Palo Alto : 2023 Annual Report & Proxy

WHAT WE DO

Palo Alto Networks is the world's cybersecurity leader. We innovate to outpace cyberthreats so that organizations can embrace technology with confidence. We provide next-gen solutions to thousands of customers across the globe, across all sectors. Our best-in-class cybersecurity platforms and services are strengthened by industry-leading threat intelligence and state-of-the-art automation.

Whether deploying our products to enable the Zero Trust Enterprise, responding to a security incident, or partnering to deliver better security outcomes through a world-class partner ecosystem, we're committed to helping ensure each day is safer than the one before. It's what makes us the cybersecurity partner of choice.

OUR VISION

Our vision is a world where each day is safer and more secure than the one before

Letter from the Chair

Our strategy is resonating with customers, driving continued consolidation, and delivering superior security outcomes.

Dear Fellow Stockholders:

Fiscal 2023 required a commitment to stellar execution, and we are proud of the performance that our employees delivered throughout the year. Despite an evolving and unpredictable macroeconomic environment, we delivered meaningful growth, met our commitments, and advanced our long-term strategy.

Fiscal 2023 was another year of strong financial performance at Palo Alto Networks. Our billings of $9.19 billion (a 23% year-over- year increase), revenue of $6.89 billion (a 25% year-over-year increase), and NGS ARR of $2.95 billion (a 56% year-over-year increase) demonstrate that our platform strategy is deeply resonating with customers. Our SASE and Cortex products each achieved over $1 billion in bookings during fiscal 2023, and our Prisma Cloud product exceeded $500 million in ARR. We are particularly proud of the traction that our XSIAM product is achieving, with over $200 million in bookings within the first year of release. In June, we joined the S&P 500, which reflects our consistent top-line and bottom-line execution.

More than ever, our services are critical to the sanctity of our digital way of life. Governments, intelligence experts, and policymakers are embracing a truth that we have long known - that organizations must embrace new approaches to implementing security solutions to defeat motivated, well-financed and ever more sophisticated cyber attackers. It is precisely for this reason that we invested over $1.6 billion in fiscal 2023 in research and development so that our 4,400 engineers, data scientists and other experts keep us on the bleeding edge of cybersecurity invention. Since fiscal 2019, we have deployed over 180 major product releases and have received over 20 industry recognitions.

This heritage of innovation - and our instinct to always have an eye on the frontier of technological change - uniquely prepares us to harness the power of a new generation of artificial intelligence tools. We recognized early how important AI would be to cybersecurity to ensure that our customers enjoy cyber protections that meet and defeat rapidly evolving cyber threats. Generative AI technology will accelerate the promise of AI. We embrace this signal moment of change for our company, our industry and the broader economy and will lead in AI-powered cybersecurity solutions.

Of course, none of these accomplishments are possible without the dedication and engagement of our over 13,000 global employees as of July 31, 2023. We continue to prioritize an employee-centric people strategy grounded on core tenants of personalization and choice that are built upon our core values of collaboration, execution, integrity, inclusion and disruption. We are proud of the workplace recognitions that the company received in fiscal 2023, including Newsweek's "Most Loved Workplace", Glassdoor's "Best Places to Work" and multiple award categories from Comparably, InHerSight and Military Friendly.

* * * * *

As in the past, this year's Proxy Statement is constructed to maximize clarity and understanding about the company's strategies, successes and challenges. Several of our key initiatives are worth prefacing here.

Stockholder Engagement. We remain guided by, and appreciative of, the perspectives of our stockholders as expressed through their engagement with us. Throughout fiscal 2023, we once again executed an extensive stockholder outreach program. In total, we engaged in discussions with stockholders holding approximately 61% of our outstanding shares as of June 30, 2023. John Donovan, our Lead Independent Director, remained at the forefront of our engagement efforts and participated in

21 meetings with stockholders holding approximately 31% of our outstanding shares as of June 30, 2023. In addition to our financial outlook, our stockholders conversed with us about our executive compensation, sustainability, corporate governance practices, and inclusion and diversity, as well as other topics of import to them. We will continue this valuable dialogue with our investors in the coming year, and are committed to maintaining outreach that is truly a dialogue with our stockholders.

Executive Compensation. In June, we disclosed the terms and parameters of the retention award granted to me, and our Compensation and People Committee wrote you a detailed letter discussing their rationale for making it. I encourage you to read the letter from our Compensation and People Committee accompanying the CD&A in this year's Proxy Statement for their views on my award and on our executive compensation program more broadly, particularly as it relates to our pay-for-performance philosophy and how we performed against that backdrop. I am honored by the Board's faith in me, and I intend to reward that faith by leading our company to bigger and better achievements over the years to come.

2023 Proxy Statement

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Letter from the Chair

Our Commitment to Responsible Business Practices. We recognize our responsibilities to provide safety, security and sustainability to our workforce, suppliers, communities and environment. Elsewhere in this Proxy Statement, we discuss our efforts throughout fiscal 2023 to reduce our impacts on climate change, to uplift and help protect our communities and to operate with integrity in all we do. Your Board and executive leadership team take seriously their duty to oversee these environmental, social and governance (ESG) strategies and are proud of our progress to date, which contributed to our recognition on CDP's 2022 Climate A-List,Sustainalytics Industry Top Rated and MSCI's AA rating.

You are cordially invited to attend the 2023 Annual Meeting of Stockholders of Palo Alto Networks, Inc. to be held on Tuesday, December 12, 2023 at 11:00 A.M., Pacific Time.

This year's annual meeting will be a virtual meeting conducted via a live webcast. You will be able to listen to the annual meeting, submit your questions, and vote during the live webcast of the meeting by visiting www.virtualstockholdermeeting.com/PANW2023 and entering the 16-digit control number included in our Notice of Internet Availability of Proxy Materials, on your proxy card, or in the instructions that accompanied your proxy materials. If you did not receive a 16-digit control number, please reach out to your broker for further instructions.

On behalf of our Board, we thank you for your investment in Palo Alto Networks and for your continued trust. We look forward to the annual meeting on December 12, 2023.

Thank you,

Nikesh Arora

Chair and

Chief Executive Officer

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Letter from the Lead

Independent Director

Fiscal 2023 was a year of great achievement at Palo Alto Networks. In the face of a challenging macroeconomic environment, our management team and employees delivered outstanding financial results and our company continues to lead in cybersecurity innovation.

Dear Fellow Stockholders:

It is my honor to serve on the Palo Alto Networks Board of Directors as your lead independent director. This year, I thought it important that I write you separately on behalf of the independent members of the Board.

Fiscal 2023 was an important year for the company. We enjoyed another strong year of execution by our management team and our employees, and the Board is proud of the company's achievements. We once again achieved record financial results, and continued to blaze a trail of innovation. We also continued to make excellent progress in our goal of being best in class when it comes to environmental sustainability, social responsibility, and corporate governance.

For fiscal 2023, as always, the Board's primary responsibility was to oversee the company's efforts to deliver meaningful and sustainable value to our stockholders. Critical to fulfilling that responsibility to you was retaining Nikesh Arora as our Chief Executive Officer for the long term. Our Compensation and People Committee undertook a rigorous and data-driven assessment of the issue, guided not only by input from leading experts in this area, but also by feedback from you. I personally took on the responsibility of soliciting input and guidance from our stockholders during the many meetings that I had in fiscal 2022 and fiscal 2023. We found your input to be very valuable and instructive for our deliberations.

The Board's deliberations led us to a simple conclusion that retaining Nikesh as our Chief Executive Officer is in the best interests of the company and our stockholders. For the past five years, Nikesh has typified our leadership ethos - one that values high integrity and high performance for the benefit of our stockholders. He has led the transformation of our company from a market leader in next generation firewalls into the world's cybersecurity leader, with best-of-breed products across network security, cloud security and security operations. During his tenure, our total revenue and total billings have grown from $2.3 billion and $2.9 billion, respectively, in fiscal 2018 to $6.9 billion and $9.2 billion, respectively, in fiscal 2023. Our product innovation has accelerated from 13 major product releases in fiscal 2019 to 74 in fiscal 2023. And, our market capitalization increased from $19.1 billion (as of May 31, 2018, the last trading day prior to announcing Nikesh as our Chief Executive Officer) to $76.5 billion (as of July 31, 2023, the last day of fiscal 2023). With Nikesh at the helm, Palo Alto Networks has delivered extraordinary value creation for our stockholders and has become the largest pure-play cybersecurity company in the world.

I encourage you to read the CD&A and the Letter from our Compensation and People Committee included in this year's Proxy Statement, wherein we explain in further detail the rationale for the retention award we made to Nikesh and why we believe that it was the right thing to do for our stockholders.

On behalf of our Board, I thank you for your investment in Palo Alto Networks and for your continued trust. I look forward to the annual meeting on December 12, 2023.

Thank you,

John M. Donovan

Lead Independent Director

2023 Proxy Statement

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Palo Alto Networks, Inc.

Notice of 2023 Annual Meeting of Stockholders

DATE AND TIME	VIRTUAL MEETING SITE	WHO CAN VOTE
Tuesday, December 12, 2023	www.virtualshareholdermeeting.com/	Stockholders of record as of
11:00 AM Pacific Time	PANW2023	October 16, 2023 are entitled
		to vote

Voting Items

Proposals

Board Vote Recommendation

For Further Details

1. To elect four Class III directors named in the

accompanying proxy statement to serve until our	"FOR" each director nominee Page 45
2026 annual meeting of stockholders and until their
successors are duly elected and qualified.

2. To ratify the appointment of Ernst & Young LLP as

our independent registered public accounting firm	"FOR"	Page 57
for our fiscal year ending July 31, 2024.
3. To approve, on an advisory basis, the compensation	"FOR"	Page 60
of our named executive officers.

4. To approve an amendment to the 2021 Palo Alto

Networks, Inc. Equity Incentive Plan to increase the	"FOR"	Page 108
number of plan shares reserved for issuance.

Stockholders will also act on such other business that may properly come before the Annual Meeting or any adjournments or postponements thereof.

YOUR VOTE IS IMPORTANT. Please act as soon as possible to vote your shares, even if you plan to attend the annual meeting online. On or about October 27, 2023, we expect to mail to our stockholders a Notice of Internet Availability of Proxy Materials (the "Notice") containing instructions on how to access our proxy statement and our annual report and how to vote. For instructions to vote your shares and more information, see "About the Annual Meeting" on page 123.

We appreciate your continued support of Palo Alto Networks and look forward to receiving your proxy. By Order of the Board of Directors,

Bruce Byrd

Executive Vice President, General Counsel and Corporate Secretary

October 27, 2023

HOW TO VOTE

ONLINE	BY PHONE	BY MAIL
Visit www.proxyvote.com prior to	Call the phone number located	Complete, sign, date and
the Annual Meeting, 24 hours a	on your proxy card or voting	return your proxy card or
day, seven days a week.	instruction form.	voting instruction form in the
		envelope provided.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING TO BE HELD ON DECEMBER 12, 2023: THE NOTICE OF 2023 ANNUAL STOCKHOLDERS' MEETING AND PROXY STATEMENT AND THE 2023 ANNUAL REPORT ON FORM 10-K ARE AVAILABLE AT WWW.PROXYVOTE.COM.

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Table of Contents

3 Letter from the Chair

1. Letter from the Lead Independent Director
2. Notice of 2023 Annual Meeting of Stockholders

1. About Us

10 Our Board at a Glance

1. Our Corporate Governance at a Glance
2. Stockholder Engagement at a Glance
3. Executive Compensation at a Glance

1. Corporate Responsibility at a Glance
2. Proxy Roadmap
3. Corporate Governance

18	Corporate Governance Highlights	33	Succession Planning
19	Board Responsiveness to	33	Communications with the Board
	Stockholders		of Directors
22	Leadership Structure	33	Corporate Governance Guidelines
25	Board Committees and		and Code of Business Conduct
	Responsibilities		and Ethics
30	Annual Board and Committee	33	Compensation and People
	Self-Evaluations		Committee Interlocks and Insider
31	Board's Role in Strategy Oversight		Participation
32	Board's Role in Risk Oversight
34 Corporate Responsibility at Palo Alto Networks
34	An Overview of Our Environmental,	38	Social
	Social and Governance Strategies	43	Our ESG Journey

1. ESG Oversight and Governance

1. Environmental

1. Voting Roadmap
2.   Proposal No. 1 Election of Directors

46	Director Tenure and Refreshment	54	Director Independence
46	Board Diversity	55	Director Compensation
47	Board Skills and Experience Matrix	56	Director Stock Ownership
48	Directors		Guidelines
53	Identification and Evaluation of	56	Director Attendance
	Director Nominees

57   Proposal No. 2 Ratification of Appointment of Independent Registered Public Accounting Firm

57	Fees Paid to the Independent	58	Audit Committee Policy on Pre-
	Registered Public Accounting Firm		Approval of Audit and Permissible
57	Auditor Independence		Non-Audit Services of Independent
			Registered Public Accounting Firm
		59	Report of the Audit Committee

1.   Proposal No. 3 Advisory Vote on the Compensation of our Named Executive Officers
2. Executive Compensation

61	Letter from our Compensation	93	Executive Compensation Tables
	and People Committee	106	Executive Officers
64	Compensation Discussion
	and Analysis

92 Report of the Compensation and People Committee

108	Proposal No. 4 Amendment to Our 2021 Equity Incentive Plan
	108 Why Should Stockholders Vote to	111 Summary of the 2021 Plan
	Approve the Amendment to the
	2021 Plan?

1. Security Ownership of Certain Beneficial Owners and Management

1. Related Person Transactions
2. About the Annual Meeting
   129 Other Matters
   130 Appendix A
   132 Appendix B

HIGHLIGHTS

10 Our Board at a Glance

12 Our Corporate Governance at a Glance

34 Corporate Responsibility at Palo Alto Networks

47 Board Skills and Experience Matrix

61 Letter from our Compensation and People Committee

64 Compensation Discussion and Analysis

108 Amendment to Our 2021 Equity Incentive Plan

This document includes forward- looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical or current facts, including statements regarding our social, environmental and sustainability plans and goals, and executive compensation plans, made in this document are forward-looking. We use words such as anticipates, plan, believes, expects, future, intends, and similar expressions to identify forward- looking statements. Forward-looking statements reflect management's current expectations and are inherently uncertain. Actual results could differ materially for a variety of reasons. Risks and uncertainties that could cause our actual results to differ significantly from management's expectations are described in our 2023 Annual Report on Form 10-K. Unless otherwise provided herein, all statements in this proxy statement are as of October 27, 2023.

References to our website in this proxy statement are not intended to function as a hyperlink and the information contained on our website is not intended to be part of this proxy statement.

In this proxy statement, the terms "the Company", "we," and "our" refer to Palo Alto Network, Inc. and the term "Board" refers to the Board of Directors of Palo Alto Networks, Inc.

To the extent that this proxy statement has been or will be specifically incorporated by reference into any other filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, the Letters from the Chair and the Lead Independent Director and the sections of this proxy statement titled "Report of the Audit Committee" and "Report of the Compensation and People Committee" shall not be deemed to be so incorporated, unless specifically stated otherwise in such filing.

2023 Proxy Statement

7

About Us

Our Company

Palo Alto Networks is a global cybersecurity provider with a vision of a world where each day is safer and more secure than the one before. We were incorporated in Delaware in 2005 and are headquartered in Santa Clara, California. Our principal executive offices are located at 3000 Tannery Way, Santa Clara, CA 95054.

We empower enterprises, organizations, service providers, and government entities to protect themselves against today's most sophisticated cyber threats. Our cybersecurity platforms and services help secure enterprise users, networks, clouds, and endpoints by delivering comprehensive cybersecurity backed by industry-leading artificial intelligence and automation. We are a leading provider of zero trust solutions, starting with next-generation zero trust network access to secure today's remote hybrid workforces and extending to securing all users, applications and infrastructure with zero trust principles. Our security solutions are designed to

Our Corporate Values

Our corporate decisions are guided by our corporate values, which were co- created by our employees. Foremost among these is integrity, which is the foundation of everything we do and every decision we make. We believe that collaboration enhances our ability to disrupt entrenched beliefs, which we think ultimately leads to innovation. Our ability to execute on our innovations and deliver products and services that address the cybersecurity needs of our customers is critical to our long-term success. Finally, we are intentional about including diverse points of view, perspectives, experiences, backgrounds and ideas in our decision-making process. True inclusion and diversity exists when we have representation of all ethnicities, orientations and identities, and cultures in our workforce. We believe that our core values make us a better company.

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reduce customers' total cost of ownership by improving operational efficiency and eliminating the need for siloed point products. Our Company focuses on delivering value in four fundamental areas: Network Security, Cloud Security, Security Operations, and Threat Intelligence and Security Consulting.

Palo Alto Networks earned multiple workplace recognitions from Comparably including #2 "Best Company in the Bay Area" and "Best Company Leadership" based on employee feedback.

March & May 2023 (Comparably)

For the second consecutive year, Palo Alto Networks received a score of 100 on the Disability Equality Index and was recognized as a Best Place to Work for Disability.

July 2023 (Disability:IN)

Palo Alto Networks earned a spot among Glassdoor's 100 Best Places to Work, based on employee feedback.

January 2023 (Glassdoor)

Newsweek once again recognized Palo Alto Networks as a "Most Loved Workplace" based on employee feedback and certification by the Best Practice Institute.

Oct. 2023 (Newsweek)

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Our 2023

Financial

and Business

Highlights

We delivered another year of outstanding results for our stockholders in fiscal 2023, with a strong year of financial performance and execution. Highlights include:

• Total revenue increased to $6.9 billion, or by approximately 25% compared to fiscal 2022.
• Total billings increased to $9.2 billion, or by approximately 23% compared to fiscal 2022.1
• Next-GenSecurity ARR increased to $2.95 billion, or by approximately 56% compared to fiscal 2022.2
• Continued to return capital to our stockholders through our stock repurchase program, totaling $3.9 billion over the last five years.
• Accelerated our product innovation efforts, with 74 major product releases.3

About Us

Building a Stronger

Palo Alto Networks

TOTAL REVENUE	TOTAL BILLINGS
($ in millions)	($ in millions)
			$6,893	$9,194
						$7,472
			$5,502
	$4,256						$5,452

	FY21	FY22	FY23			FY21	FY22	FY23
						PRODUCT INNOVATION
						Major Product Releases
NEXT-GEN												74
SECURITY ARR
														18
($ in millions)
												49					21
					$2,955
														18
									29
			$1,893			9			13
																			35
	$1,180										6
															18
										14
	FY21	FY22	FY23			FY21	FY22	FY23
			Security Operations

Cloud Security

Network Security

RETURN OF CAPITAL

Fiscal 2019-2023

$3.9 Billion

1. Total billings is a key financial metric calculated as total revenue plus change in total deferred revenue, net of total acquired deferred revenue. Appendix A includes a calculation of total billings.
2. Next-GenSecurity ARR is annualized allocated revenue of all active contracts as of the final day of the reporting period for Prisma and Cortex offerings inclusive of the VM-Series and related services, and certain cloud-delivered security services.
3. Major product release is defined as full or dot release with significant new capability, new or add-on modules, or subscription services, new software or hardware appliance models, significant PAN-OS, acquired capabilities and significant new platform support.

2023 Proxy Statement

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Our Board at a Glance

Our Board comprises a diverse group of highly qualified leaders in their respective fields who bring unique perspectives. All directors have either held senior leadership positions at large companies or otherwise gained significant and wide-ranging management experience in their respective fields (including strategic, financial, public company financial reporting, compliance, risk management, and leadership development). Many of our directors also have public company experience (serving as chief executive officer, chief operating officer, or chief financial officer, or on boards of directors and board committees), and as a result have a deep understanding of corporate governance practices, including risk and management oversight.

The tenure, age and certain other information as of July 31, 2023, for the members of the Board are set forth below.

BOARD SNAPSHOT TENURE

Average

8.3 years

0-5 years					5
6-10 years					1
>10 years				4

AGE

Average

57.5 years

41-50 years					1
51-60 years					5
>60 years				4

GENDER DIVERSITY

John M. Donovan

LEAD INDEPENDENT DIRECTOR

Former Chief Executive Officer, AT&T

Communications, AT&T Inc.

Director Since: 2012

Other Current Public Company Boards:

Lockheed Martin Corporation

CDC (Chair), ENC (Co-Chair), SC (Chair), CC

Right Honorable Sir John Key

INDEPENDENT
Former Prime Minister of New Zealand
Director Since: 2019
Other Current Public Company Boards: ANZ
Bank New Zealand Ltd, Australia & New Zealand
Banking Group Ltd
CC (Chair), AC, SC	I
	S
Mary Pat McCarthy	S
A
INDEPENDENT
L
Former Vice Chair, KPMG LLP
C
Director Since: 2016
Other Current Public Company Boards:
Micron Technology, Inc.
AC (Chair), CDC, SC

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Women				4
Men				6

ETHNIC DIVERSITY

White					7
South Asian					2
Black				1

Nir Zuk

Founder and Chief Technology Officer,

Palo Alto Networks	NO
Director Since: 2005
Other Current Public Company
Boards: None

Lorraine Twohill

INDEPENDENT

Chief Marketing Officer, Google

Director Since: 2019

Other Current Public Company Boards: None

ENC (Co-Chair), SC

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