On April 11, 2024, Palo Alto Networks Inc. received a letter from the United States Securities and Exchange Commission (SEC) regarding its Form 10-Q for the fiscal quarter ended January 31, 2024. The SEC's review was limited to the financial statements and related disclosures, particularly focusing on the company's provision for income taxes. The SEC has requested Palo Alto Networks to provide a detailed explanation of the change in valuation allowance that resulted in a net tax benefit of $1.5 billion for the quarter. This includes a deferred tax benefit of $3.2 billion, offset by a deferred tax expense of $1.7 billion related to the U.S. federal indirect tax effect of foreign deferred taxes. The SEC has asked for an expanded discussion on the...Show More

On April 11, 2024, Palo Alto Networks Inc. received a letter from the United States Securities and Exchange Commission (SEC) regarding its Form 10-Q for the fiscal quarter ended January 31, 2024. The SEC's review was limited to the financial statements and related disclosures, particularly focusing on the company's provision for income taxes. The SEC has requested Palo Alto Networks to provide a detailed explanation of the change in valuation allowance that resulted in a net tax benefit of $1.5 billion for the quarter. This includes a deferred tax benefit of $3.2 billion, offset by a deferred tax expense of $1.7 billion related to the U.S. federal indirect tax effect of foreign deferred taxes. The SEC has asked for an expanded discussion on the timing and reasons for these figures, as well as the nature and timing of the foreign deferred taxes. Additionally, the SEC seeks information on trends in profitability that underlie the company's analysis. Palo Alto Networks has been given ten business days to respond to the SEC's comment or to provide a timeline for their response. The SEC has also reminded the company of its responsibility for the accuracy and adequacy of its disclosures.