the United States, and we are therefore subject to a number of risks associated with international sales and operations.

- We are exposed to fluctuations in currency exchange rates, which could negatively affect our financial condition and operating results.

- We are exposed to the credit and liquidity risk of some of our channel partners and end-customers, and to credit exposure in weakened markets, which could result in material losses.

- A portion of our revenue is generated by sales to government entities, which are subject to a number of challenges and risks.

- Our ability to sell our products and subscriptions is dependent on the quality of our technical support services and those of our channel partners, and the failure to offer high-quality technical support services could have a material adverse effect on our end-customers’ satisfaction with our products and subscriptions, our sales, and our operating results.

- Claims by others that we infringe their proprietary technology or other rights could harm our business.

- Our proprietary rights may be difficult to enforce or protect, which could enable others to copy or use aspects of our products or subscriptions without compensating us.

- Our use of open source software in our products and subscriptions could negatively affect our ability to sell our products and subscriptions and subject us to possible litigation.

- We license technology from third parties, and our inability to maintain those licenses could harm our business.

- Our failure to adequately protect personal information could have a material adverse effect on our business.

- We face risks associated with having operations and employees located in Israel.

- We are subject to governmental export and import controls that could subject us to liability or impair our ability to compete in international markets.

- Our failure to raise additional capital or generate the significant capital necessary to expand our operations and invest in new products and subscriptions could reduce our ability to compete and could harm our business.

- We have a corporate structure aligned with the international nature of our business activities, and if we do not achieve increased tax benefits as a result of our corporate structure, our financial condition and operating results could be adversely affected.

- Our charter documents and Delaware law, as well as certain provisions contained in the indentures governing our Notes, could discourage takeover attempts and lead to management entrenchment, which could also reduce the market price of our common stock.

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The ongoing global COVID-19 outbreak could harm our business and results of operations.

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Failure to manage any future growth effectively could result in increased costs,

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This may require increasingly sophisticated

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These risks may increase due to COVID-19.

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Due to COVID-19, we slowed hiring in the third quarter of 2020, which could adversely affect our ability to retain qualified personnel.

Finally, large enterprises typically have longer implementation cycles, require

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For example, in March 2018, we acquired Evident.io, Inc., in April 2018, we acquired Cyber Secdo Ltd. (“Secdo”), in October 2018, we acquired RedLock, in March 2019, we acquired Demisto, in June 2019, we acquired PureSec, in July 2019, we acquired Twistlock, in September 2019, we acquired Zingbox, in December 2019, we acquired Aporeto and in April 2020, we acquired CloudGenix.

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Any agreements arising out of negotiations which the U.K. government makes to retain access to E.U. markets may lead to greater restrictions on the free movement of goods, services, people and capital between the U.K. and the remaining E.U. member states.

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For fiscal 2020, four distributors represented 68.8% of our total revenue and as of July 31, 2020, one distributor represented 31.5% of our gross accounts receivable.

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required to create the innovative products that have enabled us to be successful to date.

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future, particularly if emergency circumstances or an escalation in the political situation occurs.

The GDPR requires, among other things, that personal data only be transferred outside of the E.U. to certain jurisdictions, including the United States, if steps are taken to legitimize those data transfers.

Both the E.U.-U.S. Privacy Shield and these model contractual clauses have been subject to legal challenge.

We are in the process of analyzing the recent “Schrems II” decision by the Court of Justice of the European Union and its impact on our data transfer mechanisms.

In the U.K., a Data Protection Act that substantially implements the GDPR also became law in May 2018.

It remains unclear, however, how this act and other U.K. data protection laws or regulations will develop in the medium to longer term and how data transfers to and from the United Kingdom will be regulated after Brexit.

Moreover, a new privacy law, the California Privacy Rights Act (“CPRA”) was recently certified by the California Secretary of State to appear on the ballot for the November 3, 2020 election.

If this initiative is approved by California voters, the CPRA would significantly modify the CCPA, potentially resulting in further uncertainty and requiring us to incur additional costs and expenses in an effort to comply.

Other states have also expanded their data protection laws.

Evolving and changing definitions of personal data and personal information, within the E.U., the United

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None of our 2019 Notes remained outstanding as of July 31, 2019.

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efficiencies that we anticipate as a result of the structure and our future financial condition and operating results may be negatively impacted.

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RoHS requirements.

- Results of Operations. A discussion of the nature and trends in our financial results and an analysis of our financial results comparing fiscal [removed: 2020] [added: 2021] to [removed: 2019.][added: fiscal 2020.]

For discussion and analysis related to our financial results comparing fiscal [removed: 2019] [added: 2020] to [removed: 2018,] [added: 2019,] refer to Part II, Item 7.

[removed: Management's] [added: Management’s] Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for fiscal [removed: 2019,] [added: 2020,] which was filed with the Securities and Exchange Commission on September [removed: 9, 2019.][added: 4, 2020.]

- Contractual Obligations and Commitments. An overview of our contractual obligations, contingent liabilities, commitments, and off-balance sheet arrangements outstanding as of July 31, [removed: 2020,] [added: 2021,] including expected payment schedules.

We empower enterprises, service providers, and government entities to secure all users, applications, data, [removed: networks] [added: networks, clouds] and devices with comprehensive visibility and context continuously across all locations.

We deliver cybersecurity products covering a broad range of use cases, enabling our end-customers to secure their networks, remote [removed: workforce, access to the service edge,] [added: and hybrid workforces,] branch locations, [added: and] public and private clouds, and to advance their Security Operations Centers (“SOC”).

We do this with solutions focused on delivering value in [removed: three] [added: five] fundamental areas:

- [removed: Secure the] [added: Enabling zero trust] network [added: security] through our [removed: ML-powered] [added: ML-Powered] Next-Generation Firewalls, available in a number of form factors, including physical, [removed: virtual] [added: virtual,] and containerized appliances, as well as a cloud-delivered [removed: service, with Panorama management available as an appliance or as a virtual machine for the public or private cloud.][added: service.]

This also includes [removed: security services] [added: our add-on Cloud-Delivered Security Services,] such as Threat Prevention, WildFire, URL Filtering, [added: Advanced URL Filtering,] DNS Security, IoT Security, GlobalProtect, [removed: SD-WAN and] [added: SD-WAN, Enterprise] Data Loss Prevention [removed: that are delivered as] [added: (“Enterprise DLP”),] SaaS [removed: subscriptions to] [added: Security API and SaaS Security Inline that secure content, applications, users, and devices across] our [removed: ML-powered] [added: ML-Powered] Next-Generation [removed: Firewalls.][added: Firewalls, Prisma, and Cortex product lines, to enable best-in-class security across a broad range of applications.]

For fiscal [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] total revenue was [removed: $3.4] [added: $4.3] billion and [removed: $2.9] [added: $3.4] billion, respectively, representing year-over-year growth of [removed: 17.5%.][added: 24.9%.]

As of July 31, [removed: 2020,] [added: 2021,] we had end-customers in over 170 countries.

We [added: primarily] use a two-tiered, indirect fulfillment model whereby we sell our products, subscriptions, and support to our distributors, which, in turn, sell to our resellers, which then sell to our end-customers.

Our product revenue was $1.1 billion or [removed: 31.2%] [added: 26.3%] of total revenue for fiscal [removed: 2020,] [added: 2021,] representing [removed: a slight decrease] year-over-year [added: growth] of [removed: 2.9%.][added: 5.3%.]

Product revenue is generated from sales of our appliances, primarily our [removed: ML-powered] [added: ML-Powered] Next-Generation Firewall, which is available in a number of form factors, including as physical, [removed: virtual] [added: virtual,] and containerized appliances.

Our [removed: ML-powered] [added: ML-Powered] Next-Generation Firewall incorporates our PAN-OS operating system, which provides a consistent set of capabilities across our entire [added: network security] product line.

Our products are designed for different performance requirements throughout an organization, ranging from our [removed: PA-220,] [added: PA-410,] which is designed for small organizations and remote or branch offices, to our top-of-the-line PA-7080, which is designed for [removed: large scale] [added: large-scale] data centers and service provider use.

The same firewall functionality that is delivered in our physical appliances is also available in our VM-Series virtual firewalls, which secure virtualized and cloud-based computing [removed: environments] [added: environments,] and in our CN-Series container firewalls, which [removed: secures] [added: secure] container environments and traffic.

Our subscription and support revenue grew to [removed: $2.3] [added: $3.1] billion or [removed: 68.8%] [added: 73.7%] of total revenue for fiscal [removed: 2020,] [added: 2021,] representing year-over-year growth of [removed: 30.0%.][added: 33.8%.]

Our subscriptions provide our end-customers with near real-time access to the latest antivirus, intrusion prevention, web filtering, [removed: and] modern malware [removed: prevention] [added: prevention, data loss prevention, and cloud access security broker] capabilities across the network, endpoints, and the cloud.

When end-customers purchase our physical, [removed: virtual] [added: virtual,] or container firewall appliances, [added: or certain cloud offerings,] they typically purchase support in order to receive ongoing security updates, upgrades, bug fixes, and repairs.

Additionally, we acquired productive investments that [added: we believe] fit well within our long-term strategy.

To manage any future growth effectively, we must continue to improve and expand our information technology and financial infrastructure, our operating and administrative [removed: systems and controls, and our ability to manage headcount, capital, and processes in an efficient manner.]

We are actively monitoring, [removed: evaluating] [added: evaluating,] and responding to developments relating to COVID-19, which has [added: resulted in] and is expected to [added: continue to] result in continued significant [removed: global social] [added: global, social,] and business disruption.

As described in “Impacts of COVID-19 on our Business” included in Part I, Item 1 Business in this Annual Report, we have made some changes to our business [removed: that include] [added: including] instituting a global work-from-home policy beginning in March 2020 [removed: that] [added: and adopting our FLEXWORK initiative in fiscal 2021, which] did not incur significant disruptions in our work operations during fiscal [removed: 2020.][added: 2020 and fiscal 2021.]

We will continue to actively monitor the [removed: situation] [added: situation, including progress made through vaccinations,] and [added: we] will make further changes to our business operations as may be required by federal, [removed: state] [added: state,] or local authorities or that we determine are in the best interests of our employees, end-customers, partners, [removed: suppliers] [added: suppliers,] and stockholders.

Our focus remains on the safety of our employees, [removed: striving] [added: and we strive] to protect the health and well-being of the communities in which we operate, [removed: and] [added: in part, by] providing technology to our employees, [removed: end-customers] [added: end-customers,] and partners to help them do their best work while remote.

Although some end-customers adopted Prisma Access as their secure work-from-home solution for the longer term, [removed: COVID-19] [added: there continues to be uncertainty regarding the business outlook due to COVID-19, which] may curtail our [removed: end-customers'] [added: end-customers’] spending and could lead them to delay or defer purchasing decisions, and lengthen sales cycles and payment terms, which could materially adversely impact our business, results of [removed: operations] [added: operations,] and overall financial performance.

Also, certain of our end-customers or partners may be or may become credit or cash [removed: constrained] [added: constrained,] making it difficult for them to fulfill their payment obligations to us.

[added: The extent of the impact of COVID-19 on our operational and financial performance will depend on] developments, including the duration and spread of the [removed: virus,] [added: virus (including variants),] impact on our end-customers’ spending, volume of sales and length of our sales cycles, impact on our partners, [removed: suppliers] [added: suppliers,] and employees, actions that may be taken by governmental [removed: authorities] [added: authorities,] and other factors identified in Part I, Item 1A [removed: "Risk Factors"] [added: “Risk Factors”] in this Form 10-K.

Given the dynamic nature of these circumstances, the full impact of COVID-19 on our ongoing business, results of [removed: operations] [added: operations,] and overall financial performance cannot be reasonably estimated at this time.

We discuss revenue, gross margin, and the components of operating loss and margin below under [removed: “—Results] [added: “Results] of Operations.”

| | | | July 31, | | | | | | | | | [removed: | | | | | |]

| | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [added: 2019] | | |

| Total deferred revenue | | | $ | [removed: 3,810.2] [added: 5,024.0] | | | | | $ | [removed: 2,888.7 | | | | | |] [added: 3,810.2] | |

| Cash, cash equivalents, and investments | | | $ | [removed: 4,302.2] [added: 3,789.4] | | | | | $ | [removed: 3,378.5 | | | | | |] [added: 4,302.2] | |

| | | | Year Ended July 31, | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | |]

| | | | [removed: 2020 | | | | | | 2019 | | | | | | 2018] [added: 2021] | | | | | | [added: 2020] | | | | | | [added: 2019] | | |

| | | | (dollars in millions) | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | |]

| Total revenue | | | $ | [removed: 3,408.4] [added: 4,256.1] | | | | | $ | [removed: 2,899.6] [added: 3,408.4] | | | | | $ | [removed: 2,273.6 | | | | | | | | | | | |] [added: 2,899.6] | |

| Total revenue year-over-year percentage increase | | | [removed: 17.5] [added: 24.9] | | % | | | | [removed: 27.5] [added: 17.5] | | % | | | | [removed: 29.5] [added: 27.5] | | % | [removed: | | | | | | | | | | | |]

Zero Trust Network Security:

Panorama, our network security management solution, available as hardware or virtual machine, can centrally manage all of our firewalls irrespective of their form factor, location, or scale.

Cloud Security:

- Enabling cloud security through our Prisma security offerings.

Prisma Cloud, the industry’s most comprehensive Cloud Native Security Platform (“CNSP”), secures multi- and hybrid-cloud environments and cloud native applications, integrating security across the full deployment lifecycle.

VM-Series and CN-Series enforce in-line network security in multi- and hybrid-cloud environments.

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Secure Access Service Edge:

- Prisma Access, the industry’s most complete cloud-delivered security platform, together with Prisma SD-WAN, SaaS Security API and SaaS Security Inline, provide a comprehensive Secure Access Service Edge (“SASE”) offering that is used to secure remote workforces and enable the cloud-delivered branch.

Security Analytics and Automation:

- Delivering the next generation of endpoint security, security analytics and security automation solutions through our Cortex portfolio.

These include our industry-leading extended detection and response platform Cortex XDR to prevent, detect, and respond to complex cybersecurity attacks, Cortex XSOAR for security orchestration, automation, and response (“SOAR”), Cortex Xpanse for attack surface management (“ASM”) and Cortex Data Lake allowing our customers to collect and analyze large amounts of context-rich data across endpoints, networks, and clouds.

Threat Intelligence and Security Consulting (Unit 42):

- Enabling security teams with up-to-date threat intelligence and deep cybersecurity expertise before, during and after attacks through our Unit 42 threat research and security consulting team.

Unit 42 offers incident response, risk management, board advisory and proactive cybersecurity assessment services.

We also offer professional services, including incident response, risk management, and digital forensic services.

During fiscal 2021, we introduced several new offerings, including: Cortex XDR 2.5, Next Generation SD-WAN, Prisma Cloud 2.0, Enterprise DLP, 5G Security, IoT Healthcare Security, Prisma Access 2.0 and Complete Zero Trust Network Security.

For example, in September 2020, we acquired Crypsis, which we expect will expand our incident response capabilities and strengthen our Cortex strategy; in November 2020, we acquired Sinefa, which we expect will extend our Prisma Access offering; in December 2020, we acquired Expanse, which we expect will enrich our Cortex offerings and provide organizations an integrated view of the enterprise to combine external, internal, and threat data; and in March 2021, we acquired Bridgecrew, which we expect will expand our Prisma Cloud offering to deliver security across the full application lifecycle.

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systems and controls, and our ability to manage headcount, capital, and processes in an efficient manner.

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| | | | 2021 | | | | | | 2020 | | |

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| | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | |

| Total revenue | | | $ | 4,256.1 | | | | | $ | 3,408.4 | | | | | $ | 2,899.6 | |

| Billings | | | $ | 5,452.2 | | | | | $ | 4,301.7 | | | | | $ | 3,489.8 | |

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | |

| Free cash flow (non-GAAP) | | | $ | 1,387.0 | | | | | $ | 821.3 | | | | | $ | 924.4 | |

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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | 2021 | | | | | | | | | | | | 2020 | | | | | | | | | | | | 2019 | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

Secure the Enterprise:

Secure the Cloud:

- Secure the cloud through our Prisma security offerings, such as Prisma Cloud, the industry’s most comprehensive Cloud Native Security Platform (“CNSP”), protecting applications, data and the entire cloud native technology stack, throughout the full development lifecycle and across multi- and hybrid- cloud environments, Prisma SaaS for protecting SaaS applications, Prisma Access, a comprehensive Secure Access Service Edge (“SASE”) offering, that, together with CloudGenix SD-WAN, securing SD-WAN to enable the cloud delivered branch, and VM-Series and CN-Series for in-line network security in multi- and hybrid- cloud environments.

CloudGenix SD-WAN autonomous networking and integrated security is available as a combination of physical, virtual and cloud-delivered appliances and services.

Secure the Future:

- Secure the future of security operations through our Cortex security offerings, which includes Cortex XDR for prevention, detection and response, Cortex XSOAR for security orchestration, automation and response (“SOAR”),

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AutoFocus for threat intelligence, and Cortex Data Lake to collect and integrate security data for analytics.

During fiscal 2020, we introduced several new offerings, including: PAN-OS 10.0 with over 70 new features; our new ML-powered Next-Generation Firewalls; and our Cortex XSOAR solution that redefines security orchestration and automation with integrated threat intelligence management.

For example, in September 2019, we acquired Zingbox, which we believe will accelerate our delivery of IoT security through our Next-Generation Firewall and Cortex offerings; in December 2019, we acquired Aporeto, which we believe will strengthen our cloud-native security platform capabilities delivered by Prisma Cloud; and in April 2020, we acquired CloudGenix, which we believe will strengthen our SASE offering.

The extent of the impact of COVID-19 on our operational and financial performance will depend on

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

The change in subscription and support revenue due to changes in pricing was not significant for fiscal 2020.

| Americas | | | $ | 2,327.9 | | | | | $ | 1,982.3 | | | | | $ | 345.6 | | | | | 17.4 | | % | | | | $ | 1,982.3 | | | | | $ | 1,558.7 | | | | | $ | 423.6 | | | | | 27.2 | | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| EMEA | | | 664.8 | | | | | | 564.8 | | | | | | 100.0 | | | | | | 17.7 | | % | | | | 564.8 | | | | | | 439.6 | | | | | | 125.2 | | | | | | 28.5 | | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| APAC | | | 415.7 | | | | | | 352.5 | | | | | | 63.2 | | | | | | 17.9 | | % | | | | 352.5 | | | | | | 275.3 | | | | | | 77.2 | | | | | | 28.0 | | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

\- 43 -

Cost of product revenue decreased for fiscal 2020 compared to fiscal 2019 primarily due to a decrease in product revenue, reductions in cost of materials and lower amortization of intellectual property licenses.

\- 44 -

Product gross margin increased for fiscal 2020 compared to fiscal 2019 primarily due to reductions in cost of materials.

Subscription and support gross margin decreased for fiscal 2020 compared to fiscal 2019, primarily due to an increase in costs to support the adoption of our cloud-based subscription offerings and higher amortization of purchased intangible assets as a result of our recent acquisitions, partially offset by increased leverage of our global customer support organization.

Although we did not conduct any employee layoffs related to COVID-19, we slowed hiring in our third and fourth quarter of fiscal 2020.

The remaining increase was primarily driven by an increase in allocated costs.

The increase in personnel costs was partially offset by savings related to decreased travel as a response to COVID-19.

The remaining increase was driven by an increase in costs associated with marketing-related activities, including costs to cancel in-person events, replace them with virtual events or postpone them to future periods due to COVID-19, and costs related to go-to-market initiatives.

\- 45 -

The remaining increase in general and administrative expense was primarily due to increases in other costs to support our business growth, partially offset by a net decrease in facility exit related charges.

Our corporate structure has caused, and may

\- 46 -

Our provision for income taxes increased for fiscal 2020 compared to fiscal 2019, due to an increase in foreign income as a result of increased business operations and withholding taxes from an increase in billings in the relevant jurisdictions.

We also had a change in our valuation allowance related to acquisitions completed during fiscal 2019.

A portion of our operating expenses are incurred outside of the United States and are denominated in foreign currencies and are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the euro, [added: Israeli shekel,] British pound, Singapore dollar, [removed: Israeli shekel] [added: Australian dollar,] and Japanese yen.

The effect of an immediate 10% adverse change in foreign exchange rates on monetary assets and liabilities at July 31, [removed: 2020] [added: 2021] would not be material to our financial condition or results of operations.

As of July 31, [removed: 2020,] [added: 2021,] foreign currency transaction gains and losses and exchange rate fluctuations have not been material to our financial statements.

We enter into foreign currency derivative contracts with maturities of [removed: 15] [added: 16] months or less which we designate as cash flow hedges to manage the foreign currency exchange rate risk associated with our foreign currency denominated expenditures.

Refer to Note [removed: 5.][added: 6.]

For additional information, see the risk factor entitled [removed: “We] [added: “*We] are exposed to fluctuations in currency exchange rates, which could negatively affect our financial condition and operating [removed: results”] [added: results*”] in Part 1, Item 1A of this Annual Report on Form 10-K.

The effect of an immediate 10% change in interest rates at July 31, [removed: 2020] [added: 2021] would not have been material to our operating results and the total value of the portfolio assuming consistent investment levels.

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We empower enterprises, service providers, and government entities to secure all users, applications, data, [removed: networks] [added: networks, clouds] and devices with comprehensive visibility and context continuously across all locations.

We deliver cybersecurity products covering a broad range of use cases, enabling our end-customers to secure their networks, remote [removed: workforce, access to the service edge,] [added: and hybrid workforces,] branch locations, [added: and] public and private clouds, and to advance their Security Operations Centers (“SOC”).

We do this with solutions focused on delivering value in [removed: three] [added: five] fundamental areas:

- [removed: Secure the] [added: Enabling zero trust] network [added: security] through our [removed: ML-powered] [added: ML-Powered] Next-Generation Firewalls, available in a number of form factors, including physical, [removed: virtual] [added: virtual,] and containerized appliances, as well as a cloud-delivered [removed: service, with Panorama management available as an appliance or as a virtual machine for the public or private cloud.][added: service.]

This also includes [removed: security services] [added: our add-on Cloud-Delivered Security Services,] such as Threat Prevention, WildFire, URL Filtering, [added: Advanced URL Filtering,] DNS Security, IoT Security, GlobalProtect, [removed: SD-WAN and] [added: SD-WAN, Enterprise] Data Loss Prevention [removed: that are delivered as] [added: (“Enterprise DLP”),] SaaS [removed: subscriptions to] [added: Security API and SaaS Security Inline that secure content, applications, users, and devices across] our [removed: ML-powered] [added: ML-Powered] Next-Generation [removed: Firewalls.][added: Firewalls, Prisma, and Cortex product lines, to enable best-in-class security across a broad range of applications.]

We are actively monitoring, [removed: evaluating] [added: evaluating,] and responding to developments relating to COVID-19, which has [added: resulted in,] and is expected to [added: continue to] result in [removed: continued] significant [removed: global social] [added: global, social,] and business disruption.

While we instituted a global work-from-home policy beginning in March 2020, [added: which has been modified to provide employees with the choice to work in certain of our offices when and as they feel comfortable,] we did not incur significant disruptions in our work operations during fiscal [removed: 2020.][added: 2021.]

We are conducting business as usual with restrictions to employee [removed: travel] [added: travel,] and [removed: transitioning of] [added: we have transitioned] in-person marketing events to virtual formats, among other modifications.

[removed: These] [added: We expect these] changes will substantially remain in effect in the first quarter of fiscal [removed: 2021] [added: 2022] and [removed: are likely to] [added: could] extend to future quarters.

We will continue to actively monitor the [removed: situation] [added: situation, including progress made through vaccinations,] and [added: we] will make further changes to our business operations as may be required by federal, [removed: state] [added: state,] or local authorities [removed: or] [added: and] that we determine are in the best interests of our employees, end-customers, partners, [removed: suppliers] [added: suppliers,] and stockholders.

Our focus remains on the safety of our employees, [removed: striving] [added: and we strive] to protect the health and well-being of the communities in which we operate, [removed: and] [added: in part, by] providing technology to our employees, [removed: end-customers] [added: end-customers,] and partners to help them do their best work while remote.

[removed: Although some end-customers adopted Prisma Access as their secure work-from-home solution for the longer term, COVID-19 may curtail] [added: has affected] our [removed: end-customers'] [added: end-customers’] spending and could lead them to delay or defer purchasing decisions, and lengthen sales cycles and payment terms, which could materially adversely impact our business, results of [removed: operations] [added: operations,] and overall financial performance.

Also, certain of our end-customers or partners may be or may become credit or cash [removed: constrained] [added: constrained,] making it difficult for them to fulfill their payment obligations to us.

The extent of the impact of COVID-19 on our operational and financial performance will depend on developments, including the duration and spread of the [removed: virus,] [added: virus and its variants,] impact on our end-customers’ spending, volume of sales and length of our sales cycles, impact on our partners, [removed: suppliers] [added: suppliers,] and employees, actions that may be taken by governmental [removed: authorities] [added: authorities,] and other factors identified in Part I, Item 1A [removed: "Risk Factors"] [added: “Risk Factors”] in this Form 10-K.

These features include: App-ID, User-ID, Content-ID, [added: Device-ID,] site-to-site virtual private network (“VPN”), remote access Secure Sockets Layer (“SSL”) VPN, and Quality-of-Service (“QoS”).

Our appliances and software are designed for different performance requirements throughout an organization and are classified based on throughput, ranging from our [removed: PA-220,] [added: PA-410,] which is designed for small organizations and remote or branch offices, to our top-of-the-line PA-7080, which is designed for [removed: large scale] [added: large-scale] data centers and service provider use.

Our firewall appliances come in a physical form factor, [added: and] in a virtual form factor, called VM-Series, that is available for virtualization and cloud environments from companies such as VMware, Inc. (“VMware”), Microsoft Corporation (“Microsoft”), Amazon.com, Inc. (“Amazon”), and Google, Inc. (“Google”), and in Kernel-based Virtual Machine (“KVM”)/OpenStack environments, as well as in a containerized form factor, called CN-Series.

Panorama. Panorama is our centralized security management solution for global control of all of our firewall appliances and software deployed on an end-customer’s network, as well as in their instances in public or private cloud [removed: environments] [added: environments,] as a virtual appliance or a physical appliance.

[removed: Subscription Offerings.] We offer a number of subscriptions as part of our portfolio.

Of these subscription offerings, [added: cloud-delivered security services like] Threat Prevention, WildFire, URL Filtering, [added: Advanced URL Filtering,] DNS Security, IoT Security, [added: SaaS Security Inline,] GlobalProtect, SD-WAN and [removed: Data Loss Prevention] [added: Enterprise DLP] are sold as options to our firewall appliances and software, whereas [removed: AutoFocus,] Prisma [removed: Access (formerly GlobalProtect cloud service), CloudGenix SD-WAN, Prisma] Cloud (formerly Redlock Inc. (“RedLock”), Twistlock [removed: LTD.] [added: Ltd.] (“Twistlock”), PureSec Ltd. [removed: (“PureSec”) and] [added: (“PureSec”),] Aporeto Inc. (“Aporeto”)), Prisma [removed: SaaS] [added: Access, Prisma SD-WAN] (formerly [removed: Aperture), Cortex Data Lake] [added: CloudGenix SD-WAN), SaaS Security API] (formerly [removed: Logging Service),] [added: Prisma SaaS),] Cortex XDR (formerly [removed: Cortex XDR and Traps) and] [added: Traps),] Cortex XSOAR (formerly Demisto Inc. [removed: (“Demisto”))] [added: (“Demisto”)), Cortex Xpanse and Cortex Data Lake] are sold on a per-user, per-endpoint, or capacity-based basis.

The core component of this subscription [removed: is a] [added: goes beyond traditional] sandbox [removed: environment that] [added: environments and] can operate on an end-customers’ [added: local environment,] private cloud or our public [removed: cloud, where files can be run and monitored for more than 100 behavioral characteristics that identify the file as malware.][added: cloud.]

Once identified, whether in the cloud or in-line, preventive measures are automatically generated and delivered [removed: to all subscribed devices] in seconds or [removed: less.][added: less across networks, clouds, endpoints, or wherever WildFire-enabled sensors are deployed.]

By providing this as a cloud-based subscription, all of our end-customers benefit from malware found on any of our [removed: end-customer’s] [added: end-customers’] networks.

[removed: powered] [added: Native integration with our ML-Powered] Next-Generation Firewalls eliminates the need for customers to deploy and manage their web security separately from network security.

Unlike other solutions, it does not require endpoint routing configurations to be maintained and therefore cannot be [removed: by-passed.][added: bypassed.]

Using machine learning and our App-ID technology, it can accurately identify and classify various IoT and operational technology (“OT”) [removed: devices] [added: devices,] including never-been-seen-before devices, mission critical OT devices and unmanaged legacy systems.

[removed: - GlobalProtect.] This appliance-based subscription provides protection for users of both traditional laptop and mobile devices.

Regardless of the operating systems, laptops, tablets and phones will stay connected to the corporate network when they are on a network of any kind [removed: and] [added: and,] as a result, are protected as if they never left the corporate campus.

- SD-WAN. Our SD-WAN subscription is now integrated with PAN-OS, so that our end-customers can get the security features of our PAN-OS [removed: ML-powered Next Generation] [added: ML-Powered Next-Generation] Firewall together with SD-WAN functionality.

[removed: The SD-WAN] overlay supports dynamic, intelligent path selection based on the applications, services and conditions of the links that each application or service is allowed to use, allowing applications to be prioritized based on criteria such as whether the application is mission-critical, latency-sensitive, or meets certain health criteria.

- [removed: Data Loss Prevention. Our] Enterprise [removed: Data Loss Prevention] [added: DLP. Our data loss prevention] service is a cloud service that provides consistent, reliable protection of sensitive data, such as personally identifiable information [removed: (PII)] [added: (“PII”)] and intellectual property, for all traffic types, applications, and users.

Prisma Cloud delivers cloud security posture [removed: management and a] [added: management,] cloud workload protection [removed: platform] [added: platform, cloud network security, and cloud infrastructure entitlement management capabilities] that [removed: provides] [added: provide] comprehensive visibility and [removed: threat detection] [added: protection] across an [removed: organization's] [added: organization’s] hybrid, multi-cloud infrastructure.

- [removed: Prisma SaaS. Prisma] SaaS [added: Security API. SaaS Security API (formerly Prisma SaaS)] is a multi-mode, cloud access security broker service that helps govern sanctioned SaaS application usage across all users and helps prevent breaches and non-compliance.

It delivers complete visibility and granular enforcement across all user, folder, and file activity within sanctioned SaaS [removed: applications.][added: applications, and can be combined with SaaS Security Inline for a complete integrated cloud access security broker (“CASB”).]

Our [removed: CloudGenix] [added: Prisma] SD-WAN solution is a next-generation SD-WAN solution that makes the secure cloud-delivered branch possible.

[added: Unlike legacy] SD-WAN [added: solutions that introduce cost and complexity, our Prisma SD-WAN] ensures exceptional user experience with [removed: app defined] [added: application-defined] policies and simplifies network and security operations using machine learning and automation.

- Cortex XDR. This cloud-based subscription enables organizations to [removed: identify] [added: collect telemetry from endpoint, network, identity] and [removed: stop the most sophisticated attacks by applying AI] [added: cloud data sources] and [added: apply advanced analytics and] machine learning [removed: to context rich network, endpoint, and cloud] [added: across all] data, to quickly find and stop targeted attacks, insider abuse, and compromised endpoints.

Cortex XDR [removed: is comprised of] [added: has two product tiers:] XDR Prevent and XDR Pro.

XDR Prevent delivers [removed: enterprise class] [added: enterprise-class] endpoint security focused on preventing attacks.

XDR Pro [removed: encompasses] [added: extends] endpoint detection and response (“EDR”) [removed: and] [added: to include] cross-data [removed: source analytics] [added: analytics,] including [removed: network] [added: network, cloud] and identity data.

Zero Trust Network Security:

Panorama, our network security management solution, available as hardware or virtual machine, can centrally manage all of our firewalls irrespective of their form factor, location, or scale.

Cloud Security:

- Enabling cloud security through our Prisma security offerings.

Prisma Cloud, the industry’s most comprehensive Cloud Native Security Platform (“CNSP”), secures multi- and hybrid-cloud environments and cloud native applications, integrating security across the full deployment lifecycle.

VM-Series and CN-Series enforce in-line network security in multi- and hybrid-cloud environments.

Secure Access Service Edge:

- Prisma Access, the industry’s most complete cloud-delivered security platform, together with Prisma SD-WAN, SaaS Security API and SaaS Security Inline, provide a comprehensive Secure Access Service Edge (“SASE”) offering that is used to secure remote workforces and enable the cloud-delivered branch.

Security Analytics and Automation:

- Delivering the next generation of endpoint security, security analytics and security automation solutions through our Cortex portfolio.

These include our industry-leading extended detection and response platform Cortex XDR to prevent, detect, and respond to complex cybersecurity attacks, Cortex XSOAR for security orchestration, automation, and response (“SOAR”), Cortex Xpanse for attack surface management (“ASM”) and Cortex Data Lake allowing our customers to collect and analyze large amounts of context-rich data across endpoints, networks, and clouds.

Threat Intelligence and Security Consulting (Unit 42):

- Enabling security teams with up-to-date threat intelligence and deep cybersecurity expertise before, during and after attacks through our Unit 42 threat research and security consulting team.

Unit 42 offers incident response, risk management, board advisory and proactive cybersecurity assessment services.

Although some end-customers adopted Prisma Access as their secure work-from-home solution for the longer term, COVID-19

\- 4 \-

Products

Subscriptions

Zero Trust Network Security:

WildFire combines dynamic and

\- 5 \-

static analysis, recursive analysis, and a custom-built analysis environment with network traffic profiling and fileless attack detection to discover even the most sophisticated and evasive threats.

- Advanced URL Filtering.

This subscription builds on all of the capabilities of URL Filtering, adding the industry’s first in-line ML-powered web protection engine.

It delivers real-time detection and prevention of unknown, evasive, and targeted web-based threats such as phishing, malware, and command-and-control.

While many vendors use machine learning to categorize web content or prevent malware downloads, Advanced URL Filtering is the first offering to protect patient zero from unknown fileless and file-based web attacks in real-time.

It includes industry-first protections against multiple emerging DNS-based network attacks.

- SaaS Security Inline. SaaS Security Inline is a new subscription on our ML-Powered Next Generation Firewalls that adds an in-line service to automatically gain visibility and control over the tens of thousands of known and new sanctioned, unsanctioned and tolerated SaaS applications in use within organizations today.

It provides enterprise data protection and compliance across all SaaS applications and prevents cloud threats in real time with best-in-class security.

The solution is easy to deploy being natively integrated on our range of ML-Powered Next-Generation Firewalls, eliminating the architectural complexity of traditional CASB products, while offering the lowest total cost of ownership.

It can be combined with SaaS Security API (formerly Prisma SaaS) as a complete integrated CASB.

- GlobalProtect.

The SD-WAN

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Cloud Security:

Secure Access Service Edge:

- Prisma Access.

Prisma Access consolidates more point-products into a single converged cloud-delivered platform than any competing solution, transforming network security and allowing organizations to enable secure hybrid workforces.

Unlike competing platforms, only Prisma Access protects all application traffic with complete, best-in-class security while ensuring an exceptional user experience with industry-leading service-level agreements (“SLA”s).

- Prisma SD-WAN.

Secure the Enterprise:

Secure the Cloud:

- Secure the cloud through our Prisma security offerings, such as Prisma Cloud, the industry’s most comprehensive Cloud Native Security Platform (“CNSP”), protecting applications, data and the entire cloud native technology stack, throughout the full development lifecycle and across multi- and hybrid- cloud environments, Prisma SaaS for protecting SaaS applications, Prisma Access, a comprehensive Secure Access Service Edge (“SASE”) offering, that, together with CloudGenix SD-WAN, securing SD-WAN to enable the cloud delivered branch, and VM-Series and CN-Series for in-line network security in multi- and hybrid- cloud environments.

Secure the Future:

- Secure the future of security operations through our Cortex security offerings, which includes Cortex XDR for prevention, detection and response, Cortex XSOAR for security orchestration, automation and response (“SOAR”), AutoFocus for threat intelligence, and Cortex Data Lake to collect and integrate security data for analytics.

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Secure the Enterprise:

Our cloud-delivered service features network-based phishing protection, including a machine learning module delivered inline on our ML-powered Next-Generation Firewalls.

These machine learning techniques can detect and stop never before seen threats and evasive phishing before they reach users or endpoints.

Native integration with our ML-

\- 5 -

Secure the Cloud:

- Prisma Access. This cloud-based subscription enables our end-customers to utilize the preventive capabilities of our portfolio to secure remote offices and mobile users, providing consistent protection across globally distributed network and cloud environments without the need for firewall appliances or software in the remote locations.

With this offering, our end-customers can quickly and easily add or remove remote locations and users, and establish and adjust security policies as needed, using a multi-tenant, cloud-based security infrastructure that we operate on their behalf.

- CloudGenix SD-WAN.

Unlike legacy SD-WAN solutions that introduce cost and complexity, Our CloudGenix

\- 6 -

Secure the Future:

Cortex XSOAR is powered by our machine learning bot, DBot, which ingests information about indicators to determine if they are malicious.

- AutoFocus. This cloud-based subscription provides threat intelligence capabilities to our end-customers’ security operations teams.

Indicators of compromise and anomalies that occur on an end-customer’s network can be correlated with similar data that has been centrally collected from all our participating end-customers.

This offers our end-customers priority alerts, deep attack context, and high-fidelity threat intelligence across millions of malware samples and tens of billions of file artifacts.

This includes a direct pipeline to actionable intelligence from Unit 42, our threat research team.

AutoFocus can inform users if adversaries and campaigns discovered by Unit 42 have targeted the end-user’s network, or similar networks.

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CloudGenix SD-WAN. CloudGenix SD-WAN provides deep application visibility, with Layer 7 intelligence for network policy creation and traffic engineering, ensuring exceptional user experience by enabling network teams to deliver Service Level Agreements (“SLA”s) for all apps including Cloud, SaaS and Unified communication as a Service (“UCaaS”).

Machine learning and data science methodologies automate operations and problems avoidance to simplify network operations and reduce network trouble tickets.

During fiscal 2020, we introduced several new offerings, including: PAN-OS 10.0 with over 70 new features; our new ML-powered Next-Generation Firewalls; and our Cortex XSOAR solution that redefines security orchestration and automation with integrated threat intelligence management.

For example, we acquired Zingbox, Inc. (“Zingbox”), which we believe will accelerate our delivery of IoT security through our ML-powered Next-Generation Firewall and Cortex products, Aporeto, which we believe will strengthen our cloud-native security platform capabilities delivered by Prisma Cloud and CloudGenix Inc. (“CloudGenix”), which we believe will strengthen our SASE offering.

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variety of security functions across a variety of deployment scenarios.

We expect to continue to grow our sales headcount in all of our principal markets and expand our presence into countries where we currently do not have a direct sales presence.

\- 10 -

Employees

As of July 31, 2020, we had 8,014 employees.

Competition for qualified personnel in our industry is intense, and we believe that our future success depends in part on our continued ability to hire, motivate, and retain such personnel.

\- 11 -

For the fiscal year [removed: ended] [added: ended] July 31, [removed: 2020][added: 2021]

The aggregate market value of voting stock held by non-affiliates of the registrant was [removed: $22,950,644,677] [added: $33,296,058,434] as of January 31, [removed: 2020,] [added: 2021,] the last business day of the registrant’s most recently completed second fiscal quarter (based on the closing sales price for the common stock on the New York Stock Exchange on such date).

Shares of common stock held by each executive [removed: officer, director,] [added: officer] and [removed: holder of 5% or more of the outstanding common stock] [added: director] have been excluded in that such persons may be deemed to be affiliates.

On August [removed: 21, 2020, 96,373,294] [added: 23, 2021, 97,406,113] shares of the registrant’s common stock, $0.0001 par value, were outstanding.

Portions of the information called for by Part III of this Annual Report on Form 10-K is hereby incorporated by reference from the definitive proxy statement for the registrant’s [removed: 2020] [added: 2021] annual meeting of stockholders, which will be filed with the Securities and Exchange Commission not later than 120 days after the registrant’s fiscal year ended July 31, [removed: 2020.][added: 2021.]

| Item 1. | | | [removed: [Business](#ic3ab314b04ab4857be358cc28a025f8d_13)] [added: [Business](#i324ab1390dd34e81913b9c704092d31c_13)] | | | [removed: [4](#ic3ab314b04ab4857be358cc28a025f8d_13)] [added: [4](#i324ab1390dd34e81913b9c704092d31c_13)] | | |

| Item 1A. | | | [Risk [removed: Factors](#ic3ab314b04ab4857be358cc28a025f8d_46)] [added: Factors](#i324ab1390dd34e81913b9c704092d31c_46)] | | | [removed: [12](#ic3ab314b04ab4857be358cc28a025f8d_46)] [added: [14](#i324ab1390dd34e81913b9c704092d31c_46)] | | |

| Item 1B. | | | [Unresolved Staff [removed: Comments](#ic3ab314b04ab4857be358cc28a025f8d_49)] [added: Comments](#i324ab1390dd34e81913b9c704092d31c_49)] | | | [removed: [34](#ic3ab314b04ab4857be358cc28a025f8d_49)] [added: [38](#i324ab1390dd34e81913b9c704092d31c_49)] | | |

| Item 2. | | | [removed: [Properties](#ic3ab314b04ab4857be358cc28a025f8d_52)] [added: [Properties](#i324ab1390dd34e81913b9c704092d31c_52)] | | | [removed: [34](#ic3ab314b04ab4857be358cc28a025f8d_52)] [added: [38](#i324ab1390dd34e81913b9c704092d31c_52)] | | |

| Item 3. | | | [Legal [removed: Proceedings](#ic3ab314b04ab4857be358cc28a025f8d_55)] [added: Proceedings](#i324ab1390dd34e81913b9c704092d31c_55)] | | | [removed: [34](#ic3ab314b04ab4857be358cc28a025f8d_55)] [added: [39](#i324ab1390dd34e81913b9c704092d31c_55)] | | |

| Item 4. | | | [Mine Safety [removed: Disclosures](#ic3ab314b04ab4857be358cc28a025f8d_58)] [added: Disclosures](#i324ab1390dd34e81913b9c704092d31c_58)] | | | [removed: [34](#ic3ab314b04ab4857be358cc28a025f8d_58)] [added: [39](#i324ab1390dd34e81913b9c704092d31c_58)] | | |

| Item 5. | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#ic3ab314b04ab4857be358cc28a025f8d_64)] [added: Securities](#i324ab1390dd34e81913b9c704092d31c_64)] | | | [removed: [35](#ic3ab314b04ab4857be358cc28a025f8d_64)] [added: [40](#i324ab1390dd34e81913b9c704092d31c_64)] | | |

| Item 7. | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#ic3ab314b04ab4857be358cc28a025f8d_70)] [added: Operations](#i324ab1390dd34e81913b9c704092d31c_70)] | | | [removed: [38](#ic3ab314b04ab4857be358cc28a025f8d_70)] [added: [43](#i324ab1390dd34e81913b9c704092d31c_70)] | | |

| Item 7A. | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#ic3ab314b04ab4857be358cc28a025f8d_154)] [added: Risk](#i324ab1390dd34e81913b9c704092d31c_154)] | | | [removed: [52](#ic3ab314b04ab4857be358cc28a025f8d_154)] [added: [57](#i324ab1390dd34e81913b9c704092d31c_154)] | | |

| Item 8. | | | [Financial Statements and Supplementary [removed: Data](#ic3ab314b04ab4857be358cc28a025f8d_157)] [added: Data](#i324ab1390dd34e81913b9c704092d31c_157)] | | | [removed: [54](#ic3ab314b04ab4857be358cc28a025f8d_157)] [added: [59](#i324ab1390dd34e81913b9c704092d31c_157)] | | |

| Item 9. | | | [Changes in and [removed: Disagreements](#ic3ab314b04ab4857be358cc28a025f8d_271) [w](#ic3ab314b04ab4857be358cc28a025f8d_271)[ith] [added: Disagreements with] Accountants on Accounting and Financial [removed: Disclosure](#ic3ab314b04ab4857be358cc28a025f8d_271)] [added: Disclosure](#i324ab1390dd34e81913b9c704092d31c_274)] | | | [removed: [98](#ic3ab314b04ab4857be358cc28a025f8d_271)] [added: [102](#i324ab1390dd34e81913b9c704092d31c_274)] | | |

| Item 9A. | | | [Controls and [removed: Procedures](#ic3ab314b04ab4857be358cc28a025f8d_274)] [added: Procedures](#i324ab1390dd34e81913b9c704092d31c_277)] | | | [removed: [99](#ic3ab314b04ab4857be358cc28a025f8d_274)] [added: [102](#i324ab1390dd34e81913b9c704092d31c_277)] | | |

| Item 9B. | | | [Other [removed: Information](#ic3ab314b04ab4857be358cc28a025f8d_277)] [added: Information](#i324ab1390dd34e81913b9c704092d31c_280)] | | | [removed: [99](#ic3ab314b04ab4857be358cc28a025f8d_277)] [added: [102](#i324ab1390dd34e81913b9c704092d31c_280)] | | |

| Item 10. | | | [Directors, Executive Officers, and Corporate [removed: Governance](#ic3ab314b04ab4857be358cc28a025f8d_283)] [added: Governance](#i324ab1390dd34e81913b9c704092d31c_286)] | | | [removed: [100](#ic3ab314b04ab4857be358cc28a025f8d_283)] [added: [103](#i324ab1390dd34e81913b9c704092d31c_286)] | | |

| Item 11. | | | [Executive [removed: Compensation](#ic3ab314b04ab4857be358cc28a025f8d_286)] [added: Compensation](#i324ab1390dd34e81913b9c704092d31c_289)] | | | [removed: [100](#ic3ab314b04ab4857be358cc28a025f8d_286)] [added: [103](#i324ab1390dd34e81913b9c704092d31c_289)] | | |

| Item 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#ic3ab314b04ab4857be358cc28a025f8d_289)] [added: Matters](#i324ab1390dd34e81913b9c704092d31c_292)] | | | [removed: [100](#ic3ab314b04ab4857be358cc28a025f8d_289)] [added: [103](#i324ab1390dd34e81913b9c704092d31c_292)] | | |

| Item 13. | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#ic3ab314b04ab4857be358cc28a025f8d_292)] [added: Independence](#i324ab1390dd34e81913b9c704092d31c_295)] | | | [removed: [100](#ic3ab314b04ab4857be358cc28a025f8d_292)] [added: [103](#i324ab1390dd34e81913b9c704092d31c_295)] | | |

| Item 14. | | | [Principal Accountant Fees and [removed: Services](#ic3ab314b04ab4857be358cc28a025f8d_295)] [added: Services](#i324ab1390dd34e81913b9c704092d31c_298)] | | | [removed: [100](#ic3ab314b04ab4857be358cc28a025f8d_295)] [added: [103](#i324ab1390dd34e81913b9c704092d31c_298)] | | |

| Item 15. | | | [Exhibits and Financial Statement [removed: Schedules](#ic3ab314b04ab4857be358cc28a025f8d_301)] [added: Schedules](#i324ab1390dd34e81913b9c704092d31c_304)] | | | [removed: [101](#ic3ab314b04ab4857be358cc28a025f8d_301)] [added: [104](#i324ab1390dd34e81913b9c704092d31c_304)] | | |

- our ability to successfully acquire and integrate companies and [removed: assets, including closing The Crypsis Group acquisition;][added: assets;]

In light of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in this Annual Report on Form [added: 10-K may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.]

| Item 6. | | | [\[R](#i324ab1390dd34e81913b9c704092d31c_67)[eserved](#i324ab1390dd34e81913b9c704092d31c_67)[\]](#i324ab1390dd34e81913b9c704092d31c_67) | | | [42](#i324ab1390dd34e81913b9c704092d31c_67) | | |

| Item 9C. | | | [Disclosure Regarding Foreign Jurisdictions That Prevent Inspections](#i324ab1390dd34e81913b9c704092d31c_3040) | | | [102](#i324ab1390dd34e81913b9c704092d31c_3040) | | |

| | | | [Signatures](#i324ab1390dd34e81913b9c704092d31c_307) | | | [108](#i324ab1390dd34e81913b9c704092d31c_307) | | |

\- 2 \-

- our expectations regarding the future results of our People Strategy;

- our ability to obtain adequate supply of our products from our third-party manufacturing partners;

\- 3 \-

| Item 6. | | | [Selected Financial Data](#ic3ab314b04ab4857be358cc28a025f8d_67) | | | [37](#ic3ab314b04ab4857be358cc28a025f8d_67) | | |

| | | | [Signatures](#ic3ab314b04ab4857be358cc28a025f8d_304) | | | [105](#ic3ab314b04ab4857be358cc28a025f8d_304) | | |

\- 2 -

\- 3 -

10-K may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

Our corporate headquarters is located in Santa Clara, [removed: California] [added: California,] where we lease approximately 941,000 square feet of space under three lease agreements that expire in July 2028, with options to extend the lease terms through July 2046.

Leases in Part II, Item 8 of this Annual Report on Form 10-K [removed: for more information on our operating leases.]

\- 38 \-

for more information on our operating leases.

\- 39 \-

\- 34 -

As of August [removed: 21, 2020,] [added: 23, 2021,] there were [removed: 151] [added: 229] holders of record of our common stock.

Recent [removed: Sale] [added: Sales] of Unregistered [added: Equity] Securities

[removed: During fiscal 2020,] [added: In June 2021,] we issued a total of [removed: 22,724] [added: 11,114] shares of our unregistered common stock [added: pursuant to post-closing obligations] in connection with [removed: the acquisition of Zingbox (“Zingbox Transaction”) and a total of 11,983 shares of] our [removed: unregistered common stock in connection with the] [added: previous] acquisition of [removed: Aporeto (“Aporeto] [added: Aporeto, Inc. (the “Aporeto] Transaction”).

[removed: None of the Zingbox Transaction or] [added: The] Aporeto Transaction [removed: involved] [added: did not involve] any underwriters, any underwriting discounts or commissions, or any public offering.

[removed: We believe the offers, sales, and] [added: The] issuances of the securities pursuant to the [removed: Zingbox Transaction,] [added: Aporeto Transaction] were exempt from registration under the Securities Act of 1933, as amended (the “Act”) by virtue of Section 4(a)(2) of the Act and Rule 506 of Regulation D promulgated [removed: thereunder, because the issuance of securities to the recipients did not involve a public offering.][added: thereunder.]

The following table summarizes stock repurchases during the three months ended July 31, [removed: 2020] [added: 2021] (in millions, except per share amounts):

| Period | | | | | | Total Number of Shares Purchased | | | | | | Average Price Paid per Share | | | | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or [removed: Programs(1)] [added: Programs(1)] | | | | | | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or [removed: Programs(1)] [added: Programs(1)] | | |

(1) On February 26, 2019, we announced that our board of directors authorized a $1.0 billion share repurchase [removed: program] [added: program,] which [removed: will be] [added: is] funded from available working capital.

Repurchases [removed: may] [added: under our program are to] be made at management’s discretion [removed: from time to time] on the open market, through privately negotiated transactions, transactions structured through investment banking institutions, block purchase techniques, 10b5-1 trading plans, or a combination of the foregoing.

The [added: expiration date of this] repurchase authorization [removed: will expire on] [added: was extended to] December 31, [removed: 2020] [added: 2022,] and [added: our repurchase program] may be suspended or discontinued at any time.

This performance graph compares the cumulative total return on our common stock with that of the NYSE Composite Index and the NYSE Arca Tech 100 Index for the five years ended July 31, [removed: 2020.][added: 2021.]

This performance graph assumes $100 was invested on July 31, [removed: 2015,] [added: 2016,] in each of the common stock of Palo Alto Networks, Inc., the NYSE Composite Index, and the NYSE Arca Tech 100 Index, and assumes the reinvestment of any dividends.

[removed: ][added: ]

| Company/Index | | | [removed: 7/31/2015] | | | [removed: | | |] 7/31/2016 | | | | | | 7/31/2017 | | | | | | 7/31/2018 | | | | | | 7/31/2019 | | | | | | 7/31/2020 | | | [added: | | | 7/31/2021 | | |]

Dividend Policy

We have never declared or paid, and do not anticipate declaring or paying in the foreseeable future, any cash dividends on our capital stock.

Any future determination as to the declaration and payment of dividends, if any, will be at the discretion of our board of directors, subject to applicable laws and will depend on then existing conditions, including our financial condition, operating results, contractual restrictions, capital requirements, business prospects, and other factors our board of directors may deem relevant.

| May 1, 2021 to May 31, 2021(1)(2) | | | | | | 0.0 | | | | | | $ | 353.17 | | | | | 0.0 | | | | | | $ | 651.9 | |

| June 1, 2021 to June 30, 2021(1)(2) | | | | | | 0.0 | | | | | | $ | 361.83 | | | | | 0.0 | | | | | | $ | 651.9 | |

| July 1, 2021 to July 31, 2021(1)(2) | | | | | | 0.9 | | | | | | $ | 387.98 | | | | | 0.9 | | | | | | $ | 323.9 | |

| Total | | | | | | 0.9 | | | | | | $ | 387.63 | | | | | 0.9 | | | | | | | | |

On December 8, 2020, we announced that our board of directors authorized a $700.0 million increase to our share repurchase program, bringing the total authorization to $1.7 billion.

On August 17, 2021, our board of directors authorized another $676.1 million increase to this share repurchase program, bringing the total authorization to $2.4 billion, with $1.0 billion remaining.

\- 40 \-

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Palo Alto Networks, Inc. | | | | | | $ | 100.00 | | | | | $ | 100.68 | | | | | $ | 151.47 | | | | | $ | 173.08 | | | | | $ | 195.52 | | | | | $ | 304.87 | |

| NYSE Composite Index | | | | | | $ | 100.00 | | | | | $ | 110.96 | | | | | $ | 120.19 | | | | | $ | 121.15 | | | | | $ | 115.57 | | | | | $ | 153.93 | |

| NYSE Arca Tech 100 Index | | | | | | $ | 100.00 | | | | | $ | 123.34 | | | | | $ | 154.01 | | | | | $ | 165.71 | | | | | $ | 191.39 | | | | | $ | 265.46 | |

\- 41 \-

The recipients of the securities in the Zingbox Transaction represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were placed upon the stock certificates issued in these transactions.

All recipients had adequate access, through their relationships with us or otherwise, to information about us.

The issuances of these securities were made without any general solicitation or advertising.

During fiscal 2020, we also issued 2.0 million shares of our common stock to certain financial counterparties that were holders of warrants that we issued in connection with the issuance of our 2019 Notes.

The shares of common stock issued upon exercise of these warrants were issued in reliance on an exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended.

| May 1, 2020 to May 31, 2020(2) | | | | | | 0.0 | | | | | | $ | 195.15 | | | | | 0.0 | | | | | | $ | 801.9 | |

| June 1, 2020 to June 30, 2020(2)(3) | | | | | | 1.0 | | | | | | $ | 209.28 | | | | | 1.0 | | | | | | $ | 801.9 | |

| July 1, 2020 to July 31, 2020(2) | | | | | | 0.0 | | | | | | $ | 251.79 | | | | | 0.0 | | | | | | $ | 801.9 | |

| Total | | | | | | 1.0 | | | | | | $ | 209.82 | | | | | 1.0 | | | | | | | | |

On February 24, 2020, we announced that our board of directors approved the repurchase of $1.0 billion of our common stock through an accelerated share repurchase (“ASR”) transaction, which was completed in fiscal 2020.

This ASR was in addition to our above-mentioned share repurchase authorization.

\- 35 -

(3) Includes repurchases under our ASR transaction.

During the three months ended July 31, 2020, we purchased approximately 1.0 million shares out of the 5.2 million shares of our common stock purchased under the ASR transaction, to conclude the program.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Palo Alto Networks, Inc. | | | $ | 100.00 | | | | | $ | 70.44 | | | | | $ | 70.91 | | | | | $ | 106.69 | | | | | $ | 121.91 | | | | | $ | 137.72 | |

| NYSE Composite Index | | | $ | 100.00 | | | | | $ | 99.11 | | | | | $ | 109.97 | | | | | $ | 119.12 | | | | | $ | 120.07 | | | | | $ | 114.54 | |

| NYSE Arca Tech 100 Index | | | $ | 100.00 | | | | | $ | 101.00 | | | | | $ | 124.57 | | | | | $ | 155.55 | | | | | $ | 167.37 | | | | | $ | 193.31 | |

\- 36 -

\- 42 \-

The selected consolidated statement of operations data for fiscal 2020, 2019, and 2018 and consolidated balance sheet data as of July 31, 2020 and 2019 are derived from our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

The selected consolidated statement of operations data for fiscal 2017 and 2016 and consolidated balance sheet data as of July 31, 2018, 2017, and 2016 are derived from audited financial statements not included in this Annual Report on Form 10-K.

Our historical results are not necessarily indicative of the results that may be expected in the future.

The selected consolidated financial data below should be read in conjunction with the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Part II, Item 7 of this Annual Report on Form 10-K and our consolidated financial statements and related notes included in Part II, Item 8 of this Annual Report on Form 10-K.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | Year Ended July 31, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | 2020 | | | | | | 2019 | | | | | | 2018 | | | | | | 2017 | | | | | | 2016 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | (in millions, except per share data) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Selected Consolidated Statements of Operations Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Total revenue(1) | | | $ | 3,408.4 | | | | | $ | 2,899.6 | | | | | $ | 2,273.6 | | | | | $ | 1,755.1 | | | | | $ | 1,378.5 | | | | | | | | | | | | | | | | | | | | | | | | | |

| Total gross profit(1) | | | 2,408.9 | | | | | | 2,091.2 | | | | | | 1,628.5 | | | | | | 1,278.7 | | | | | | 1,008.5 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Operating loss(1) | | | (179.0) | | | | | | (54.1) | | | | | | (104.2) | | | | | | (165.8) | | | | | | (157.3) | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net loss(1) | | | $ | (267.0) | | | | | $ | (81.9) | | | | | $ | (122.2) | | | | | $ | (203.0) | | | | | $ | (192.7) | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net loss per share, basic and diluted(1) | | | $ | (2.76) | | | | | $ | (0.87) | | | | | $ | (1.33) | | | | | $ | (2.24) | | | | | $ | (2.21) | | | | | | | | | | | | | | | | | | | | | | | | | |

| Weighted-average shares used to compute net loss per share, basic and diluted | | | 96.9 | | | | | | 94.5 | | | | | | 91.7 | | | | | | 90.6 | | | | | | 87.1 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | July 31, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | (in millions) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Selected Consolidated Balance Sheet Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Cash and cash equivalents | | | $ | 2,958.0 | | | | | $ | 961.4 | | | | | $ | 2,506.9 | | | | | $ | 744.3 | | | | | $ | 734.4 | | | | | | | | | | | | | | | | | | | | | | | | | |

| Investments | | | 1,344.2 | | | | | | 2,417.1 | | | | | | 1,444.0 | | | | | | 1,420.0 | | | | | | 1,204.0 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Working capital(1)(2) | | | 2,437.5 | | | | | | 1,611.5 | | | | | | 2,036.8 | | | | | | 818.1 | | | | | | 927.2 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Total assets(1) | | | 9,065.4 | | | | | | 6,592.2 | | | | | | 5,948.9 | | | | | | 3,538.5 | | | | | | 2,858.2 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Total deferred revenue(1) | | | 3,810.2 | | | | | | 2,888.7 | | | | | | 2,279.3 | | | | | | 1,692.4 | | | | | | 1,240.8 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Convertible senior notes, net(2) | | | 3,084.1 | | | | | | 1,430.0 | | | | | | 1,920.1 | | | | | | 524.7 | | | | | | 500.2 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Long-term operating lease liabilities(3) | | | 336.6 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Common stock and additional paid-in capital | | | 2,259.2 | | | | | | 2,490.9 | | | | | | 1,967.4 | | | | | | 1,599.7 | | | | | | 1,515.5 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Total stockholders’ equity(1) | | | $ | 1,101.8 | | | | | $ | 1,586.3 | | | | | $ | 1,160.3 | | | | | $ | 927.8 | | | | | $ | 894.9 | | | | | | | | | | | | | | | | | | | | | | | | | |

______________

(1)The amounts for fiscal 2018 and 2017 have been adjusted due to our adoption of the new revenue recognition standard.

Fiscal year 2016 has not been adjusted.

(2)The net carrying amount of the 2019 Notes was classified as a current liability in our consolidated balance sheets as of July 31, 2018 and was classified as a long-term liability for all other prior periods presented.

The net carrying amounts of the 2023 Notes and 2025 Notes were classified as a long-term liability in the periods they were presented.

Refer to Note 10.

Debt in Part II, Item 8 of this Annual Report on Form 10-K for more information on the Notes.

(3)We adopted the new lease accounting standard effective August 1, 2019 on a modified retrospective basis, under which financial results reported in periods prior to fiscal 2020 were not adjusted.

\- 37 -

| [Reports of Independent Registered Public Accounting [removed: Firm](#ic3ab314b04ab4857be358cc28a025f8d_160)] [added: Firm](#i324ab1390dd34e81913b9c704092d31c_160)] | | | [removed: [55](#ic3ab314b04ab4857be358cc28a025f8d_160)] [added: [60](#i324ab1390dd34e81913b9c704092d31c_160)] | | |

| [Management’s Report on Internal Control Over Financial [removed: Reporting](#ic3ab314b04ab4857be358cc28a025f8d_166)] [added: Reporting](#i324ab1390dd34e81913b9c704092d31c_166)] | | | [removed: [59](#ic3ab314b04ab4857be358cc28a025f8d_166)] [added: [63](#i324ab1390dd34e81913b9c704092d31c_166)] | | |

| [Consolidated Balance [removed: Sheets](#ic3ab314b04ab4857be358cc28a025f8d_169)] [added: Sheets](#i324ab1390dd34e81913b9c704092d31c_169)] | | | [removed: [60](#ic3ab314b04ab4857be358cc28a025f8d_169)] [added: [64](#i324ab1390dd34e81913b9c704092d31c_169)] | | |

| [Consolidated Statements of [removed: Operations](#ic3ab314b04ab4857be358cc28a025f8d_175)] [added: Operations](#i324ab1390dd34e81913b9c704092d31c_175)] | | | [removed: [61](#ic3ab314b04ab4857be358cc28a025f8d_175)] [added: [65](#i324ab1390dd34e81913b9c704092d31c_175)] | | |

| [Consolidated Statements of Comprehensive [removed: Loss](#ic3ab314b04ab4857be358cc28a025f8d_178)] [added: Loss](#i324ab1390dd34e81913b9c704092d31c_178)] | | | [removed: [62](#ic3ab314b04ab4857be358cc28a025f8d_178)] [added: [66](#i324ab1390dd34e81913b9c704092d31c_178)] | | |

| [Consolidated Statements of Stockholders’ [removed: Equity](#ic3ab314b04ab4857be358cc28a025f8d_181)] [added: Equity](#i324ab1390dd34e81913b9c704092d31c_181)] | | | [removed: [63](#ic3ab314b04ab4857be358cc28a025f8d_181)] [added: [67](#i324ab1390dd34e81913b9c704092d31c_181)] | | |

| [Consolidated Statements of Cash [removed: Flows](#ic3ab314b04ab4857be358cc28a025f8d_184)] [added: Flows](#i324ab1390dd34e81913b9c704092d31c_184)] | | | [removed: [64](#ic3ab314b04ab4857be358cc28a025f8d_184)] [added: [68](#i324ab1390dd34e81913b9c704092d31c_184)] | | |

| [Notes to Consolidated Financial [removed: Statements](#ic3ab314b04ab4857be358cc28a025f8d_187)] [added: Statements](#i324ab1390dd34e81913b9c704092d31c_187)] | | | [removed: [66](#ic3ab314b04ab4857be358cc28a025f8d_187)] [added: [69](#i324ab1390dd34e81913b9c704092d31c_187)] | | |

We have audited the accompanying consolidated balance sheets of Palo Alto Networks, Inc. (the Company) as of July 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] the related consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows for each of the three years in the period ended July 31, [removed: 2020,] [added: 2021,] and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at July 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] and the results of its operations and its cash flows for each of the three years in the period ended July 31, [removed: 2020,] [added: 2021,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of July 31, [removed: 2020,] [added: 2021,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated September [removed: 4, 2020] [added: 3, 2021] expressed an unqualified opinion thereon.

| *Description of the Matter* | | | | | | As described in Note [removed: 6] [added: 7] to the consolidated financial statements, the Company completed an acquisition of [removed: CloudGenix,] [added: Expanse] Inc. for net consideration of [removed: $402.7] [added: $797.2] million in the year ended July 31, [removed: 2020.] [added: 2021.] The Company accounted for this acquisition as a business combination. Auditing the accounting for the acquisition was complex due to the significant estimation uncertainty in determining the fair values of identified intangible assets, which consisted of developed technology of [removed: $67.2] [added: $123.4] million and customer relationships of [removed: $42.7] [added: $36.9] million. The significant estimation uncertainty was primarily due to the sensitivity of the respective fair values to underlying assumptions about future performance of the acquired business and due to the limited historical data on which to base these assumptions. The significant assumptions used to form the basis of the forecasted results included revenue growth rates and technology migration curves. These significant assumptions were forward-looking and could be affected by future economic and market conditions. | | |

| [added: Convertible senior notes, net] | | | [added: 1,557.9] | | | [removed: Convertible Notes] | | | [added: — | | |]

We have audited Palo Alto Networks, Inc.’s internal control over financial reporting as of July 31, [removed: 2020,] [added: 2021,] based on criteria established in Internal [removed: Control–Integrated] [added: Control—Integrated] Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Palo Alto Networks, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of July 31, [removed: 2020,] [added: 2021,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of July 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] the related consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows for each of the three years in the period ended July 31, [removed: 2020,] [added: 2021,] and the related notes and our report dated September [removed: 4, 2020] [added: 3, 2021] expressed an unqualified opinion thereon.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of July 31, [removed: 2020,] [added: 2021,] based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control - Integrated Framework (2013 framework).

Based on that assessment, management concluded that, as of July 31, [removed: 2020,] [added: 2021,] the Company’s internal control over financial reporting was effective.

The effectiveness of the Company’s internal control over financial reporting as of July 31, [removed: 2020,] [added: 2021,] has been audited by Ernst & Young LLP, the independent registered public accounting firm that audits the Company’s Consolidated Financial Statements, as stated in their report preceding this report, which expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of July 31, [removed: 2020.][added: 2021.]

| | | | July 31, | | | | | | | | | [removed: | | | | | |]

| | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [added: 2019] | | |

| Assets | | | | | | | | | | | | [removed: | | | | | |]

| Current assets: | | | | | | | | | | | | [removed: | | | | | |]

| Cash and cash equivalents | | | $ | [removed: 2,958.0] [added: 1,874.2] | | | | | $ | [removed: 961.4] [added: 2,958.0] | | | | | [added: $] | [added: 961.4] | |

| Short-term investments | | | [removed: 789.8 | | | | | | 1,841.7] [added: 1,026.9] | | | | | | [added: 789.8] | | |

| Accounts receivable, net of allowance for [removed: doubtful accounts] [added: credit losses] of [removed: $2.3] [added: $11.2] and [removed: $0.8] [added: $2.3] at July 31, [removed: 2020] [added: 2021] and July 31, [removed: 2019,] [added: 2020,] respectively | | | [removed: 1,037.1 | | | | | | 582.4] [added: 1,240.4] | | | | | | [added: 1,037.1] | | |

| Prepaid expenses and other current [removed: assets] [added: assets:] | | | [removed: 344.3] | | | | | | [removed: 279.3] | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Total current assets | | | [removed: 5,129.2 | | | | | | 3,664.8] [added: 4,647.3] | | | | | | [added: 5,129.2] | | |

| Property and equipment, net | | | [removed: 348.1 | | | | | | 296.0] [added: 318.4] | | | | | | [added: 348.1] | | |

| Operating lease right-of-use assets | | | [removed: 258.7 | | | | | | —] [added: 262.9] | | | | | | [added: 258.7] | | |

| Long-term investments | | | [removed: 554.4 | | | | | | 575.4] [added: 888.3] | | | | | | [added: 554.4] | | |

| Goodwill | | | [removed: 1,812.9 | | | | | | 1,352.3] [added: 2,710.1] | | | | | | [added: 1,812.9] | | |

| Intangible assets, net | | | [removed: 358.2 | | | | | | 280.6] [added: 498.6] | | | | | | [added: 358.2] | | |

| Other [removed: assets] [added: assets:] | | | [removed: 603.9] | | | | | | [removed: 423.1] | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Total assets | | | $ | [removed: 9,065.4] [added: 10,241.6] | | | | | $ | [removed: 6,592.2 | | | | | |] [added: 9,065.4] | |

| [removed: Liabilities] [added: Liabilities, temporary equity] and stockholders’ equity | | | | | | | | | | | | [removed: | | | | | |]

| Current liabilities: | | | | | | | | | | | | [removed: | | | | | |]

| Accounts payable | | | $ | [removed: 63.6] [added: 56.9] | | | | | $ | [removed: 73.3 | | | | | |] [added: 63.6] | |

| Accrued compensation | | | [removed: 322.2 | | | | | | 235.5] [added: 430.6] | | | | | | [added: 322.2] | | |

| Accrued and other liabilities | | | [removed: 256.8 | | | | | | 162.4] [added: 329.4] | | | | | | [added: 256.8] | | |

\- 59 \-

[Table of](#i324ab1390dd34e81913b9c704092d31c_7) [Contents](#i324ab1390dd34e81913b9c704092d31c_7)

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[Table of](#i324ab1390dd34e81913b9c704092d31c_7) [Contents](#i324ab1390dd34e81913b9c704092d31c_7)

September 3, 2021

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[Table of](#i324ab1390dd34e81913b9c704092d31c_7) [Contents](#i324ab1390dd34e81913b9c704092d31c_7)

September 3, 2021

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[Table of](#i324ab1390dd34e81913b9c704092d31c_7) [Contents](#i324ab1390dd34e81913b9c704092d31c_7)

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[Table of](#i324ab1390dd34e81913b9c704092d31c_7) [Contents](#i324ab1390dd34e81913b9c704092d31c_7)

| | | | 2021 | | | | | | 2020 | | |

| Temporary equity | | | 129.1 | | | | | | — | | |

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[Table of](#i324ab1390dd34e81913b9c704092d31c_7) [Contents](#i324ab1390dd34e81913b9c704092d31c_7)

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[Table of](#i324ab1390dd34e81913b9c704092d31c_7) [Contents](#i324ab1390dd34e81913b9c704092d31c_7)

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[Table of](#i324ab1390dd34e81913b9c704092d31c_7) [Contents](#i324ab1390dd34e81913b9c704092d31c_7)

| Net loss | | | — | | | | | | — | | | | | | — | | | | | | (498.9) | | | | | | (498.9) | | |

| Issuance of common and restricted common stock in connection with acquisitions | | | 1.3 | | | | | | 340.7 | | | | | | — | | | | | | — | | | | | | 340.7 | | |

| Balance as of July 31, 2021 | | | 97.3 | | | | | | $ | 2,311.2 | | | | | $ | (9.9) | | | | | $ | (1,666.8) | | | | | $ | 634.5 | |

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[Table of](#i324ab1390dd34e81913b9c704092d31c_7) [Contents](#i324ab1390dd34e81913b9c704092d31c_7)

| Net loss | | | $ | (498.9) | | | | | $ | (267.0) | | | | | $ | (81.9) | |

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[Table of](#i324ab1390dd34e81913b9c704092d31c_7) [Contents](#i324ab1390dd34e81913b9c704092d31c_7)

Our financing receivables are with certain qualified end-customers.

As of July 31, 2021, four distributors individually represented 10% or more of our gross accounts receivable, and in the aggregate represented 56.6% of our gross accounts receivable.

As of July 31, 2021, four end-customers represented 10% or more of our gross financing receivables, and in aggregate represented 67.0% of our gross financing receivables.

For fiscal 2021, three distributors represented 10% or more of our total revenue, representing 33.2%, 12.2%, and 10.6%, respectively.

No single end-customer accounted for more than 10% of our total revenue in fiscal 2021, 2020, or 2019.

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[Table of](#i324ab1390dd34e81913b9c704092d31c_7) [Contents](#i324ab1390dd34e81913b9c704092d31c_7)

When the fair value of a security is below its amortized cost, the amortized cost will be reduced to its fair value if it is more likely than not that we are required to sell the impaired security before recovery of its amortized cost basis, or we have the intention to sell the security.

If neither of these conditions are met, we determine whether the impairment is due to credit losses by comparing the present value of the expected cash flows of the security with its amortized cost basis.

The amount of impairment recognized is limited to the excess of the amortized cost over the fair value of the security.

An allowance for credit losses for the excess of amortized cost over the expected cash flows is recorded in other income, net in our consolidated statements of operations.

Impairment losses that are not credit-related are included in accumulated other comprehensive income (loss) (“AOCI”) in stockholders’ equity.

\- 54 -

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

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| *Description of the Matter* | | | | | | As described in Note 10 to the consolidated financial statements, the Company issued $2.0 billion of convertible senior notes due in 2025 (Convertible Notes) in the year ended July 31, 2020. The accounting for the transaction was complex, as it required assessment as to whether features, other than the conversion feature, required bifurcation and separate valuation. Additionally, the transaction was complex as it required valuation of the conversion feature in the debt instrument, which involved estimation of the fair value of the debt instrument absent of any conversion feature, and evaluation of the appropriate classification of the conversion feature in the financial statements. Auditing the Company’s accounting for the Convertible Notes was complex due to the significant judgment required in determining the liability component of the Convertible Notes as well as the balance sheet classification of the elements of the Convertible Notes. The Company estimated the fair value of the liability component of the Convertible Notes, absent any embedded conversion features, using an income approach which considers the instrument’s discounted cash flow model with a risk adjusted yield. Additionally, the Company performed a detailed analysis of the terms of the Convertible Notes to identify whether any derivatives that required separate mark-to-market accounting under applicable accounting guidance were present. | | |

\- 56 -

| *How We Addressed the Matter in Our Audit* | | | | | | We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s Convertible Notes. For example, we tested the Company’s controls over the initial recognition and measurement of the Convertible Notes, including the recording of the associated liability and equity components. We also tested the evaluation of the Convertible Notes and the identification and evaluation of specific features and the related accounting. To test the accounting for the Convertible Notes, our audit procedures included, among others, reading the underlying Convertible Notes agreements, testing management’s application of the relevant accounting guidance, and involving a specialist to assist us in the evaluation of the Company's valuation methodology and testing of the significant assumptions. Our testing of the fair value of the liability component, included, among other procedures, evaluating the Company’s selection of the valuation methodology and significant assumptions used by the Company, and evaluating the completeness and accuracy of the underlying data supporting the significant assumptions. Specifically, when assessing the key assumptions, we evaluated the appropriateness of the Company’s estimates of its credit risk, volatility, dividend yield and the market risk free rate as well as its analysis of comparable issuances of debt securities by companies with a similar credit risk rating. | | |

September 4, 2020

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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Balance as of July 31, 2017 | | | 91.5 | | | | | | $ | 1,599.7 | | | | | $ | (3.4) | | | | | $ | (668.5) | | | | | $ | 927.8 | | | | | | | |

| Equity component of convertible senior notes, net | | | — | | | | | | 398.7 | | | | | | — | | | | | | — | | | | | | 398.7 | | | | | | | | |

\- 63 -

| Proceeds from issuance of warrants | | | 202.8 | | | | | | — | | | | | | 145.4 | | | | | | | | | | | | | | |

| Purchase of note hedges | | | (370.8) | | | | | | — | | | | | | (332.0) | | | | | | | | | | | | | | |

\- 64 -

| Property and equipment acquired through lease incentives | | | $ | — | | | | | $ | — | | | | | $ | 37.8 | | | | | | | | | | | | | |

\- 65 -

As of July 31, 2020, one distributor accounted for over 10% of our gross accounts receivable representing 31.5%.

For fiscal 2020, four distributors accounted for over 10% of our total revenue, representing 34.4%, 12.1%, 11.8%, and 10.5% each.

Foreign currency denominated income and expenses have been remeasured using the average exchange rates in effect during each period.

\- 66 -

These investments are considered impaired when a decline in fair value is judged to be other-than-temporary.

We consult with our investment managers and consider available quantitative and qualitative evidence in evaluating potential impairment of our investments on a quarterly basis.

If the cost of an individual investment exceeds its fair value, we evaluate, among other factors, general market conditions, the duration and extent to which the fair value is less than cost, and our intent and ability to hold the investment.

Once a decline in fair value is determined to be other-than-temporary, an impairment charge is recorded and a new cost basis in the investment is established.

As of July 31, 2019, there were no financing receivables on our consolidated balance sheet.

\- 67 -

flow hedge, or is sold.

Acquisition-related in-process research and development represents the fair value of incomplete research and development projects that have not reached technological feasibility as of the date of acquisition.

Initially, these assets are not subject to amortization.

Assets related to projects that have been completed are transferred to developed technology, which are subject to amortization.

\- 98 -

Based on our evaluation, our chief executive officer and chief financial officer concluded that, as of July 31, [removed: 2020,] [added: 2021,] our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission (“SEC”) rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

However there were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended July 31, [removed: 2020] [added: 2021] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

\- 99 -

PART III

Not applicable.

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[Table of](#i324ab1390dd34e81913b9c704092d31c_7) [Contents](#i324ab1390dd34e81913b9c704092d31c_7)

PART III

The information required by this item will be contained in our definitive proxy statement to be filed with the SEC in connection with our [removed: 2020] [added: 2021] annual meeting of stockholders (the “Proxy Statement”), which is expected to be filed not later than 120 days after the end of our fiscal year ended July 31, [removed: 2020,] [added: 2021,] and is incorporated in this report by reference.

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[Table of](#i324ab1390dd34e81913b9c704092d31c_7) [Contents](#i324ab1390dd34e81913b9c704092d31c_7)

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| Exhibit Number | | | | | | Exhibit Description | | | | | | Incorporated by Reference | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: | | | | | | | | | | | |] Form | | | | | | File No. | | | | | | Exhibit | | | | | | Filing Date | | | | | | | | | | | | | | | [removed: | | | | | |]

| [3.1](http://www.sec.gov/Archives/edgar/data/1327567/000119312512415530/d405168dex31.htm) | | | | | | Restated Certificate of Incorporation of the Registrant. | | | | | | 10-K | | | | | | 001-35594 | | | | | | 3.1 | | | | | | October 4, 2012 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: [3.2](http://www.sec.gov/Archives/edgar/data/1327567/000119312518274239/d626827dex31.htm)] [added: [3.2](http://www.sec.gov/Archives/edgar/data/1327567/000132756720000007/panwex32q220.htm)] | | | | | | Amended and Restated Bylaws of the Registrant. | | | | | | 10-Q | | | | | | 001-35594 | | | | | | 3.2 | | | | | | February 25, 2020 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [3.3](http://www.sec.gov/Archives/edgar/data/1327567/000132756716000057/ex31certificateofchangeofr.htm) | | | | | | Certificate of Change of Location of Registered Agent and/or Registered Office. | | | | | | 8-K | | | | | | 001-35594 | | | | | | 3.1 | | | | | | August 30, 2016 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: [4.](http://www.sec.gov/Archives/edgar/data/0001327567/000119312518217281/d471193dex41.htm)[1](http://www.sec.gov/Archives/edgar/data/0001327567/000119312518217281/d471193dex41.htm)] [added: [4.1](http://www.sec.gov/Archives/edgar/data/0001327567/000119312518217281/d471193dex41.htm)] | | | | | | Indenture between the Registrant and U.S. Bank National Association, dated as of July 12, 2018. | | | | | | 8-K | | | | | | 001-35594 | | | | | | 4.1 | | | | | | July 13, 2018 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [4.2](http://www.sec.gov/Archives/edgar/data/0001327567/000119312520163579/d936599dex41.htm) | | | | | | Indenture between the Registrant and U.S. Bank National Association, dated as of June 8, 2020. | | | | | | 8-K | | | | | | 001-35594 | | | | | | 4.1 | | | | | | June 8, 2020 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: [4.](http://www.sec.gov/Archives/edgar/data/0001327567/000119312518217281/d471193dex41.htm)[3](http://www.sec.gov/Archives/edgar/data/0001327567/000119312518217281/d471193dex41.htm)] [added: [4.3](http://www.sec.gov/Archives/edgar/data/0001327567/000119312518217281/d471193dex41.htm)] | | | | | | Form of Global 0.75% Convertible Senior Note due 2023 (included in Exhibit 4.1). | | | | | | 8-K | | | | | | 001-35594 | | | | | | 4.2 | | | | | | July 13, 2018 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [4.4](http://www.sec.gov/Archives/edgar/data/0001327567/000119312520163579/d936599dex41.htm) | | | | | | Form of Global 0.375% Convertible Senior Note due 2023 (included in Exhibit [removed: 4.2).] [added: 4.1).] | | | | | | 8-K | | | | | | 001-35594 | | | | | | 4.2 | | | | | | June 8, 2020 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: [4.5](https://www.sec.gov/Archives/edgar/data/1327567/000132756720000032/panwex45q420.htm)] [added: [4.5](https://www.sec.gov/Archives/edgar/data/1327567/000132756721000029/panwex45q421.htm)] | | | | | | Description of Registrant’s Securities. | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| [10.1](http://www.sec.gov/Archives/edgar/data/1327567/000119312512296699/d318373dex101.htm)* | | | | | | Form of Indemnification Agreement between the Registrant and its directors and officers. | | | | | | S-1/A | | | | | | 333-180620 | | | | | | 10.1 | | | | | | July 9, 2012 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [10.2](http://www.sec.gov/Archives/edgar/data/1327567/000119312512296699/d318373dex102.htm)* | | | | | | 2005 Equity Incentive Plan and related form agreements under 2005 Equity Incentive Plan. | | | | | | S-1/A | | | | | | 333-180620 | | | | | | 10.2 | | | | | | July 9, 2012 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [10.3](http://www.sec.gov/Archives/edgar/data/0001327567/000132756719000038/panwex102q1202012eip.htm)* | | | | | | 2012 Equity Incentive Plan and related form agreements under 2012 Equity Incentive Plan, as amended. | | | | | | 10-Q | | | | | | 001-35594 | | | | | | 10.2 | | | | | | November 26, 2019 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [10.4](http://www.sec.gov/Archives/edgar/data/1327567/000132756717000027/panwex104q417esppplan.htm)* | | | | | | 2012 Employee Stock Purchase Plan and related form agreements under 2012 Employee Stock Purchase Plan, as amended and restated. | | | | | | 10-K | | | | | | 001-35594 | | | | | | 10.4 | | | | | | September 7, 2017 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [10.5](http://www.sec.gov/Archives/edgar/data/1327567/000119312518303084/d634580dex991.htm)* | | | | | | RedLock Inc. 2015 Stock Plan, as amended, and related form agreements under RedLock Inc. 2015 Stock Plan, as amended. | | | | | | S-8 | | | | | | 333-227901 | | | | | | 99.1 | | | | | | October 19, 2018 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [10.6](http://www.sec.gov/Archives/edgar/data/1327567/000119312519094620/d723370dex991.htm)* | | | | | | Demisto, Inc. 2015 Stock Option Plan, as amended. | | | | | | S-8 | | | | | | 333-230663 | | | | | | 99.1 | | | | | | April 1, 2019 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [10.7](http://www.sec.gov/Archives/edgar/data/1327567/000119312519194821/d614827dex991.htm)* | | | | | | Twistlock Ltd. Amended and Restated 2015 Share Option Plan. | | | | | | S-8 | | | | | | 333-232672 | | | | | | 99.1 | | | | | | July 16, 2019 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [10.8](http://www.sec.gov/Archives/edgar/data/1327567/000119312519260766/d795787dex991.htm)* | | | | | | Zingbox, Inc. Stock Incentive Plan, as amended and restated. | | | | | | S-8 | | | | | | 333-234059 | | | | | | 99.1 | | | | | | October 2, 2019 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [10.9](http://www.sec.gov/Archives/edgar/data/1327567/000119312520003856/d850020dex991.htm)* | | | | | | Aporeto, Inc. Amended and Restated 2015 Stock Option and Grant Plan. | | | | | | S-8 | | | | | | 333-235854 | | | | | | 99.1 | | | | | | January 8, 2020 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [10.10](http://www.sec.gov/Archives/edgar/data/1327567/000119312520133786/d849861dex991.htm)* | | | | | | CloudGenix Inc. 2013 Equity Incentive Plan. | | | | | | S-8 | | | | | | 333-238014 | | | | | | 99.1 | | | | | | May 5, 2020 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: [10.](http://www.sec.gov/Archives/edgar/data/1327567/000132756714000043/panwex102q115.htm)[11](http://www.sec.gov/Archives/edgar/data/1327567/000132756714000043/panwex102q115.htm)*] [added: [10.](http://www.sec.gov/Archives/edgar/data/1327567/000132756714000043/panwex102q115.htm)[15](http://www.sec.gov/Archives/edgar/data/1327567/000132756714000043/panwex102q115.htm)*] | | | | | | Employee Incentive Compensation Plan, as amended and restated. | | | | | | 10-Q | | | | | | 001-35594 | | | | | | 10.2 | | | | | | November 25, 2014 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: [10.](http://www.sec.gov/Archives/edgar/data/1327567/000132756717000035/panwex103q118_clawbackpoli.htm)[12](http://www.sec.gov/Archives/edgar/data/1327567/000132756717000035/panwex103q118_clawbackpoli.htm)*] [added: [10.](http://www.sec.gov/Archives/edgar/data/1327567/000132756717000035/panwex103q118_clawbackpoli.htm)[16](http://www.sec.gov/Archives/edgar/data/1327567/000132756717000035/panwex103q118_clawbackpoli.htm)*] | | | | | | Clawback Policy, adopted as of August 29, 2017. | | | | | | 10-Q | | | | | | 001-35594 | | | | | | 10.3 | | | | | | November 21, 2017 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: [10.1](http://www.sec.gov/Archives/edgar/data/1327567/000132756718000006/panwex102q218.htm)[3](http://www.sec.gov/Archives/edgar/data/1327567/000132756718000006/panwex102q218.htm)*] [added: [10.](http://www.sec.gov/Archives/edgar/data/1327567/000132756718000006/panwex102q218.htm)[17](http://www.sec.gov/Archives/edgar/data/1327567/000132756718000006/panwex102q218.htm)*] | | | | | | Executive Incentive Plan effective December 8, 2017. | | | | | | 10-Q | | | | | | 001-35594 | | | | | | 10.2 | | | | | | February 27, 2018 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: [10.1](http://www.sec.gov/Archives/edgar/data/1327567/000119312516745121/d272278dex101.htm)[5](http://www.sec.gov/Archives/edgar/data/1327567/000119312516745121/d272278dex101.htm)*] [added: [10](http://www.sec.gov/Archives/edgar/data/1327567/000119312518299312/d635314dex101.htm)[.23](http://www.sec.gov/Archives/edgar/data/1327567/000119312518299312/d635314dex101.htm)*] | | | | | | Offer Letter between the Registrant and [removed: Mary Pat McCarthy,] [added: Amit K. Singh,] dated October [removed: 13, 2016.] [added: 11, 2018.] | | | | | | 8-K | | | | | | 001-35594 | | | | | | 10.1 | | | | | | October [removed: 24, 2016 | | | | | | | | | | | | | | | | | |] [added: 15, 2018] | | |

| [removed: [10.1](http://www.sec.gov/Archives/edgar/data/1327567/000132756718000004/ex101offerletterjcompeau.htm)[6](http://www.sec.gov/Archives/edgar/data/1327567/000132756718000004/ex101offerletterjcompeau.htm)*] [added: [10](http://www.sec.gov/Archives/edgar/data/1327567/000132756718000004/ex101offerletterjcompeau.htm)[.19](http://www.sec.gov/Archives/edgar/data/1327567/000132756718000004/ex101offerletterjcompeau.htm)*] | | | | | | Offer Letter between the Registrant and Jean Compeau, dated February 22, 2018. | | | | | | 8-K | | | | | | 001-35594 | | | | | | 10.1 | | | | | | February 26, 2018 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: [10.1](http://www.sec.gov/Archives/edgar/data/1327567/000132756718000011/ex101newofferlettermmclaug.htm)[7](http://www.sec.gov/Archives/edgar/data/1327567/000132756718000011/ex101newofferlettermmclaug.htm)*] [added: [10.](http://www.sec.gov/Archives/edgar/data/1327567/000132756718000011/ex101newofferlettermmclaug.htm)[21](http://www.sec.gov/Archives/edgar/data/1327567/000132756718000011/ex101newofferlettermmclaug.htm)*] | | | | | | New Offer Letter between the Registrant and Mark D. McLaughlin, dated May 31, 2018. | | | | | | 8-K | | | | | | 001-35594 | | | | | | 10.1 | | | | | | June 4, 2018 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: [10.1](http://www.sec.gov/Archives/edgar/data/1327567/000132756718000011/ex102offerletternarora.htm)[8](http://www.sec.gov/Archives/edgar/data/1327567/000132756718000011/ex102offerletternarora.htm)*] [added: [10.](http://www.sec.gov/Archives/edgar/data/1327567/000132756718000011/ex102offerletternarora.htm)[2](http://www.sec.gov/Archives/edgar/data/1327567/000132756718000011/ex102offerletternarora.htm)[2](http://www.sec.gov/Archives/edgar/data/1327567/000132756718000011/ex102offerletternarora.htm)*] | | | | | | Offer Letter between the Registrant and Nikesh Arora, dated May 30, 2018. | | | | | | 8-K | | | | | | 001-35594 | | | | | | 10.2 | | | | | | June 4, 2018 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: [10.](http://www.sec.gov/Archives/edgar/data/1327567/000119312518299312/d635314dex101.htm)[19](http://www.sec.gov/Archives/edgar/data/1327567/000119312518299312/d635314dex101.htm)*] [added: [10.26](http://www.sec.gov/Archives/edgar/data/1327567/000119312521244832/d204334dex101.htm)*] | | | | | | Offer Letter between the Registrant and [removed: Amit K. Singh,] [added: William “BJ” Jenkins] dated [removed: October 11, 2018.] [added: July 27, 2021.] | | | | | | 8-K | | | | | | 001-35594 | | | | | | 10.1 | | | | | | [removed: October 15, 2018 | | | | | | | | | | | | | | | | | |] [added: August 12, 2021] | | |

| [removed: [10.2](http://www.sec.gov/Archives/edgar/data/1327567/000132756718000031/panwex104q119.htm)[0](http://www.sec.gov/Archives/edgar/data/1327567/000132756718000031/panwex104q119.htm)*] [added: [10.](http://www.sec.gov/Archives/edgar/data/1327567/000132756718000031/panwex104q119.htm)[24](http://www.sec.gov/Archives/edgar/data/1327567/000132756718000031/panwex104q119.htm)*] | | | | | | Confirmatory Employment Letter between the Registrant and Lee Klarich, dated December 19, 2011. | | | | | | 10-Q | | | | | | 001-35594 | | | | | | 10.4 | | | | | | November 30, 2018 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: [10.2](http://www.sec.gov/Archives/edgar/data/1327567/000132756719000011/ex101offerlettertwohill.htm)[1](http://www.sec.gov/Archives/edgar/data/1327567/000132756719000011/ex101offerlettertwohill.htm)*] [added: [10.2](http://www.sec.gov/Archives/edgar/data/1327567/000132756719000016/panwex101q319.htm)[8](http://www.sec.gov/Archives/edgar/data/1327567/000132756719000016/panwex101q319.htm)] | | | | | | [removed: Offer Letter] [added: Amended and Restated Flextronics Manufacturing Services Agreement, by and] between the Registrant and [removed: Lorraine Twohill,] [added: Flextronics Telecom Systems Ltd.,] dated April [removed: 10,] [added: 1,] 2019. | | | | | | [removed: 8-K] [added: 10-Q] | | | | | | 001-35594 | | | | | | 10.1 | | | | | | [removed: April 15,] [added: May 30,] 2019 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: [10.24](http://www.sec.gov/Archives/edgar/data/1327567/000119312512398433/d414151dex101.htm)*] [added: [10.25](https://www.sec.gov/Archives/edgar/data/0001327567/000119312521087516/d160663dex101.htm)*] | | | | | | [added: Addendum to] Offer Letter [added: by and] between the Registrant and [removed: John Donovan,] [added: Dipak Golechha,] dated [removed: September 14, 2012.] [added: March 17, 2021.] | | | | | | 8-K | | | | | | 001-35594 | | | | | | 10.1 | | | | | | [removed: September 20, 2012 | | | | | | | | | | | | | | | | | |] [added: March 19, 2021] | | |

| [removed: [10.26](http://www.sec.gov/Archives/edgar/data/1327567/000119312513241542/d546594dex101.htm)*] [added: [10.](http://www.sec.gov/Archives/edgar/data/1327567/000119312514215060/d734043dex101.htm)[3](http://www.sec.gov/Archives/edgar/data/1327567/000119312514215060/d734043dex101.htm)[0](http://www.sec.gov/Archives/edgar/data/1327567/000119312514215060/d734043dex101.htm)] | | | | | | [removed: Offer Letter] [added: Settlement, Release and Cross-License Agreement, dated May 27, 2014, by and] between the Registrant and [removed: Carl Eschenbach, dated May 9, 2013.] [added: Juniper Networks, Inc.] | | | | | | 8-K | | | | | | 001-35594 | | | | | | 10.1 | | | | | | May [removed: 30, 2013 | | | | | | | | | | | | | | | | | |] [added: 28, 2014] | | |

| [removed: [10.](http://www.sec.gov/Archives/edgar/data/1327567/000119312518217281/d471193dex101.htm)[29](http://www.sec.gov/Archives/edgar/data/1327567/000119312518217281/d471193dex101.htm)] [added: [10](http://www.sec.gov/Archives/edgar/data/1327567/000119312518217281/d471193dex101.htm)[.3](http://www.sec.gov/Archives/edgar/data/1327567/000119312518217281/d471193dex101.htm)[1](http://www.sec.gov/Archives/edgar/data/1327567/000119312518217281/d471193dex101.htm)] | | | | | | Purchase Agreement, dated July 10, 2018, by and among the Registrant and Citigroup Global Markets Inc. and Wells Fargo Securities, LLC, as representatives of the several Initial Purchasers named therein. | | | | | | 8-K | | | | | | 001-35594 | | | | | | 10.1 | | | | | | July 13, 2018 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: [10.3](http://www.sec.gov/Archives/edgar/data/1327567/000119312518217281/d471193dex102.htm)[0](http://www.sec.gov/Archives/edgar/data/1327567/000119312518217281/d471193dex102.htm)] [added: [10.](http://www.sec.gov/Archives/edgar/data/1327567/000119312518217281/d471193dex102.htm)[3](http://www.sec.gov/Archives/edgar/data/1327567/000119312518217281/d471193dex102.htm)[2](http://www.sec.gov/Archives/edgar/data/1327567/000119312518217281/d471193dex102.htm)] | | | | | | Form of Convertible Note Hedge Confirmation. | | | | | | 8-K | | | | | | 001-35594 | | | | | | 10.2 | | | | | | July 13, 2018 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: [10.3](http://www.sec.gov/Archives/edgar/data/1327567/000119312518217281/d471193dex103.htm)[1](http://www.sec.gov/Archives/edgar/data/1327567/000119312518217281/d471193dex103.htm)] [added: [10.](http://www.sec.gov/Archives/edgar/data/1327567/000119312518217281/d471193dex103.htm)[3](http://www.sec.gov/Archives/edgar/data/1327567/000119312518217281/d471193dex103.htm)[3](http://www.sec.gov/Archives/edgar/data/1327567/000119312518217281/d471193dex103.htm)] | | | | | | Form of Warrant Confirmation. | | | | | | 8-K | | | | | | 001-35594 | | | | | | 10.3 | | | | | | July 13, 2018 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: [10.32](http://www.sec.gov/Archives/edgar/data/1327567/000119312520163579/d936599dex101.htm)] [added: [10.](http://www.sec.gov/Archives/edgar/data/1327567/000119312520163579/d936599dex101.htm)[3](http://www.sec.gov/Archives/edgar/data/1327567/000119312520163579/d936599dex101.htm)[4](http://www.sec.gov/Archives/edgar/data/1327567/000119312520163579/d936599dex101.htm)] | | | | | | Purchase Agreement, dated June 3, 2020, by and among the Registrant and Morgan Stanley & Co. LLC and Citigroup Global Markets Inc., as representatives of the several Initial Purchasers named therein. | | | | | | 8-K | | | | | | 001-35594 | | | | | | 10.1 | | | | | | June 8, 2020 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: [10.33](http://www.sec.gov/Archives/edgar/data/1327567/000119312520163579/d936599dex102.htm)] [added: [10.](http://www.sec.gov/Archives/edgar/data/1327567/000119312520163579/d936599dex102.htm)[3](http://www.sec.gov/Archives/edgar/data/1327567/000119312520163579/d936599dex102.htm)[5](http://www.sec.gov/Archives/edgar/data/1327567/000119312520163579/d936599dex102.htm)] | | | | | | Form of Convertible Note Hedge Confirmation. | | | | | | 8-K | | | | | | 001-35594 | | | | | | 10.2 | | | | | | June 8, 2020 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: [10.34](http://www.sec.gov/Archives/edgar/data/1327567/000119312520163579/d936599dex103.htm)] [added: [10.](http://www.sec.gov/Archives/edgar/data/1327567/000119312520163579/d936599dex103.htm)[3](http://www.sec.gov/Archives/edgar/data/1327567/000119312520163579/d936599dex103.htm)[6](http://www.sec.gov/Archives/edgar/data/1327567/000119312520163579/d936599dex103.htm)] | | | | | | Form of Warrant Confirmation. | | | | | | 8-K | | | | | | 001-35594 | | | | | | 10.3 | | | | | | June 8, 2020 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: [10.3](http://www.sec.gov/Archives/edgar/data/1327567/000132756715000027/panwex1029q415buildinge.htm)[5](http://www.sec.gov/Archives/edgar/data/1327567/000132756715000027/panwex1029q415buildinge.htm)] [added: [10.](http://www.sec.gov/Archives/edgar/data/1327567/000132756715000027/panwex1029q415buildinge.htm)[3](http://www.sec.gov/Archives/edgar/data/1327567/000132756715000027/panwex1029q415buildinge.htm)[7](http://www.sec.gov/Archives/edgar/data/1327567/000132756715000027/panwex1029q415buildinge.htm)] | | | | | | Lease between the Registrant and Santa Clara Campus Property Owner I LLC, dated May 28, 2015. | | | | | | 10-K | | | | | | 001-35594 | | | | | | 10.29 | | | | | | September 17, 2015 | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: [10.3](http://www.sec.gov/Archives/edgar/data/1327567/000132756715000027/panwex1030q415buidlingf.htm)[6](http://www.sec.gov/Archives/edgar/data/1327567/000132756715000027/panwex1030q415buidlingf.htm)] [added: [10.](http://www.sec.gov/Archives/edgar/data/1327567/000132756715000027/panwex1030q415buidlingf.htm)[3](http://www.sec.gov/Archives/edgar/data/1327567/000132756715000027/panwex1030q415buidlingf.htm)[8](http://www.sec.gov/Archives/edgar/data/1327567/000132756715000027/panwex1030q415buidlingf.htm)] | | | | | | Lease between the Registrant and Santa Clara Campus Property Owner I LLC, dated May 28, 2015. | | | | | | 10-K | | | | | | 001-35594 | | | | | | 10.30 | | | | | | September 17, 2015 | | | [removed: | | | | | | | | | | | | | | | | | |]

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[Table of](#i324ab1390dd34e81913b9c704092d31c_7) [Contents](#i324ab1390dd34e81913b9c704092d31c_7)

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Exhibit Number | | | | | | Exhibit Description | | | | | | Incorporated by Reference | | | | | | | | | | | | | | | | | | | | |

| Form | | | | | | File No. | | | | | | Exhibit | | | | | | Filing Date | | | | | | | | | | | | | | |

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| [10.1](http://www.sec.gov/Archives/edgar/data/1327567/000119312520266352/d99009dex991.htm)[1](http://www.sec.gov/Archives/edgar/data/1327567/000119312520266352/d99009dex991.htm)* | | | | | | Crypsis Group Holdings, LLC 2017 Equity Incentive Plan. | | | | | | S-8 | | | | | | 333-249387 | | | | | | 99.1 | | | | | | October 8, 2020 | | |

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| [10.12](http://www.sec.gov/Archives/edgar/data/1327567/000119312520320091/d23873dex991.htm)* | | | | | | Sinefa Group, Inc. 2020 Stock Plan. | | | | | | S-8 | | | | | | 333-251423 | | | | | | 99.1 | | | | | | December 17, 2020 | | |

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| [10.13](http://www.sec.gov/Archives/edgar/data/1327567/000119312520320099/d35944dex991.htm)* | | | | | | Expanse Holding Company, Inc. Amended and Restated 2012 Stock Incentive Plan. | | | | | | S-8 | | | | | | 333-251425 | | | | | | 99.1 | | | | | | December 17, 2020 | | |

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| [10.14](http://www.sec.gov/Archives/edgar/data/1327567/000119312521074955/d51651dex991.htm)* | | | | | | Bridgecrew, Inc. 2019 Stock Incentive Plan. | | | | | | S-8 | | | | | | 333-254042 | | | | | | 99.1 | | | | | | March 9, 2021 | | |

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| [10.18](https://www.sec.gov/Archives/edgar/data/0001327567/000132756720000041/panwex101q121.htm)* | | | | | | Employment Agreement between Palo Alto Networks (Israel Analytics) Ltd. and Nir Zuk, dated August 18, 2020. | | | | | | 10-Q | | | | | | 001-35594 | | | | | | 10.1 | | | | | | November 19, 2020 | | |

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| [10.](https://www.sec.gov/Archives/edgar/data/0001327567/000132756721000014/panw-ex101q321.htm)[2](https://www.sec.gov/Archives/edgar/data/0001327567/000132756721000014/panw-ex101q321.htm)[0](https://www.sec.gov/Archives/edgar/data/0001327567/000132756721000014/panw-ex101q321.htm)* | | | | | | Addendum to Offer Letter by and between the Registrant and Jean Compeau, dated March 17, 2021. | | | | | | 10-Q | | | | | | 001-35594 | | | | | | 10.1 | | | | | | May 21, 2021 | | |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

\- 101 -

| [10.1](http://www.sec.gov/Archives/edgar/data/1327567/000119312512153764/d318373dex108.htm)[4](http://www.sec.gov/Archives/edgar/data/1327567/000119312512153764/d318373dex108.htm)* | | | | | | Letter Agreement between the Registrant and Nir Zuk, dated December 19, 2011. | | | | | | S-1 | | | | | | 333-180620 | | | | | | 10.8 | | | | | | April 6, 2012 | | | | | | | | | | | | | | | | | | | | |

| [10.2](http://www.sec.gov/Archives/edgar/data/1327567/000132756719000011/ex102offerletterkey.htm)[2](http://www.sec.gov/Archives/edgar/data/1327567/000132756719000011/ex102offerletterkey.htm)* | | | | | | Offer Letter between the Registrant and Rt Hon Sir John Key, dated April 10, 2019. | | | | | | 8-K | | | | | | 001-35594 | | | | | | 10.2 | | | | | | April 15, 2019 | | | | | | | | | | | | | | | | | | | | |

| [10.23](http://www.sec.gov/Archives/edgar/data/1327567/000119312520176553/d921076dex101.htm)* | | | | | | Offer Letter between the Registrant and Luis Felipe Visoso, dated June 19, 2020. | | | | | | 8-K | | | | | | 001-35594 | | | | | | 10.1 | | | | | | June 23, 2020 | | | | | | | | | | | | | | | | | | | | |

| [10.25](http://www.sec.gov/Archives/edgar/data/1327567/000119312512153764/d318373dex1013.htm)* | | | | | | Offer Letter between the Registrant and Daniel J. Warmenhoven, dated February 14, 2012. | | | | | | S-1 | | | | | | 333-180620 | | | | | | 10.13 | | | | | | April 6, 2012 | | | | | | | | | | | | | | | | | | | | |

| [10.2](http://www.sec.gov/Archives/edgar/data/1327567/000132756719000016/panwex101q319.htm)[7](http://www.sec.gov/Archives/edgar/data/1327567/000132756719000016/panwex101q319.htm) | | | | | | Amended and Restated Flextronics Manufacturing Services Agreement, by and between the Registrant and Flextronics Telecom Systems Ltd., dated April 1, 2019. | | | | | | 10-Q | | | | | | 001-35594 | | | | | | 10.1 | | | | | | May 30, 2019 | | | | | | | | | | | | | | | | | | | | |

| [10.2](http://www.sec.gov/Archives/edgar/data/1327567/000119312514215060/d734043dex101.htm)[8](http://www.sec.gov/Archives/edgar/data/1327567/000119312514215060/d734043dex101.htm) | | | | | | Settlement, Release and Cross-License Agreement, dated May 27, 2014, by and between the Registrant and Juniper Networks, Inc. | | | | | | 8-K | | | | | | 001-35594 | | | | | | 10.1 | | | | | | May 28, 2014 | | | | | | | | | | | | | | | | | | | | |

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| [10.54](http://www.sec.gov/Archives/edgar/data/1327567/000119312519319166/d849210dex101.htm) | | | | | | Lease Termination Agreement (4301 Great America Parkway, Santa Clara, California). | | | | | | 8-K | | | | | | 001-35594 | | | | | | 10.1 | | | | | | December 19, 2019 | | | | | | | | | | | | | | | | | | | | |

| [10.55](http://www.sec.gov/Archives/edgar/data/1327567/000119312519319166/d849210dex102.htm) | | | | | | Lease Termination Agreement (4401 Great America Parkway, Santa Clara, California) | | | | | | 8-K | | | | | | 001-35594 | | | | | | 10.2 | | | | | | December 19, 2019 | | | | | | | | | | | | | | | | | | | | |

| [10.56](http://www.sec.gov/Archives/edgar/data/1327567/000132756720000017/panwex101q320morgansta.htm) | | | | | | Fixed Dollar Accelerated Share Repurchase Transaction Confirmation, dated February 26, 2020 between Palo Alto Networks, Inc. and Morgan Stanley & Co. LLC | | | | | | 10-Q | | | | | | 001-35594 | | | | | | 10.1 | | | | | | May 22, 2020 | | | | | | | | | | | | | | | | | | | | |

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| /s/ LUIS FELIPE VISOSO | | | | | | Chief Financial Officer (Principal Financial Officer) | | | | | | September 4, 2020 | | | | | | | | |

| Luis Felipe Visoso | | | | | | | | | | | | | | | | | | | | |

| /s/ DANIEL J. WARMENHOVEN | | | | | | Director | | | | | | September 4, 2020 | | | | | | | | |

| Daniel J. Warmenhoven | | | | | | | | | | | | | | | | | | | | |