Palo Alto Networks (PANW) 5 Sep 192019 Q4 Earnings call transcript

Please welcome, Vice President of Investor Relations, David Niederman.

Hello. Thanks for coming, we really appreciate it. Good afternoon, I am David Niederman Vice President of Investor Relations at Palo Alto Networks. Thanks for joining us today to discuss our Fiscal Fourth Quarter and Full Year 2019 Results. broadcast our the our Investor investors.paloaltonetworks.com. being be and website is on accessed Relations meeting live web over can at This section of

this ended July announcing XXXX. press fiscal Earlier quarter XX, issued for fourth year results our release full and we afternoon, our a

this XXXX applicable on provided also earlier reconciliations be materials the to current report full-year as X-K these of and filed operating SEC fourth quarter certain Investors exhibits Copies We results fiscal metrics Form can with on script found website. and section a of financial afternoon. along with a our of also the

to points remind meeting to the been QX'XX measures fiscal are provided year Please and non-GAAP the and materials, like certain statements, financial Safe use basis, also and expressed on including moment Harbor financial kindly will regarding XXXX. language take you I'd certain modeling charges. be long-term that call making as to forward-looking exclude for this that a management strategy we guidance full note with near review on our adjusted and please a statements have as well

Officer; our that located Zuk, the at Financial investors.paloaltonetworks.com. measures our the Officer; Chief Klarich, these For to be and Chairman financial Arora, Officer; Chief will with measures Executive reconciliations Bonanno, financial our us Nikesh of our in section On can Officer. and Chief investor end Lee stage Chief be Technology Kathy our today Nir at information historical the Product of non-GAAP found of GAAP the supplemental and periods, provided we financial presentation website

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billings mark, now XX% grew Networks. quarter which Alto we history. turn let's a capped-off was great Cortex quarter, approximately In we refer to performance So next-gen another year-over-year in strong. fiscal revenue collectively fourth year the to our as first billion-dollar or especially for as crossed the the Prisma million. Quarterly Company's to them security XXXX $XXX and Palo in And

annual and a million next-gen Our this million in run-rate approximately were accelerated billings security represents to the growth XXX% to approximately $XXX approximately our -- quarter, $XXX year-over-year.

convertible debt For adjust we the Clara line associated of approximately our was $X.X full delivered flow free year billion the in $XXX Santa the the and If strong our headquarters for XXXX a with was and also cash charges margin cash results free we million. of fiscal flow top retirement XX.X%. year, cash at for full-year

Twistlock our Prisma the to acquisitions into for offering. them and the the So highlights integrating of and QX, actively we turn quarter. In are completed some let's product we of cloud now PureSec,

locations clean Prisma several in providing other globe to access around providing network pipe and along We release. including also released on-boarding unique that the service with providers, for over XXX capabilities significant updates

included Traps X.X, released support Linux, expanded strengthening and for we Mac XDR further which offerings. OS addition, our and In endpoint

company. as the Zingbox, earlier shifting our this government we a probably cloud, IoT usage wildfire to received FedRAMP And acquire cloud. announced afternoon, intent we security huge saw And WildFire you towards towards certification just for an milestone enterprise

easier will Nikesh technologies this firewall of to into making a is next our enterprise our consolidate it environment. their to discuss customers generation later, new platform, another acquisition ongoing yet bit for strategy example protect As complex

to the We U.S. Zscaler and Fortune data and retailer Symantec releases, retail than during notable secure XXXX center to quarter. addition had outlets. of a at wins several displaced product In their XX we more network

in and and Cortex Symantec hundreds for of our We Fortinet in displaced a It all securing most CrowdStrike digital standard along Cisco major at displaced We with and Pacific. of Asia and beat employees. XX beat project. platform their for one to Zscaler provider global beat transformation and with Fortinet was displaced European become with great and at national the win They're of government the healthcare company a in patients their populist we policyholders the hospitals, platforms us quarter. Prisma security their a than million regions insurance more the of

great In summary, lot there quarter. was in a of news the

high and nearly X,XXX XX,XXX rates to In customers have have against our thousands we QX, to We're XXXX, added great we'll forward win privileged the now and customers in won presentation. to now to We move new on of add year continue are rest every quarter. looking of competition nearly fiscal customers. and new another the

CEO, welcome, our Arora. Nikesh Please

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can is can the you give we the you the you If and policy now, you all alerts alerts against what do do them. you and in can we'll think give a bunch say what to industry you figure with of we write tools, it, spin-up and out

lot X a time lot generated alerts. a many going will manually being So your of of take talk spent about in you And anywhere week, can average and we then customer XX of in have and alerts to issues XXX,XXX from and a of amounts get Lee it's effort our investigating can this. customers which alerts tremendous through On more days. a Nir

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bots, trying Now infrastructure, attacks about it. how entire get to your we're are addressing based really out ML AI figure enterprise based people to talking and

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which security, a launched months few way, customers will our ago. they've DNS believe that just deployed we firewall, the We deploy

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we've believe examined platform there cloud Over We very, be a the multi-cloud, to carefully. security last XX space months, available needs comprehensive the very multi-technology for cloud security.

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displaced we first where We million as for deal have over Prisma highlighted we've $XX Zscaler. our access

securing as our architecture feel the access ability of for keep one building cloud. the So future in to confident very Prisma

thing XXX,XXX, very really large SOCs will the a comfortable right is and with the of the the had weren't Lee you them take the you the against bunch future, run data we alerts be alerts SOC I've you got that XXX comfortable alerts. to to repository, good needs talk more a answer. get the way in not These That's at. On the analyst at We're a not it all Nir hard looked for industry We going. another spin-up about it. put data, industry. securing And look analytics solution and that take where

and Demisto, going be the well future about that more more acquired looked is for market, SOCs We and about the Nir automation Demisto to us, at talk able we we in really done of will believe we're what do Lee has towards space. and to

where heart we're We our the also and EDR acquisitions to took looked said, was severance space evolve of IVR win. to, and how our what are and [indiscernible] industry acquisition endpoint going going to like is the

and fact full We already we're first launched the delighted customers quarter XDR by four our been the have we've ago, team. of acquired XDR had XDR XXX months that with

this Now the to ability run, go-to-market product in a not wasn't our capability. done also our focus, focus just without but

over from Prisma months, business hiring have really and that people. more resources Cortex number But Kathy accelerate set and XX new of XX% us that from been we is X,XXX allowed last what into on to and Cortex confident the rate numbers years. Prisma part our or XXX numbers the approximately focus by our taken Over would we we'll redeploying of teams about and and we expect we odd our acquisitions new has have XXX% which feel is and business, growth those people talk core further to from effectively next our We people what where drive as very can did highlighted. three to a go

different very, and feel today? it, approximately our And next our have what services portfolio million, of around platforms total our in security slot. we generation We've the firewalls FY'XX. confident billings together are grow that in it of securing from our come cleared like our market, three in actually delivering very to and both and cloud cloud up firewall, the one billings security security our we the product around $XXX XX% was future does we in look to So process one and one been believe around deploying the where the we able capabilities our

in opportunity our with Kathy able fascinating in customers believe our the has our simplify QX enterprise single retail vendor We very of as that and a alliance customers to And be one it's vendors. and large vendors, acquired enterprise to have is the to we security solution. highlighted of reduce gone number

data forms their of the all single needs. and center, firewall instances across access A security network against cloud firewalls, Prisma against firewalls and vendor our virtual

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analytics solution that space believe least, future, customers of of taking good and for able it to believe secure Taking being the and ahead the our multi-platform to to comprehensive a Last tremendous We allow we amounts and is data. to be not that all data to opportunity multi-cloud, have stay automation as applying cloud. able opposed but in the to provide deliver integrated to we future. the in our opportunity security

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enterprise missing that start reason Now to are which once and are, applications slide cloud, architectures network moving for a changing. oops And here. -- the they access the architectures are we

Sorry.

so guaranteed been is centers and which have were they applications. data Okay, GlobalProtect access applications, that and reason way enterprise way enterprise access through that those great was were running like example the MPLS, links, in remote accessing that and performance users solutions traditionally IPVPN links guaranteed yeah, through the to enterprise bandwidth for were for offering MPLS

whether of cloud it Once smaller it's or all to users into mobile, applications go are course, then center start through make moving to offices to cloud data once traffic the sense moving offices into run doesn't public SaaS become the the and anymore and branch the Internet. and out

want the to or is whether is, user access wherever the user the office You whether direct from mobile. Internet branch have it's in

try we're more industry side security have doing And it to of has more the traffic doing a topic, solutions CASB tradition bunch then VI and of to have it, industry, course do go -- the the is and the traffic our try the CASB favorite VPNs. more cloud way with then it Of of then a and some -- we side mTLS we delivered by proxy, the goes course And offering to to proxy. is SaaS companies. cybersecurity way or

feel and proxies the ago, kill playing And a because to first I'm had here, [indiscernible] whack-a-mole game, side maybe it is bit seem a inspection. like I because because I with I XX about angry note of little have then if a maybe am, I years generation

for Secure time. If higher You'll like here companies them? cap market cover responsible a them checkpoint probably at anyone remember, having than you the Computing

course I'm break they networking, network and always where so are of and issues they break like optimization, on. the they and Raptor had break are sure slow, not they and companies others, today routing with is network proxy applications, they proxies,

proxies, to when the next in again and generation sense. of kill hard our time. products we Blue started world, Websense's first had we years And ago Coat make the XXXX, them to didn't kill XX the So of then any which the here, the selling

Proxies they have high them, never sense, can't break everything you are made run break to networking. they applications, latency, they slow,

time what, and to with cloud, from security And it and we're not going we Broadcom is Coat have know all right deliver Websense is. now measureful third how other our is the I'm which Guess proxy. Blue mole And have, to sure popping, so it's going on, today to do it? do we part we're of we a right,

would security security something because to easy, do provide very it's network physical the to you and security, why level. pocket difficult it's the network it or Now, and security it's whether company, not it into can at very a based become and proxy application virtual is with go build networking the that with a infrastructure, difficult the

network who are So we proxies trying to issue. for cares, a solve put break the use let's so the we easy out, anyways, and it proxy, way to applications, are the they vendors taking customers right, break pay so are to going

ago, to going about. months to Prisma were we're proxies better So boring. not it's is a six that cloud. the but I what way it's I'm not the just -- and say wrong that If to better it's proxy. the really first that we And I what much is last solution sure quarters, you've here are I access think solution, the have think, the proxy, seen in -- a are the after mess would that two there proxy is proxy and in suggesting of the -- industry kill again think with I'm associated what order course I've this and challenges is to killed access by fix seen But the move this I

so this driven choice offices be it takes to very, provides continue mess SaaS firewall-based been going called to applications cloud cloud, couple and so successful solution, because our single again is is applications in to see access, clear. a The branch the cloud quarters to in firewall is by going next versus is our mess Prisma base to -- the when public reason and access CASB, mobile has firewall access this applications a takes do. this of customers to And it delivered the the the comes today very successful last platform is users, that on-premise and whatever platform through with

our if they the other do not the way position today I probably I it many capture vendors position, three where vendors really we are our it. go into like a the the are I there. to is why today, figure busy like This in hardware can't market. just And this position market hardware. our else trying out really there and like huge we where to I four to today cloud firewall and certainly There are that access I don't sell out in anyone are vendors in sell look see taking to future. at against firewall -- the are

continue. I'll Sorry,

So now that we've covered.

[Video Presentation]

proxy. throw Can proxy, out huge of you they the a through they imagine trying to X-ray data access that to and have tried, deployment

that in there okay. in security. the cloud personally to has done to then look think needed components And very anyone back we cloud that see that's the going the and TAM, today don't even if that do much automation competition I you with analytics, larger, we order I drive a software said, becomes opportunity. represents So at and in large by security automation us, opportunity that to that compete and against XXXX TAM, just security a very over is like And people, large

that to cover we let's now two pillars, So the the secure move first future.

time. both and we both have to are we be So both. to for in leaders And to are continuing have doing be and cloud stay both that, a cash and do let here at market me enterprise both with long be good and security we going to the us security

it security comes At to in cloud operations operation for and center today the some are ago system, security security these the and to two operation one fix persons couple of system are this the they to prepared the all the enterprise big issues security that needs not and security because And run operation And point, a we've go for to make just future. security place. security that in aren't that decided basically both converge years that prepare future. the

in by with operation -- are talk SIEM, to called rules devices generate security them they and applications a log wherever alerts way can guess do call technology this So as that Security and working to servers or and the and from what get centers of Incident that, data management, bunch what's a they do, network operation much Most static have and endpoints they Event and can Management, looking as and incident whatever then nothing just but basically around logs from about based the let's manual event based we'll on and at and they not data. labor center. security collect the

public something found the Now or bad was of firewall course, and in includes or found, found cloud, the the data bad the on. or in, if already so was because something that's IPS whatever alerts, coming bad

displays On alerts. call the SIEM top even has we that them that's rules generate collects alerts, user, the of more rules, the with SIEM correlation and the

breach and to hope to better, now, with Right any alerts the theme that only not. broken you going needed, do to that it's the Some -- broken. to to alert, of to had filter switch at fix is then another SIEM the later. we're some to that, mechanism broken that, nine out filter the filtering out And going trying ask and out been And it customer, be have SIEM, will of I broken that about is going investigation. the industry them told SIEM is they SIEM target they to looked why leads is reactive they usually months what tell alerts, all solution that the

right. much And in you so have out what or data, and industry, network the much companies data the something be be provide done. advanced machines collect and using And the on, processing done more to to I meaningful more of that is figured from has from has that endpoints more to meaningful

the So doesn't SIEM work.

ask new put industry going we're endpoint. a we on agent EDR, the why called to yet So don't another create customers to

going static accruals going because it. to to find on process endpoint, even we're from some back there going already, whatever maybe we'll We're aren't respond going alerts generate with enough the to We're more things learning collect people machine alerts a lot the we're put the to data endpoint. data of to sometimes that maybe and

enough. not Now that's

to with We do the thing same network. have the

a same that traffic thing less other machine stenting and whatever with and So cloud. from whole separate that's more lake maybe for usually happens thing NTA network into IoT called same the they there respond the for data data just then collect and or happens doing using that the network is in network analysis industry and back learning is deeper on the process public generate rules in the

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make make respond sense on and back, data to Okay. they’re process only the doesn't We like think the endpoint this sense endpoint. endpoint yourself doesn't the that specifically like just you collecting would from why the limit to

and We that's think okay. that there what has to better something Cortex is much about, be than

company survey late which that maybe Now this that a is we Demisto year. before acquired

don't that $XXX,XXX they days to that and few are handle the acquired before that Cortex and weeks. what we alerts each heard sense capacity doesn't them we some per seconds at need with have four about. to has even that gives to the fix that they touch so real leads they a Usually for they do figure It investigate you've and XX,XXX alerts, to out may make least of them, is to handle that alerts have and that average the investigating just Before need to XDR an alert. enterprise it be

my do we're And go to tell that, --. product how you I'll to guy,

and data, be cetera. really as error-prone So takes about good ultimately, analytics the talking we too because out securing future, think can when we we're time proactive, proactive much was But get manual work happening. get do outcome, that things happen it how away [indiscernible] bad from the a happened, can, it, has to prevent something to bad things bad obviously the et how it about and it leveraging if actually against from let me to trying as figure like to we trying we're collecting automation much reactive

that a on that being and starts spent with is all alerts, framework, selecting money using on as data. So a massive collecting good logs of is good but not There data. amount it

collect and things in analytics AI that. to data like have good You learning drive machine good to order

good best Now, of data we course to get with started know. we the the sources

we crops the our control endpoint, Our so those next-gen cloud sources. know, services, in because firewall we can as

drive The the kind we get of data, detail order rich in analytics. can to

are we So to But third-party that started. extend out starting is to as we sources where that well. now

in enterprise, the far will and other be -- network start for going to of point the like that, least devices. that data in et still that. of starting We're again and a and we correlating is other lots taking of things, different on move to help checkpoint the so by it there everyone to As state things is better cetera. a we at security probably a bit mess, there with start while Because try Cisco can

to are drive now -party our third good data to augment data in So be we able starting pull to analytics. to sources

attack XDR should good So like? that for analytics, what be look otherwise detecting that Well, detected, good of can't first is capable and analytics sure. Cortex foremost, be does

addition enterprises to is in analytics to deal very to have reduce able noise alerts that with. powerful amount though, of and In being the

easy to up group reduce of seen to and have seen it able showing them to alerts takes to together powerful analyst We've how them much to through to certain long more being incident in incidents the just time as investigation simply ability view incidents data full the into for an ultimately to alerts. to is to of amount then environments by automation. to lots XXx We then much, of by and and significantly the reduction investigate be opposed provide go able also it pre-stitching the get the investigate and conclusion

improvement And aspiration this, for even these the are. they way otherwise to better the driving on is by to massive keep improvement going which Our we're outcomes. get this magnitude a to focusing from SOC, here is of orders

two the lot they Now, take of good noise be can counts, focus analytics, and good of ultimately have Automation the data good system with able where to on. what need is just automation. SOC a to lead the really to really to out we

incidents. the simply by of that improvement, environments And respond the meantime to long response it enterprise alert level That risk, the an work. the the to XX% is to north reduction you investigation humans again don't how to can do see benefit well massive the have takes SOCs. to Improving to automating of some respond and

that build the we in can we we based And going view automation on we forward we see have this predictive can done other everything nature. growing ecosystem, effect, make areas. But even a in as across network that many have this

that with more industry The this tools this. about how a So to actually and get as customer area simply customers, want they for providing is opinionated what kind in industry, achieve is cybersecurity do we will able security what them. achieve to order that to outcomes to is key should you be these do outcomes. the to right needs tell of opposed the Automation

happening of footprint that ultimately important alerts even so other can to and in first deep from really have attack order on analytics the instead is Every This Cortex proactive. why re-active or prevented it place. function. have the it together, but only bring and traps where on we to again things attacks to to back rich means a this proactive in is drive actually get trying that endpoint Not analyzed to are provide Lastly, prevent is fewer end. upfront to like be does response the data that, fewer

when allows we point us the -- does investigation, the that do to is then take customer action. an actually to finish response footprint enforcement finish this can automate to back Additionally, we when

front on the and the prevent well. back-end data then provide prevent we rich end, So ultimately as on

automate sequence. So that entire we can

about, class. together, they each and the foundation the deals one of best platform, components to lot a is So of talked with, the itself Nir But can challenges bring importantly, integrated these are growing. of we together in a in that currently this that form solve SOCs

adoption customers meant So as would of hear Cortex them. have they their and to of what let's from talk our one about

[Video Presentation]

combination of Always then this can see a this automation obvious, substantial as endpoint the outsourcing cools well. The adds and and, and the maybe And, as that all we analytics town. it of opportunity manual you to analytics, the course, a state. well ability of large and is protection, most up case, into pull secure product growing automation in reduce

to like up with -- that Nikesh about talk execution. to Nikesh? for And that, back invite

you, thank Lee Well, and Nir.

a I publicly fact Nir, we So, making plan every miss is I a firewalls as applying of SD-WAN that potentially get and across we lot to deploying factor. Lee the didn't mentioned, we product lot and highlighted time sure form to in hope subscriptions of right, where have spend strategy go. Lee you committed our and our

solution. hears of just make And market. into capability he which right, data sure product Framework me, safe product extension use, to the Application that I I'm put an just trying Once so to Cortex, get is part to out can the third-party product him past. the you is the I make But in sure have to ingesting our can execution our got sure make from of hold talked too. we our of also vision you've about you

to And, enterprise as is small And there it's commensurate if a be that with I've just analyzed large at enterprise companies. few companies, and look enterprise your capacity. interesting, needs very very distribution it's product them, engine is there many very interesting, companies created you

double revenue, can of a able There it. capacity it able amount do is are sure the to only get and double good going or product have and they acquire to in be one salesperson innovating to product salespeople set make started, the with to very your market, number either of sure that. into keep adding and double salespeople sell to the you able have way get with sell portfolio you a to ingest be there to to make of is to is and a salespeople then you more product that a one and products it's enough or way the Companies sell that in state

is little both. of to a intent bit do Our

to been wanted highlight to in have also the we product working we've is, our and I capability what And addition capability, execution go-to-market. on sure making

This saying, how in opportunity in categories. billion out, we billion needs ended to last just approximately cloud, network, in those that my session Nir and $XX Lee endpoint be I of and $XX can automation, a there with SOCs is $X breaks we billion deployed about billion across highlighted, As $XX-odd think $XX market. the address the and market in all billion which protection, and is

market. the much to for industry. that to a you get the it's We, be industry large get working different a be their contrary, redact to cybersecurity, to believe to automating require view enterprises give too that but precious on you It's on a of that are long-term, security you lot services able to adversaries for right architectural going manage while data. slightly automation and right, see time, is than you market large the and still pieces is it's the going need very will believe important the going ability on the a your in if The way services to not the people and outcomes

XX,XXX have people have which we as brand trust. see, you So, an amazing customers and we

early very XXX time. first to we've period been to deploy year, it a the one launched short subscriptions we over in customers able this highlight, of of Just to

it they're the add So get the subscription a to deployed firewall deploy capability and moment how market. our you sales our able know in when teams to

As IoT available and a complex me, Lee solve large start-up, talked about customers, our asked you company, IoT more after in larger wouldn't to used would go enterprise every firewall because we to space capability, why to that are. of that acquire go complex some I are there that's deals of one our you understand a one the case used make want IoT a companies cases. probably complex as the where why

for But customer. the every enterprise IoT is a need

to that, the how store TAM firewall. in able of our customer thousands which know is attack to We to thousands get aspiration that And it. two- a we expanding Our timeframe, revenue be our to how we salespeople customers, a know tens of should sell our customers every keep allows of us subscription with leveragable in to deployed, and base. way three-year to if both of not, for

cybersecurity a countries If in across to at play and out partners, into X,XXX the our X,XXX you makes the large capabilities, want distribution that We us pure which in capability. have we we sales turn look XXX field. the largest team current out field, have people operate we

build done believe and at Palo cybersecurity. the management we Alto in that team had I Palo in built best We which about Networks. firewall-centric, the your stuff the have company, we some many Networks cloud have in wrote some and Alto a SOCs. is also of execution turnover phenomenal the notes in know stuff

go transition are and make we go sell can we firewalls. the our cloud, very skill important AIML, to team sell we our able we a for over that through as business managing we to is It to multi-platform sure set the transition go market. sell required represents automation, of made management that what sell this building can be our cybersecurity multiple sell team have capabilities which go actually upgrading multi-product, time can sure go And platforms are we've done our is that we can in we

people quintupled fourth Google. I We was revenue joined there. of in left when Google they days. employees. in far today Google There and I in its generation that from Google people took X,XXX revenue is team to the the from there when XXX were five XXX,XXX I management Europe. years we were and now quintupling surpassed XXX early of

the have doing And evolution, execution. go bring of to comfortable the the So, teams desire are our the you management we're very that management best are transitions sure as on build continuation front to make locks your through and we them. you you

a tells force which in managed field you're turnover our all they're sales see that transitions, it this they're cybersecurity seeing, and can world. in very management best with sales build going multi-capability $X did you you billion player were and these building be billing these our of the we ambition desire most while first we quarter this that all team. assured, QX, all on-board the towards the through to Rest strong And of would cybersecurity transitions, they're purpose

X,XXX we've professionals. In year, the cybersecurity hired last over

And purely us we cross technology, week have able of train hire we been cloud companies to sales We as cloud and in now techniques. teams in to from hiring to our a generation us our cloud. team hardware and past. had opposed in allowed expanded to allows limit, X,XXX people lot a businesses, the automation sell which core This to be next built train enterprise which XX our in

into the interesting is build of ingest it important in or This is, and in is them innovate terms There is an this speedboats. take technology, this larger this put enterprise business. security this we what we we is, slide. do Why and to we how are we anticipate going build

speedboat We speedboat have cloud, automation. for a have for we a

team We able various of field. also our is you training what in our started sell sales this core sales gives And force the products. proportion out sense to field of our a

is year, Access. taken able XX% integrated a integrate is Prisma XX%, and be which part of of the teams sell will Prisma to perspective. contractual it Cloud sales sales force. both Prisma and in gives field our XX% Cloud huge from on end Twistlock have the This PureSec, out now Prisma leverage, from to we've closing us usage And and Access by we our amplification and the will of platform, allowing seamlessly a of the in So

have customer Prisma our will and base. every So address is and that believe Cloud to we capability going XX% to container of leverage us customer serverless allow automagically

us in plan sell to we SOC. both speedboat need automation allowing to the our entire teams to our Our be to -- well and get to to the customer base, is our as through core player, as become distribution to of leverage our able sales and of XX% XX% biggest cloud, force

space in that, No people this other selling. continue do over out while we there we make our just our field sure has X,XXX in to want the customers. delight player to Not we

on been able leadership our out position are that, to the and market. the have Not success maintain of So going to not rest we happiness and laurels. customer only customer we

industry we're in are their the first in is We Alto a incident of have products breach until assurance their introducing to an team, be just any we proportion is customers irrespective of resolved, industry, or other of breach situation unfortunately service, security to our whereby, customer what if announced field available going any our Palo of there products.

at our happiness be ability to customer want execute. the So, and to we customer forefront to success in of continue

channel. So been now the -- yes, with has I conversation about that, there other

have there XX% I this every business Board, the Channel of comes think to think we consternation. we've has I just on, our was been which causing had But feedback tweaking team, that meeting with channel comfort just analyst the for said I you ball one channel. Advisory that our with still from give is anything

training two had and in you QX that channel, quarters can sourced more channel never programs our And create channel QX, our at to doing and because for revamped greater we than business has the capability, we've we're incentive last see as been Palo the Networks. Alto in

cybersecurity excited is of in So, around acquisitions results. the to that, platforms. fact is various us just the taking us capability the with this our we're and to We about signal any the and it's true believe not amplify allowing shown building journey best actually they're They're the really business newer and our in the noise. are together channel noise direction

is This right. All Okay. all [indiscernible].

it's what you we hard to do you Sorry, he us a us to here. here for. give taken get has very a to for context, long take you're But until

a know, long that, we've of history So with as had success. you

market at popular increased We have industry. our that share despite the business security grow belief network we're not rate able be to security going twice to the of

customers Alto of talked company We we're vis-a-vis financial we transition your at license. team four Networks of what notes the Alto the at two is lot through talked to transition transition. The do ARR looking going tested our many the the of We Palo major is through to do, or going financial flows time and -- to any cash many have and months, versus to duration many or these spent need we last three depression of about market Palo the I term a over customers. through perpetual of the many going -- a go license and not of model our

Our customers we sales them, our products to how for sell way sell the understand like our to people products themselves.

been far. going We be them the selling so to we've selling way are firewalls

term We license license model. not to we're with the to go model, going perpetual to are any stick going

be sold. star sold with our and going perform of some And like firewall sale has are replaced to firewalls factors

So XX% very rate sell [indiscernible] billings rate be will able huge building, based a feel as the XX% next analysis, well maintain to over that next on growth will years, revenue capability a security, our growth we all be to comfortable years. we as the two over we the next-generation three the

revenue revenue weeks rate of our I most of roughly above XX% can forward. models privilege believe there guidance that the had the and of one and in on three we looking the your I billings last your of I out commitment behind billings. both Street, the XX% read average every over we But can one going grow models. at notes, say, the is stand growth the every at we that and almost of safely this

I'm I'd we highlight seeing, An revenues [indiscernible]. you the to important are product shifts for like part, pay the sure one guys of to attention

firewalls software a form Prisma shift We of competitors seeing where with our boxes factors we're replacing access. are

our and would would done our our look and would revenues the like access all in an them or firewall sale if we've like how is our and we've VM's, what we taken sales our what sales said, firewall Prisma consider how upfront look it category. billings as So

that will billings able proportion grow product. as be believe think sure we Which through. over three recognition the anticipate vis-a-vis will firewall comfortable sold, will to grow We So years. X.X about we very years. the a times the at then which to still revenue Prisma that is a sales future VMs, because you a feel to by I shift, the will this mix our combination point Access form next next we a the growth we large firewalls come two is believe and But are rate There of category the XX% over we category fact the be of firewalls. industry firewall factor. be in software will still XX%

and billings. next the Cortex. Talking were $XXX million billings part, really excited excited we're Prisma about our able achieve about that about, in security really to in We generation

We're call approximately XX next resulting $X ' 'XX. billion revenue to will we So, revenue for FY billion by in FY generation over get of $X.XX million by $XXX believe to we FY next-generation for what guiding we security 'XX, billings million and to security. $XXX of

acceleration driving 'XX We spending to part Prisma our XXX takes of to at but been getting committing be some to and leverage to 'XX we to believe manage fast our revenues reallocate operating we Cortex able should keep revenue million But between thereafter, points $XXX from keep that long-term we're basis the FY -- margin able $XXX million year to This business the that believe and revenue next that able need the core growth is business. the to in we XX%. being it invest growth to. FY be by drive and we for we've believe will pace 'XX our by margin operating 'XX

years, to free cortex. generate XX%. these shift I cash and comfortable, investments, cash Prisma guiding will able as lot services well a discussing as the know We cash and flow over despite towards about margin us. a billion free more be $X software-based to we access despite flow long-term like of of We you've been flow VMs services feel safely three believe next the

buy about big tell to from talk the a I it thought we've on ago a is of this, Google before intend spend guy stuff. cash. about comes done going a I use month you So was to important M&A, fear I of think be lot you've and a how would lot to this to as how there also we when seen, came that money we What

my Let M&A me highlight of tenants philosophy. the key

foremost, dangerous. and prefer First I avoiding products. overlapping Overlapping are products

acquire interesting company, that of more in leverage because requires customers the for buying scale overlapping other of products categories. product We categories, us buying them, just of to I'm to create basis, [indiscernible] to sets is need in me, in much innovation our we firewall believe and most two it's for have and in competitors hence displace acquire I'm have not the categories. those no don't as endpoint interested most interested We company, in not we customers category opposed scale. create and

We not base, to technology not a areas and can and like is where there prefer there our lot where where that technology deployed areas We will valuations, through people, like of we enough across Oceans. go blood we large platforms. targeting seek in profitability. as is opposed We enough and Blue integrate ingest participate distribution our

Demisto which If IoT or PureSec, which acquired capabilities, Twistlock we firewall and as well. common serverless acquiring integrated to would RedLock a we RedLock being our be you which emerging We be will into into Cortex. acquired integrated We acquired is into look, is and platform. integrated

on not, to great at we we has acquired We provide to it have important our then prefer acquire, exhibiting forces early if train revenue, sales be market a engine, So rather rather you they product versus for acquiring good somebody fill revenue, product for believe you have to acquiring prefer and your excellence different go-to-market has customers that go leverage fit. because technologies product an multiple gap large also and USPs our capabilities disparate customers. because built go-to-market different and products,

added one we've which can but will TAMs. be acquired about least, that can on interested focus we talk Every in not of our and a large companies not which there the last And firewalls, slide the unless I We're enterprise. towns be second. the subscriptions, in to us our consolidate small allows to

as see in -- many of integrated Asheem the approach ASAP. business with that we product are right RedLock improve companies good technology the already to the of able talking in we able been to months, is their these We our as in So and acquisitions. which approximately like, of one by integration breed we've with what plan and that strategy -- our because product to acquire look do was done best could Zingbox, intent foremost lens Demisto first and soon pure is XX%, sectors our make to started mind, force first sure integration teams nine our about fact what

get our Beginning acquisitions more XX, and introducing through their with support scale their our teams go-to-market us month And start them X run we target we plans. business, to plays speedboats. we the their and in allowing the across our and core speedboats more market let doubling from to leverage

sense we Because there deliver of should by in fast count. buy is, philosophy of we'll to cash And terms of get can is that, become early, business, some the guided use going to of make be M&A past accretive trying that philosophy, that's acquisitions, and [indiscernible] you enough a we delightful as we are just the we talked teams. to to multiple flow as but a product laid to XX Lee not how a versus to intend they customers. have sitting build of that just months, that what Nir going will best breed And was I good about, constantly you acquisition make I'm us if and our I give out, smart decision, so believe

founders -- in our acquisitions company next here of that Alto over from all so Networks, organization in ago XX to working three as Of condition a part the XX two committed months over the be have we they years Palo our of are all position. we our product and make to

and and were business, product run that great and for them that them So to build right incumbent them build let able we us their and against make at believe they're right all imperative to create supposed great products, actually a capabilities to that we go fact is they the the run to circumstances, the odds it for stay out that and Alto we the Palo let there product happen. Networks because

So that's our M&A. in plan

is But you are what the half do do interesting. would I in more We and -- see believe even already industry. is how against would I would anybody do compare than only us find what thought guys we're we and this company largest do faster we the interesting. I space. else I So cybersecurity our growing

by the the In our who valuation. forecasting enjoy security next robust which next is we you out growth, company, the will our which to months, take people a leave XX%. XX% months word XX robust. grew Cortex last generation believe makes Prisma security compared and I If there business. generation the next largest we're XX The us billings we all

able security believe for If be to any we're generating Prisma twice as flow. firewall generation maintain as big our you category, business whilst look our next at our cash almost in Cortex company huge of FY'XX, we'll forecast we amounts and

So, I called kind slide where Rule to this analysts Day enough is ServiceNow this presentations, and call the is I geek Analyst out, slide. to a something is like understand where many reviewed I XX. this and ServiceNow build of also this

You interesting add for revenue growth some cash and and reason, free bad. over is XX% your cash, flow and below margins good XX% is

but is, so the ServiceNow decided company, make old Probably we're version we're -- the to median feel out that see happy years. of this. the The we that we we at far slide, look last to hope left at stay the next XX% the not firewall only next slide. of we're this [indiscernible] second above we the our least security performance, only XX based generation over from problem not on three XX-month us delighted left we're company, own of to rank our And and

So what FY'XX. our this in expect with from is that, we Company

a billings CAGR expect for over We XX% years. total the revenue and three total next

total to billings We and expect in revenue billion total by $X FY'XX. get in billion $X to

services in expect from be and of total We revenue will approximately our next generation come billings billion $X.XX FY'XX. security of that $X that billion will that

to our free cash get FY'XX. expect current to FY'XX flow XX%. long-term to billion expect by We $X generate of by back we margins operating target with a of And

of So from here simple matter execution.

guidance let you specific call who give my and can for FY'XX With more me Kathy, for that, friend, QX.

All right. Okay. Thank Nikesh. you,

a fiscal lot, in lot XXXX talked years. see a that's about coming So about and we what the

Let fiscal XXXX. finer for a what point we expect me put on just

Since moving to growth rates. I slides information made Okay. screen primarily to and going data these of on focus lot the about and somebody it's will am available slides or you, a the I'm year-over-year else? So, be on talking these

to slides call. these you the available following We will make

we for be year-over-year. to between QX to XX% growth fiscal FY'XX, billings XX% So expect

XX% of XX% We to expect revenue growth year-over-year.

non-GAAP which to expenses announced. to the we've acquisitions, net related of proposed $X.XX, the expect incorporates range EPS just to be which $X.XX including acquisition, We in Zingbox

year-over-year. XX% fiscal of For expect increase year-over-year we in the be expect range to growth to billings the full-year XX% of XXXX, to between to we XX% and XX% revenue

next-gen mentioned, expected As Nikesh range billings to to XX% XX% is year-over-year. be security the in of growth

turning expect XXXX related EPS of fiscal net range $X.XX, non-GAAP $X we for adjusted expenses cash recent free the to fiscal in also our XX% expect flow, We cash approximately includes to acquisitions. of be XXXX. to to margin flow which finally, free And

going we'll of estimate, some presentation, the you, rate, make tax also M&A slide share I'm that to to count, find additional related this In will CapEx once you impact to again you. modeling points but on EPS. not available them to read

move guidance sorry. on summarized format in fiscal it's XXXX will perhaps digest. And the be this, for finally, hands, the you XXXX don't holding hopefully our screen, clicker perhaps we've easy fiscal on the as to since think Nikesh I So well you covered it I'm screen, for already so but for the -- my yeah, should I

a significant expect with to opportunity changing products towards and while So, cloud we SaaS market gradual gradual are be do and more investing to we mix durations, shift in products. we delivered it our see capture associated of

As Nikesh event. mentioned, we're bang not big anticipating a

for above flow years the targeting greater. XX% so, at And to least XX% fiscal cash and free we're our XXXX, operating margins margins beyond be or

your questions. hopefully we'll And to up the remarks. our any ease. happy Nikesh? lights minds your of some be concludes of and at That address will turn prepared put that So now

on happy a guys Are you applause. yet? crowd. round her Come give Tough of

Okay.

people have mics. running We

see some I questions. So

firm please. your your name your Please you question, and state before state

you. Thank is William Ho Jonathan from Blair. This

you next-generation had components the making? that to I that questions little that for growth, you're can next-gen much is see unpack of ties maybe that regarding the how the us from of side? the investments bit a One you Thanks. And

X,XXX terms we hiring. individual X,XXX moved the adding Yeah. categories, and about those out to into acquisitions ended We mentioned, team sales. Look, more just taken anticipate next-generation X,XXX people, people we've with. we're down through to organic -- and both I break of for for Cortex Prisma We've or going people through not investment, FY'XX our we the components or R&D yet. But people as the highlights of in security

team reasonably core comfortable our in that robust the size. We feel is

small core So we're hires to our team Cortex. we'll our be newer of making into and but Prisma mostly additions focusing some

also impact into spending a that invested QX and of QX of we of is full year this going already what year. Some

So some investment, of it incremental were budget it to Cortex. we is QX of and for and But QX a hiring this follow our with some manage for able on is from Prisma which year.

cloud over there lot of across between I a you In Alibaba. is can -- really It's cloud to well the AWS, customers probably salespeople that Prisma There's selling GCP front in doing security color public is terms There Cloud -- of in out more. the we us. world. board, Azure, give and phenomenally people XX,XXX XX,XXX for be hundred a our few need

themselves. cover demo look, just show yeah, customers I this So and to when we applications, not oh, we my write They're, you're and show able when saying, go and secure doing. not needs got a them I they're what up and security is

Prisma we're Cloud. good seeing So really traction for

architectures abundantly think proxy about excited are idea. and not style Nir clear I a made how Prisma we securing how cloud-native Access it is good

is they Access well. Prisma the has where business their focus. M&A showed it you followed slide huge expecting terms are. has in done I to the of acquisition double Demisto from So Post plan

because operation ingestion. continue full we addition really data and So XXX the well, -- got first the in done and quarter us to third-party see more customers -- more we for XDR has and of of with

can data, ingest way make And ingest to the good stitching. bad the you alerts analytics sure and signal analytics and clarify, and don't just give data engine we we data we just suppress provide think that and do ingestion, about

our ingestion building philosophy around the data works ingesting in the analytics a is which So, and then more data philosophy [indiscernible].

board we that's So I the anticipate across growth, guiding we're an $XXX to number. think robust million to million why $XXX comfortable

hands up. A lot going of

Amber? Okay.

that? number, around that Ken that assumptions look and $X of are product going current what at Hi, And future your some to maybe Evercore the of Talanian, acquisition is that of how existing set? assumptions I your that billings acquisitions then build-up kind When from into billion ISI. much

many built Lee from as Look, a are of security perspective. fully believe maturity market that the in products mentioned, the we cloud not

serverless, at product six look is have front for we is a built, robust a product roadmap, think to nine in you roadmap which If of they XX% them serverless months. bought we PureSec,

acquisitions So interesting believe be we based future, which fall do security cloud will will the the there we might we in to philosophy highlighted. in have M&A

our $X that majority have future. which billion build with with those number able for to get We there industry and developed we But see as to major of should that go be the out anticipated, technology, [indiscernible]. cloud we been in a number. small feel and desire of for acquire to some haven't bolt-on plug is to we the no the acquisitions there reach in the or bolt-on So, platforms revenue products place us

Thank over Eyal with put past many concerns you. Oppenheimer. the Shaul have Nikesh, course you so. to rest hour, of the

Thank you.

mind one So, in question I had is...

one. have still But

but to be -- before So is the ignored. go everything Yeah.

towards to mostly quo about go-to-market? status above, As thinking at pretty partners, Or channel any with your compensation, with think our going changes taken heading a respect much into consideration should further? fiscal we it perspective, a we targets anything you from XXXX and have be about

in assumptions no the any in There changing are channel behavior major there in process.

the channel SIs they the are world, in cybersecurity. the We are Deloittes Accentures of in of of the or by and seeing and more AT&Ts active like world by activity the telcos more or world the becoming Telefonica's

If every building landscape, you of not telco, look at [indiscernible] consulting trying most the cybersecurity they're practices. very is every cloud only they're practices organization because building large

you the SI if segment fastest-growing biggest go, this of SP So space. and is the

If the business, they to to role us just products the future. with way we'll able with more today. in that's we be there play are of we have evolution and our deploy But the they us, [Optiv's] how bring yes, them WWT's [ph] to up to we in So, a will end channel. customers, of just anticipate some doing of bigger are

for talked example, some model, was for Thanks. cloud to business, term good be Nikesh Saket to even suggested firewall. no firewall to maybe Kalia license Barclays. hear. the you which similarly priced transition could from But you products the that about also a

happen? when quickly. that start you to could that give examples think mentioned of I Could we and that actually some just

asking to -- want the for I what first thank sorry, question. you, clarify. sure So I of make all, I

roughly them firewall payment, of for sell sell they Sometimes years would which hardware deals way annual upfront term the allows cash our and -- teams cash our for it the sales flow just cash is products three-year into our flow get business three durations. and terms the us like bundle our roughly get to contract we the in products

I'm up all deal deals. end instead saying that's of So the cloud being deals of three-year that, annual some

it, the cash large -- to this flow, I'm So I the why cash duration to alluded be deliver that we billion of next will over fact we next but that years believe we and XX% three able still years. be believe is the so the say to $X declines Kathy we're the will we yet, approximately said decline the get to benefit are three duration believe able over of -- not deliver years. the three which flow hence, we over haven't going the next We anticipating

it year. if growing down Hi. like guide products next based right, product business your for doing is billings It's Guggenheim. core to out, that in this the year about think Imtiaz X%, the growth growth at big Is the business, way you're next step product that looks I had Kathy, next-generation right from to math a the firewall which and from guide year high-XXs? guiding we if my the XX% billings for the about Koujalgi on I'm back your

Yeah.

about reason our from firewall I as terms at higher of but think close. in group what for that, looking we're because Access seeing bit we and a customers that VM that's technology are yes demand is little The we're series. both excited a it's Prisma this than our very

on Nikesh continue security so, the category, earlier, to expecting very rapid up rates. And slide at which to grow that are showed we

security regardless. between little bit may a holds all Prisma firewall customers, security can seeing Access mix what form by our for that in security-as-a-service. delivering line great the I our change think component about security important cloud there, forecast the factor are is still demand a of in that that excitement great still security, and we And in itself, Now, very network do really but a but

our of about have forward competitor we're that with factors been one these product terms win offer in hardware we able and to to the that deals with various very so, possibilities only being going And normally that that particular form think would we're jazzed can customers. our really firewalls,

And opportunity. so, we see really a terrific

Just that to elaborate second. for on a

$XX You with deployment of with a had Lee competitors The mentioned, a saw form And we good the was one close. went examples, a large as with factor. cases, But strategy. both million, a the firewall Prisma deals, cases In we to form were software very to These displace form other competitors I've differentiated we the factor a for hardware retailer both them one one is, and in were competing is video Access are was in able did very software we brief. another. two boxes. because over factor alluded have from news large not

you them If it in two a a there deploy box locations get or a try retailer, software, X,XXX months. and five year a in and years. takes three to half we in The can

to deliver deployment, us allow hundred allows part -- is, towards don't reduce force Nir factor, the speed competition customers. both trying are to of So, across it our form the factor we actually the via shift to on-boarding what because that the as we to capability which we're from be of believe to do has solution mentioned, for software software points our differentiated, trying run form

towards So bigger assumption, trying factor. actually shift more that's captured. you engineer to part drive the to We're business trying which our and of form rightfully that the software

Thanks.

more follow-up, one So, Kathy.

cash XXXX, it, your you This is reversed cash you operating target, recurring than below Is comparing us long-term flow margins long-term what What operating driving that long-term you gave flow had in are it lower revenues? time targets. time free actually margins. margin more margins the just last On free reversal? your

there that long-term When this I'm previous hear. we're of taxpayer. much assumed was the five we I it. we be our market to long-term about we'd We're years, everyone get out I that for to greater rate time, cash at Can growing much, guidance just given, a point much asked talking glad out clarify? sort in Yeah. And way and at had that of right? the so we talking you it the four is the we're when further described can And

for talking years to flow long-term that right for about reason so, now out. we're was cash And five us lower But margins. four the the free is

And four be not Okay? to Thank to very I you. clear and need XX. enunciate. I five, said

XX right. would be guidance. All great

the question has you. behind mic? There's Somebody this David on slide.

her her hand question, up. Fatima. a get And I woman I saw want with to a

a don't Just us now. ask hard one

kidding. Just

I'll go easy on UBS. you. I'm Fatima from Boolani

Just want base? in core seeing mix refresh shift a dynamics shift quick or you mix point the of clarify... you're to clarification dynamic the own installed within are on displacement of a firewall business, is seeing that the the just I your

are retailer, there -- multi-branch I similar dynamic. many case, displacement give It's specific multiple user a where or use it's it's whether one more situation in mobile of whether places a you use situation. but cases

We the mobile or have for more who a solution users. to Access to customers go type with Prisma XXX,XXX employees want

than a our business. of -- center data refresh of it mostly it's displaced a is it's competition dynamic more displacement firewall So, a mostly --

Understood.

So my question real is...

you're where don't going, know I worry.

about... You talked

months one going. three you're spent where Kathy, these go. I've know pouring every over of of Please so I numbers exactly

lot pillars strategy. your a corporate You of each talked about one the automation of in

your double million of if customers to already four XXth I I some that are that with million about annum XX we fact or with $XX And in your top opportunity spending the to largest XXth about so, automation years? the with five your per of the next spending you? there think expect what to should the how mean, dynamics $XX business you. your and if close think largest size you I the mean, customer

Cortex let XDR use So, right. use me a as case,

analytics was Traps. of ago to lake, a do central We not who data, months thousands collecting data insights Traps against it. The it us customers version and allowing of to sending have deployed four

ingest are We those to -- and XDR. and back customers of them to able from go Cortex to upsell them one data to give large allow there and every

use where analyze you going signal-to-noise is the say, it don't with automation take data case and this to Demisto for you give couple forward. take why the a across we'll we'll and we'll the us be So you, reduce we firewalls, endpoints ratio board, it their we and their collect able to

because that's their data So, use data XX%-plus spend. budgets, take to SOC with where and we people add the our fastest-growing that one and every our are of firewall case, deploying this SOC. budget ingestion customers, people our endpoint more building comes can out growth more for is automation customers of more is and category the year-over-year, customers, logging example, about SOC

that those coming of X capabilities? out coming services you foresee type And sort security And providers traditional of of dollars managed you offer more are from the do essentially? these wallets Tier

we up XX analyst. in from owners, coming put is saying, can to from reduction. we times we instead Those category, of are of there, interesting drive hire to SOC Traditional coming if and numbers are we're dollars and for dollars, terms efficiencies you a there both alert in more such also they alert come those will, X some are times able you is SOC but up out SOC reduction approach

because the our amount able X I hire walk say, to number people reduce reduce it's by interesting. customers can of very he can XXX and coming out If and a are and to SOC of very XX have by I which few of to times, hire SOC scale alerts savings, huge of can the the number their analysts the of up is that that's times analysts SOC alerts kind of

in guys which few new of customers wisdom because going I'm them learnt, it. wrote with not the of firewall policies. somebody and delete are seven, I very some to deleting thing They scare delete One can mind eight talk about, I oh, says, policies

they to ability trying that is keeps back the remediate fixed So SOC policy. And because analyst the and alert? an poor go why to coming and alert have out there interpret, that is, problem the that is no

That's be radar. you not at, understand you is, to and that's this bad how alerts of end you a so alerts what focusing don't that time XXX,XXX part or So like understand is out that you can on how under important let's I'll hacker important. if figure guy, Demisto look I'm the doing okay, why I we stuff should with spend alerts, so to up you prioritize start trying my automate a but the

and want is, endpoint, out look our so automation. there every So through at why can if put philosophy way of our get the works notice, he going we automation that is TAM your your of in we're there believe from has works services take SOC, you alert that we only a because one away and Automation every labor TAMs in part into to automation. to this large that the in firewall, that's works automation automation that products the is

so much. you Thank

Amber, in back. the

Auty with JPMorgan. Sterling Hi,

throw a his So, and one has possible, question microphone? he can for if Nikesh if to and still Nir, Kathy, I question follow-up

Yeah.

of course. team management here, entire is Our

right. Fantastic. All

Kathy, years in on or some a And is do you finally, could tougher pay to we what the only versus customers you're forbid, reduction I last being instead and feedback and that terms. years, payment managing Nikesh duration a Alto the next going actually so is, want? if over three that XX% upfront. one quarter perhaps to the Nikesh see into channel mentioned received be God So economic Palo items macro more times, at wanting customers more flexible of year of duration we how of the much what roll Because over time three the to positive that through

to... Kathy, you want

Yeah.

time. customers provide last terms fact year we do our incentives economics really us period talked were to have time. what of where about -- that for a us like financial wanted a longer that be we We and pay trade-offs to customers to we paying our thoughtful have to are of deals commit talked order about to of issue quarter, attention the close only last the very in of at a very that going in about to those We sort

a practices going we're actually that. our adapt that to will today comfortable if find lot the there us to of they more wanting. our are are pay But demand date. customers with billing to And very And to way that, more what customers we we and continue who comfortable customers of are obviously, do our very with

be surge this to on that so, of one-off we handle And tends request occasional we're demand. huge seeing not basis. a It

having we'll really that is by could the more contract shift and, over it quarter Nikesh, shift the future about. become we've driven products durations, and which I'm Cloud, larger Prisma talked we bit the Potentially of -- time. been to in a mix last talked about of little talking growth which that big we shorter about sorry, adapt of course, the But primarily the

on and mechanisms the doorstep the pay And industry that, an last I've there are our cash worth show sorry, to certain entire just discovered already channel has to sort basis it -- it. at the the contract XX financing durations out flow. in wants They industry and they up to who And of add facilitate some with compensating want to of over annual place. months, with customers the figured

around companies enterprise all been different financing it's tactics and a which and cash are So, enable to generation. of have time, for many long there that very flow arms kind

I as have here, go stuff, So we wanted the that haven't will But question. that believe inevitable Nir normal. you assumed life any of on we to

when Nir, out the did follow-up, you kind The about forward, when talking going of didn't you competition really proxies, thinking about the X of Exactly. X, name. but were you kind and call we're Gen Gen Prisma

terms very understanding specific I be So in who of think... to you want

You think call name. didn't we out the

Okay.

vendors, moving of I think Access Prisma you the mean, get upon. think or are it. going about is to forward? be touched But the that in kind part think up terms going traditional firewall in be space? well? the Akamai that of competition you is all do to other what and do you we squeezed core to Who out what of they And companies Nikesh, happens come Zscaler all with offerings do as do the probably they Thanks.

the competition Yeah. I -- so Zscaler. is I think

even of be A However, long right? the right multiple end times, the the I told ago, And at the that and came the FireEye story, some right FireEye signatures of but is they strongly time ship that architecture to world market the believe running for entire to was and win. we've right? products FireEye, example, and been out of sandboxes that dead day may going wrong the and bought it and technical this solution. of you had idea are

run it went of entire for we up is a line to means sandbox detection. know off all And sandbox infrastructure, their a technical our be to how be we and First, everything prevention, needs way, across replace to why which second, went that's no they has do from the It has to firewall. it both going not way needs and perspective, to and it ended in us.

breaking same way the the then way being that right the way a market, packet-based the part facing right always way. the to product to just way, is in And now. think deliver firewalls situation routing, I a been optimization, something right doing applications. network participating applications, all few we're not participating the to So, there have is and device, in and of able There support right been wrong being have not wrong the technical being and applications, of the the proxies in network, always network,

if that know the turn strongly Office you you breaks right Because solution you believe I Microsoft And recommends go own technical Office when use it's you -- don't when Zscaler Because I will their XXX. know, what if win. XXX. technical that do. that's use proxies Zscaler, Why? and it don't solution you to

to are single be it, does of back of it, of don't if our has do able side in don't that things. security SD-WAN mobile modern the different application the part about. just of side they branch the you I it, look to both and for at a the users I today, to that competitors into lot the competitor portfolio complete and access a Now, CASB it, back you side firewall infrastructure things. the their different into need corporate infrastructure see anyone competition the we're Access in part cloud -- offices, of it, of into to the involved what's talking what corporate do different And see do

out they firewall are busy Yes, vendors, there why still are said, against hardware can't I figuring like the firewall their vendors, sell ours. the

-- building it's least, point firewall they several see last of to firewall I just the where five and behind them. -- years I three years virtual spending at building time the -- behind just been we've are just firewall competition While a our are cloud-delivered to hardware from our our plus I amount they is, don't

Nir. you, Thank

to going I'm recall...

businesses respect we and are customers' that build glad serve amazingly say able to means we're our Nir to cybersecurity. What we and the with is, competition large needs

that's he said. what think I

delivered deals Matt results, is strong Hedberg, strong. every other buying some investors out Nikesh, very macro, have right is Nir guidance like now? And this quarter a quick pulse when RBC. executives, question It question then seems view a talking the there guys behavior what of on of is obviously, you product you're and large as well. multi-year I the guess, out to for I very

Amit What's this he seen Yeah. the He Singh, there our maybe who to in out President, context. ask more talk you have away. has interesting and not on because can I'm grinding been road going

the to grind. get I there stories, the field in good go tell So get guys you out and to

up. you So, come let's have

So...

Oh boy.

it, as The driven it's product very service buying excited one, backdrop about that everyone. -- movement are cybersecurity a towards Hello, very, of that products actually and the behavior actually and are see strong, the have, side acquisitions. we is It's the cloud-delivered the delivery you quite by because a come solutions, we side, papers is all these well solid. software so as both in the quite for the I is real on from. challenges climate software-delivered The and

any many very, the very it's look trend, way the it's solid. you actual market at And all cybersecurity spending, startups, interesting, were funded, when to software whether startups how

think, Your question was, the macro picture. on I

haven't seen We any slowdown.

some We business, being of measure we around hold clearly, shared generation pipeline our is generate growth, haven't while that to businesses partner being saw also to brand new pipeline slowdown, testament them. of able the scale and QX numbers core performance able seen and a you pipeline,

quick consolidating And on out -- then of when maybe category think what's about Alto have sort in role it's hot Nir, just obviously, It's platform? What question. Palo there. view security a product is a identity? your spend, the identity you

Sure.

of most our with network SaaS a going the identity all firewall the only cases, as customers the enforcing case not enforcement. when cases, where because and the themselves needs sometimes integrate most bit well. Actually, that it's firewall the security access identity, you first, is applications of So it's firewall our do performs identity, enforcement, the to in is thing applications. the In that other

the that's So rough identity.

which becoming interesting Now, hygiene, who and to if focused of market connect who commodity. you on I it's look called an today, the is at what's think but the meaning market is can application, connect cannot most

I identity interest part interesting think most Identity -- more analytics. the of the is

the events So identity. and take out being able identity from attacks figuring to

area today that's is opportunity. I and not that's by that's think being the an -- addressed So one market

-- I identity in that's still that still could is the an day on other be the think the how machine-to-machine think identity, is that and out interesting of thing the one I to at. And that's side do market yet cloud. especially that look be is, decided by do to jury you

Phil Fargo. Winslow, Hi, Wells

so firewall you Prisma -- to series, focusing break series. a question billing the we but hardware Prisma about the lot on VM wanted VM and already Access and out slide there to platform my the versus focus your today, Just wanted here firewall talked we on

the cloud in lot of One series and from of I rate questions rate the attach a investors public firewall attach get is environment. of VM

to where forward the in whole how And are team and question are it VM that, increasing cloud, terms But one, billings? security? to your we of of series series hybrid attach is so, about it's kind multi-cloud rates you of the also, contribution VM here thinking call

mean you of series? attach what the VM the question, clarifying Quick

firewall the like you the to call -- AWS VM from it of Azure, that got series attaching instead cloud a actually out-of-the-box that workload -- like. vendor, and The get

were how It's in in more because of have very a cloud VM of on came we're platforms, it's focused series at that private evolved shifted workloads terms supports with really when use The to cloud case we into the automation. specific public done. GCP, of VM cloud it's major first cloud how pleased do series today the So infrastructure. it different evolved first number with it all how as of Azure, ways would was cloud, out, and -- are the that vendors generation US Alibaba. orchestration in the very we and integrate well the then time

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a is happening that there really So, lot good things are there. of

go unfortunate only to getting understand they that hump aspects pay really the only the security. by question a where your through get challenge sort that I'd is, companies and enough need bad thing often back can good company they actually people that trying real through is do to to of triggers that integration knew. security challenge that try only what But they challenge, is people they -- -- relative happens say, big that also think the of before will The And attention. and may sort best-in-class events not realize of first lot something might that's really challenge the cloud of without -- a the over mechanisms the the various to is we the and be but

here. question A Okay?

Bank. Keirstead at Great. Karl Deutsche

all, who only Nikesh no you guidance giving First for a you of longer that annual for thank guy the said reversal. year quarter, next a ago

adaptive dynamic Appreciate Yes. it. I'll earn. --

test next I I'm the XX% I confidence both let's context just the billings wanted your growth having a over grew stress say, in years. saying metrics quarter to, in up revenue XX%. three And, put by and you guess, where of you this

a to and XX% three. XX% FX stage bit that which optimistic, if given that a for well about at form you're At shift, sounds look we the So software firms as saying this. you're on going going that others little first and up like you especially next grow through factor are you're just hardware talking put to

It tends dilutive growth overall be to rate. quite to your

damn is can you. be it? So, still products skate is it and just can form you that only growing quite it to kind are of that shift Thank fast, Or despite around emerging gradual get that you're XX%? factor so you expect you to but that

hate in the thank the Nor and I I'm and behalf to comment understand you, and stage stand on on the of I nor If of First Karl. walked in I clarify, all, understand didn't I some confidence Company, was to giving levers X,XXX having understand did deliver. the industry guidance the I degree when and to our not because ability levers up comfortable of of allowed comfort people did of without I business.

you our guidance appreciate of during but the year I one large necks. we last have hopefully and quarterly our around given put a I guys more news think So, and guidance,

Now, we have deliver this to out go stuff. and

you reminding for that. of So, thank me

suddenly generally in enough enumerating a has want that I need we part the will that your and an where recent I I or unabated that even tell level, was three there have security as not cloud security. not though is cloud to growth alluded I cloud, you parts. fact seeing take is, there parse enough are into and the you cloud breach, people can there comfort not there has of tools. of source name cloud out our cloud And public question customer a used been be breach. provider, can of using you two terms One open the cannot the security it the to In been phones are but ringing set got people because realized a breaches, for

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is you at do who to thinking is no go companies, the cloud. out how I look If there there not right, CIO about

very important. is this So

I'm enterprise I as do rethinking I security? it, do cloud the they're branches. what if they're do their rethinking So going do I to How it? do with with what rethink my And IT, my

a retailer retailer, to put needs their branches. into a go of to You bandwidths lot

customer move in security all the work, to the needed. back you was In little they They that's Today, and they store. the want and want there need AR POS suddenly past, you systems data in store. your forth, VR to needed bandwidth,

believe new driving have And be to newer being is there we use strong. services. cases is which believe of the degree some our created, we continues in So we core some some our confidence business of of

have we customer be billion way The out We underlying customers many to twice continues have going said, hope you which there business more are say, that means I've $X.X fully or as only double, one to we $X can number, the I there base that of that have strong. and a product there's double, to is kind roughly twice many core get. realize as from, let's salespeople, billion number to

right to of we're FY'XX in deliver. We've So QX investing give shot. our has as in QX it be we of speedboat ramping some and up think our should done able and to best both got now a the balance core is our capability, and We'll stretching lot we of capability our execute. team

much of not New figure Pierre all changing a thank Nikesh, Street. I time first out for me business it your you long all, model. and It Street. Pierre first took Ferragu, New to of Nikesh, --. spent… very Ferragu, very

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done it to a That's What And Nir. ask gives so of the great. me more to far. product question have opportunity

And well you've proxy-based wondering, have next-generation defended you was in was transfer to and that what very there. I benefit how you're competitors. the from all your the I so, you But firewall you how plan you and explained it in very done what development crush completely already well to acquiring. wondering you've technologies -- And all all all

in what technology? did Prisma with a Cloud we their using How first then And Palo benefit it when your firewall technologies existing and environment? in Cloud, does having benefit that? it, your having how you integrate Networks if look clients So, Alto did Prisma did do? from at for the components you same they from the they instance, day of came How

you for question. Thank Yeah. the

of a we Prisma RedLock. incoming a vigorously companies the about companies, it's as The Cloud, integrate teams to the us those interesting couple of the plan. Nikesh four integration to that Evident.io as took And now the of two out level together founding months. formed execute, terms and acquisitions, of products expectations two into basis that platform. them, two asked of in give Four we responsibility So, single continue more to of we the apply an to principles these months mentioned integration put on well you was build about

Twistlock the happen. It year plan on all be forms will it companies after this Prisma right into then integration able acquisitions we includes calendar now the that platform And by end an execution foundation in the and now the in modules very into of Again, agree this expectation sure, to pulling further to extend make that midst we're those to the executing that where the we'll of order now that the platform. be integrate the very out. much with Cloud teams quickly leadership PureSec of continue on together in new an building and that then

a the of do we success. people very is good lot that can the giving responsibility, executing. then a right we're the accountability right So, right this this And around showing and

the adoption that our same security to aspect then, easy they're showing the additional On powerful already they're very and a get cloud in adoption to. workloads, that deploy up customer simply enabling. cloud seeing They are of a capabilities which the used is, consume go-to-market is very products platform what and against side

Yeah.

XDR. Another example will be

data, together. both do the to and we believed bought make we're they're EDR, sense right, and company, their more endpoint integrated now network and And like and and and combine we to plan can as into we're an take that. can we Nobody it, Secdo So we on generate based take meaningful one to bought don't analytics them more in things going -- NTA that. it. data, said, we company, -- do NTA and integrate LightCyber I believed first EDR integrate together Nobody

type use that ask it have, to other we which And is to like all flip customer we it the about our service security, to is I is, we firewall. the attached when has we develop think buy a switch. becomes that a integration DNS Zingbox, something or do partly of like to someone Now,

and don't the you You you And to the month, buy for whatever, like they're a customers, it you and not buy. test flip see it, don't you a turning can't you just switch and most like use that they it, things week, they you product. a service, it buy

thing the is form apply factors. all to And interesting that, services those

you So turn that. firewall, that, you Prisma bought if do you you have do a you and in if physical Access,

security IP you you If with what printers do, the competitor need the IoT you video a and do? which secure proxy went you like branch, have in and probably you to phones want a things to to with network in branch, other do competitor, connected you the cameras do and and

it, all it. IoT company, With on branches, to a the have the switch, Prisma you you real branches, an already, branch you you go to you it if Alto security it operationalize It's X,XXX like you and you have in deploy You buy to are in customer buy to product, you and to it Palo you buy have you immediately X,XXX applies points it. like Access it turn don't that don't Networks, have have to simple. do a somehow if their deploy your it

Okay?

to other gentlemen. right are question the There next

of that wanted of M&A, revenue up Hi, and Nikesh that outlook, the deals I inclusive it's exclusive mostly see mean Kathy M&A on billing move assume don't if you, And we is Montreal. but just clarify. think from you probably just that of smaller is, I I to the context about Bank could outlook you Keith is by what or Bachman what as the board? put and for the

go well they'll relates margins, the to move suggesting that thereafter, but this you're lower year margins as you it higher. And Kathy on

forgiveness deals And ask even for in fact might in the deals pursue some so, M&A for if that those again you if the might M&A you smaller that is margin that some do you're growth margin. So pressure suggesting outer you do years neutral?

question So, or is of exclusive inclusive M&A? shorter the

of has to large any significant acquisition So component. you which revenue it's framework, a a give exclusive M&A,

part earlier, no We're M&A the buy I be is we're at acquiring as So, a if you gentleman right, a million in for million, not looking is said where as numbers not stuff. looking of that strategy. million platform go $XXX revenue, our XX% plug going a a to to bad of there not these $XXX as that's growing strategy. revenue We're company that $XXX for as plan, --

it platform Now, Cortex teams you better and, in the context, think from We've acquisitions. and built integrate. for XDR about, we're the and if we the off put integrated PureSec, didn't six deploying platform. back Twistlock, We we across sell -- going we them to it example, are We our integrate it to got it RedLock, for together. sold we They months. got after. put it

a fit be So platform of that we'll impacts needs acquired that be stuff you a the if as and you find and posted the to keep acquire product there across integrated what we to are have financially. market them, is need will product those

not that a told take has after these numbers. organic, numbers, FY'XX million to going and year to year be our Kathy of into expectation year, have going going saying into and have you impact, are These EPS acquisitions take we're roll for it's doing to numbers. We built this $XXX certainly we're any every that one M&A $XX raw has million we organic

there's So those and no something do unless -- we between numbers. FY'XX, will now organic XXXX is be there then become there'll --

a answer I every heard broadband The XX%, I of three years, publicly, the so. poor in clarification three Jail, to friends jail, And which keep is think years? I'm that across not out that my trying or still year. MPLS. is of thing about question want on somebody year announce every over is question I duration asked One there to a was

last wife My idea. good night. black [indiscernible] Sounds just watching the

Michael Question SD-WAN and -- big talked James. Turits you and what been don't Lee, there. SD-WAN talking big is of from for a I Raymond has Nir some So and part about for want time. about guys on Fortinet you

SD-WAN to you So of going how do you all, do think I'm trying about, first an What player? with become to it? are

we place Is services Zscaler is for component, what and wins by doing and say also can this a improve is cloud function money? doing big saying, hey, going it SD-WAN? are to that do networking Fortinet to to similar it GlobalProtect the they think that's help use you too I Or networking because salespeople

a that's with but... networking Doing proxy, Yeah. interesting,

any doesn't encouragement. need more He

while. proud get want -- I seen perform to him for just a I have him

Yeah.

what SD-WAN -- on maybe is. so seconds XX SD-WAN SD-WAN, So

word a So, page. on just same

cable to and connection making to it regular you DXs, sense don't cloud EXs, modems, guarantees that, IDSL, they whatever The move get. provide challenge is that -- stops applications Internet MPLS, the As with performance start you the that and you using can does. want same through whatever, you reliability to the MPLS

Salesforce.com on in cloud, sudden, own but same applications Office or the your of the you the start cannot G Suite guarantees. cloud public and you relying like all in get XXX So, and applications

taking more less connections provider another or applications on get somehow same course, links you a the so of on, at what modem networking much reliability and one the So can those cost, tool you lower XG, need. MPLS, them that the guarantees more or which from to doing so get same and and the XDSL or with a of in much from that SD-WAN higher a and DSL or a is is bandwidth, cloud cable from some and multiple on such about DSL LTE kind Internet like or tricks

those that's Lee somewhat where is branch can meaning doing subscription much you that, said, the to And multiple and other in are security. branch, doing, SD-WAN in are weigh Right? of networking better like if what our to multiple in make firewalls Internet and take we on a security. that and similar the that that reliable. differentiation do branch do firewall firewall, building to the respect, there you can that's vendors the that, of we much add we're We and that that ways being a doing the course, always going those deploy Now, become on with that it's SD-WAN top you can appear connections in meaning itself, it tricks -- are do firewall you of to in more

do which Access, bunch The to we the traffic cloud, is traffic the do to we'll deployed and a is today other which continue SD-WAN in and partners option the need with it Prisma -- to Prisma well of Access. to do use bring as SD-WAN to firewall together.

or is efficient IT much SD-WAN. can do it with more do you a Now, that, it to something sector like with way traditional

Prisma new is SD-WAN and security few Golden have don't upgrade, every technology you traffic Access need Gate right? then to you WAN goes security work to years, in to and do deploy So branch a your that painting kind which box that the bring program of the of your you your like the Bridge, software-defined is fail all the because to Prisma in advantage Access. The

X,XXX branches, Prisma have finish you and don't by start, beginning, real the differentiation that's X,XXX, with Access time the deploy you do you the start You what it you to have from is. to the

Prisma have need SD-WAN but that SD-WAN something and and to using like to the TCP for restarts the doing Access, to not have which cloud something not So the to in that just connections based. way to the need rather a networking the a cloud proxy. doing traffic breaks them, in than Access, SD-WAN right It's SD-WAN branch the you and networking bring is Prisma is you called do

QED, yes.

to we're SD-WAN. No need building said, acquire? like I Lee Do

Okay.

after front? cash year I'll one hit flow of question think primary primary of what the decline duration as on margin questions, Couple Is should this JMP. the ask or on the Suppiger, cause the Erik second the for that. free margins. we the

reason new primary to that reason decline, The our our the drive Yeah. decline that not investments the made. for that's business, only making, the also the organically we're of primary the you and margin is investments for M&A we've operating but same areas see

Okay. And then for...

Which is around. it why to we turn expect

CrowdStrike is there XDR for out we've that or -- success much this point? Or how should the Because to can Is competitor Traps at Lee, installed getting much that of thinking from a of that XDR, of a of sold we base? for be how gauge Nir about product we How outside And Then here? that? while. had Okay. production-ready? is something how be that's this your viable to going

actually very happy we're as we earlier, So, has mentioned done. XDR with how

early. it We a -- four it's about announced Now, months and five half, released and ago. about

the customers of number full results added. saw for You we the first quarter,

excited to XDR. And about reception we our here the customer initial reception, market about hearing the from that So, are very messages things talked we're customers.

the the the No incidents. them give time no else visibility, data. Very and network -- reducing with to can stitch of alerts, to amount actually ability -- one do else the can one reducing takes integrate the end-to-end that, endpoint powerful the it number of data the investigate

we things customers here what here they're hearing So -- all our are adopted from have because that's we're that the XDR. said

Okay?

change The us that enabling and is analytics is, conversation endpoint to strategic with of with -- sort automation ultimately conversation not and shift toward one the of about the and this to toward, our really the a protection, aspect shift toward is interesting that that Demisto. but just the customers very tying

Okay?

the theory… So going back to

limit No. doesn't really technical yourself EDR technical and that This is an case endpoints, will just end sense. infrastructure. any to endpoints through make your sense win. where I we the They just the then endpoint happen yourself endpoints, application entire propagate from the limiting data data can over take and up right similar. is. SaaS processing solution doesn't almost where data cloud, to public to the know think where to the back another make responding start from any in Proxy, in collecting the that then and the and network Traps then all It across

entire attack, It or it find way the use to and doesn't your whatever the collect entire doing from entire parts when is which I of the comes I basic the signal where see response. to to don't more collection from, is multiple data go respond through it see your entire doing -- right data, infrastructure, find just is place, responding matter than in data competition Demisto And data the doing just an analytics, you to all came back the in, infrastructure. infrastructure one you the technical back don't want information attacks-based it and people competition the the endpoint kind of to that. where of into the

marketing we around are there So, right next I where it, much get we'll assuming and marketing time competition. go-to-market we think be the about that sales are right some talk to features, product and missing more able the and versus the

perspective, could a given great sales that product months that X.X fully elaborate the core didn't selling team, compete that had -- worth in dedicated a we've we months we because was market we on If a which and force competitor as with have ago, basis this had experience remember against terms XX of may you from sales these mentioned, I activity aren't market against point-by-point the product. only on of competitors adaptive in a some of the

saw Traps able base. it's we and not XDR, that the getting them there, them product. that's protection after we would at Now free. getting we But in together months it's number were we the CrowdStrike slowly which six have not first, of beat out do against in Again, act our this and we're went deals, But we were fair installed launched between because I Traps one installed stuff. compete we've in didn't point. to endpoint We have and base, because XX% EDR our a Traps ago, XX think made saw an XDR. speedboat data say, did our deals better to is in teams we XX why

of customers thousands Traps. have We using

that that is target Traps, a they force, they able deals go who than an buy better delighted a already do were we -- them CrowdStrike that make delighted but them can have were of customers Firewalls, first have the to because XX% those more we're larger in deals. who they XX% Our we [indiscernible] XDR of sales already than and to beat sure to XX% we're have

Shaul now. from past you. question Kathy. it performance been course -- again. Amit European the two were quite years probably for stable as over Oppenheimer Thank the or has of Maybe

I have we not and last seen think as this quarter as before. quarter, strong

issue? related a macro it your. asked? So, Thank issue? question is tightening UK-specific a macro that Maybe it to tying a Maybe was -- former

it on go just just headlines a cybersecurity team, countries national we're It's actually fix is. strong Europe investing opportunity. the really giving and love resources, team leadership legislation is the the adopter -- to in Really there. great -- is there in of And them we it.

and do for in So well do to better EMEA. continue growth to do actually it's a -- us opportunity actually

right. then two in got front the back the We right. All one on the and in

Piper with Nowinski Jaffray. Andy Thanks.

on you service, Access customers your months in with It they calling Security the question looking a and as performance keynote was the a architecture? you've Prisma scalable. the performance the cloud fixed they ago they on were had or which few said, GlobalProtect at Zscaler just Conference, for. the and Prisma stage how tried regard to wasn't stage guess, changed you're that At that now get well, about Access. I Gartner can few the didn't talk So,

We competitor. was said -- it was actually customer. had a existing company, not selected it they And

get flawed the it And we performed was Prisma was us Access that to with provided share them to you're after no said, And told flawed an test you same a show the was we it test to how it the So doing? be and wonderfully. in test readed We and able longer opportunity one competitor test, a test. last can had thing. were a flawed chance by they and us they the

was most the locations that over And where before on-boarding the world. XXX around have recent now Access we to update Prisma

Access cloud of a -- very globally capabilities are we with pleased the of Prisma deployed So, as performance solution. performance

And of full against hospitals, the a and video about POC you as million the same ran talks employees saw, a they which hundreds competitors.

--. hopefully So

which deployed. is Sorry, already Yes.

back want Brad coming in to take end we're and to some Brad. and on Question end to a we don't go more questions Q&A the our will right. All the of few first. let's there But session. I then,

This to is if question actually your your today. a is months fantastic about ago, My transition. presentation really simple. talked you earnings in Three listen remarks a call, we

Yeah.

is a of There not transition. much

Yes.

Why?

sat going full our down we we we are speed perspective, accounting way were have it And ratable model. back glad analyzing make all ahead doing when it. step asked I'm can months question. legal Four, which we and you to this we a okay, ago would a transition fully this. Good every at looked we a from perspective, channel, the to said, salespeople, perspective, impact an why go-to-market five and

from Our are of dollars buying have a customers They us. products billions motion. of

personally good models, Our the to salespeople our how money doing we sat we're is record and said, Cash like to models. I How because know it. it. industry software likes sell flow thing. And a upfront. it down our

and I'm and I in it hunt have model? every going to three. analyze you year if them cold rest year to use to Why year You this year, go hunt, store put go a some use of in out two, go and do

trying to more and place, the So, were hybrid software a ARR-based -- unnaturally model a to business model are kind pure a transition Company's of change we we to that is which just it's akin felt SaaS we business. and

the strong, really We have a which building we're of firewall is we and very business, characteristics of the and business this security very believe we like. going next-generation to be some strong

us. We be the cash, revenue, we like like cash that brings you allows you amortized. long-term upfront fact to this that the gives it flow the deferred like We which

decided we that better going off this way. we're So

analyzed why come look been for want tell what This we're comfortable six and in Right? every not this making were been we -- to then So the trying what's important. has Day that everything at Analyst Sunday. is here. months. And we've we to you, important, We've what's

read that As you'll I the the I deliver months most if you why from you owner in us but about, and got I've to to have be them, notes way [ph] you research you apologies job. said, But but a I of models. the product. to guys, probably like want the will of the last company never read I I of understand I read all and day customers did those as you, read, six Company, and But the did many run guys the have concerned

So that's why.

Nandury, VMware Insights Carbon Srini Group. acquired Black Summit recently and... Nikesh,

Who?

VMware.

Company? Which

VMware. Okay.

Yeah, yeah. know VMware I very well.

Black. Carbon Acquired

Black, Carbon Yes, yes.

Okay.

going of question whole be going for are we to like landscape make this going mean this landscape and to in does the companies trying is evolving, this, VMware acquiring It is sense is how space the be the what So security more to looks forward?

on lot who And important, accurate. people and is they're I that's of think stepping can't believe all right? VMware And I their There up are acquisitions strategy. comment security security. probably

vendors this X,XXX to more I a You going in don't see think acquisition are space, because lot survive. will

he next multi-vendor Networks haven't than One more years, integrates will of able solution behavior. actually desire -- across environment. Alto a solutions. in the wants espouses a five for asked XXX be vendor see multiple at I was wants customers questions who's the and believe early looking secure which seen you gentlemen Palo you single or their buying will up I vendors EBCs where show buys consolidated see to she to multiple firmly They're customer he that buys.

So, if or Microsoft, Broadcom it's it's actually any whether can integrate take whether and company products out whether it's there, them. VMware,

think they're to I going win.

acquiring, not companies. the all is Acquisition question the is So, acquire can we easiest part.

what question you them making platform? is, leverage of you can being that, them integrate actually platform customer, into The from and level. Do a integrating is part them? that ELA large, an get your or them hear in I Acquiring your putting actually free

it security because in an So from because the and there is people ELA But interesting chips into and PLAs could consulting disparate a Es to have soon those it's new an ELAs does a them security PLA than will to products to more term and anymore P. be not put space you now, parts. you have hear are

platform. integrated of need customer the the is true think an I

together So container part to and workloads do people to need do of cloud it as to just can deliver integrated Again, you to you able platform public next-generation to be firewalls more security, them. need together. endpoint work serverless similarly articulated, Nir able be

to after own at I and go market but typically to nothing And in race. I good we property. has display selling very one not the display they When They both worked with display their Google, their a horse Microsoft had And apologize they're cross defaulted didn't they own the had I security. anecdotal properties, tell And the were selling good of do doesn't Yahoo product. had at because want Google will one, apply. at it if advertising, no was you, businesses started it one.

or own when or AWS industry you or don't And integrations GCP you my product and of Azure their at security core start solutions, a across looking job with with alignment like products. hybrid industry native cloud you your better good across concern and sort as is VMware players, better solution, to do default of

platforms be trying multiple platform security as their to opposed choice to we'll when integrate is that the hope across our you platform. So, and it platforms of buy bundle

So, somewhat integration strategy deploy not me I stronger. if long-term Tomorrow, to more revenue multi-platform VMware, want would you revenue, suspect to maybe me the scale given solution, have. Black which deploying be is may is gets think would I be the don't today? gets that, a I outcome I more Carbon agnostic. I I but going I'm the want is which sure have. platform

platforms. actually better make work it for you can cloud multiple it So across

the guys. to or Up tomorrow Go next make like want guys Wow, you sure didn't one ahead. questions. leave I'm week, ask here sure don't they why it and questions question Last right. front. I All read the about I or answers. two with

secure we're going presentation be out proposition like Excellent. crap And and compelling vision. product also got you. scare of that's the great to having we're to it's -- But see you really Thank value provide going for guys them... because a just this not you to to

here. field We'll do not that out in the

going going or going I like why do to that going doing that there it security proposition be good value and change. the it customers down we're firewall we're making the go really a firewalling more drill to like overall. a effective firewalling firewalling. Nir of must away. to to to provide see. sort wanted of still be going easier We're But is So to dual-value into is seems where presented sort to doing rationale isn't market

traditional a stable, have kind guess, to be still firewalling of at that from market done firewalling of going midst edge we kind the of the I capability broader I the that an should Is question network. the is, appliance of in of the the declining increasing, expect So, part grows?

is you the So, right? leadership part and went I then typically data I'll I'll most and depending Because for between of years, infrastructure preparing last as seven Analyst Day, of what our give it's have the services, on looked $X IT that at is others I on back IT security go enterprise is the The security right? been product some the government to it point and a answer that. for because XX In X%. There to is spend enterprise X% seven year, that end-of-life that's it. go to X% of to because where approximately to think you I goes spent $X.X track I they're IT. financial trillion, the buy conscious, number, very trillion reason X%

of you're cloud. talks it, I IT enterprises, IT of in there about going a to a slide So in or and going to Goldman out Goldman there, think So, is all entire about and disruption cloud remember spending up we're trillion $XX the the I me $XX to go is right? approximately is going either slide, trillion don't IT is Gartner to XXXX, $X maybe enterprise telling it's an down Sachs, which the plant trillion which put in plant. we're slide do Sachs you spending morning, from those, stop if this which infrastructure there that we're is, opportunity just

are are and of enterprise $X going spend to it, trillion people going at lot is to still IT. me, you a go X% to to growing Or telling still that

be than IT. I we are think to So, spending people going take suspect is that still enterprise transition this going longer to

cloud it's that to not going I people is to shift cloud, the reevaluate margin, the Now, to number two to we the going talked and Prisma can buy get one, why to sure can the of make want instances get cloud-delivered so they're in to may one They it firewalls, making what to just what it want because cloud a as transition, they shifting do buy VM, are hardware people that's want that large make they retail the me don't to architecture the Access. things, that as allows they be cloud. about, and doing I'm smaller

years, question the three case, cloud. the expect So happen seven to the data transition and of we cloud then lot the to a that So you this use in use satisfy the next is, case Do use towards new architecture transition products to have the cases? center it. five the

aligned So we why product think transition. is that's this strategy towards the

depending on customer-specific ready on are. basis. happen It going We will industry will shift to It a how think happen. a happen is that basis they

think is for around people still elaborate moving firewalling the But data on for a who on we while us but colleagues product the... I'll let in shows centers. are the investing So parts, my

Sure.

get the of use different more the and are sites, the cases deployed deployed attractive So datacenter, perspective, some deployed they regional shift they gateways, in get at those places, in form factor. product get -- a from to lots of firewalls the headquarter branch offices,

want sort you to software different that. for of understand public of applications to why be lots that are form cloud, do example, for moving mostly So, reasons would straightforward technical the toward factor to

them can't you to a and shift into ask your Amazon deploy device to account. AWS hardware example, For

You have factors. form use software to

and the still able accomplish. the a that a what outcome, Prisma shift, they both of in As last there are we in about we good is very well has need in for believe infrastructure investment offices, Access of to is is as we lot retail, driving talked continue to branch want enterprise mobile a over shift be be that as to as terms Nikesh investment years, that But -- the customer users, will there this saying, to there be was protected. seven-plus infrastructure with

regional the be central in sites there larger sites, particularly to world So, lot hybrid deployed that time, will long still the and a hardware be need be for a of datacenters will meaning will against that.

still we headquarters about really with a want like and internal but larger XX talk growing, I that it to a hardware the lot role performance mentioned, think some things lot to core today, important, devices would XXX is, cases. become a IoT large thing of one And datacenters, of be in play a very just starts segment of in that places the If is gig, you hardware you or didn't important to has use of which those do about that, those segmentation very do connectivity of right? gig important

right. All

end has at think worked to achieve the and who we've opportunity X,XXX years been around next are to to for hard an who working management results and here, far. outlined. hopefully use so that achieve session. and beyond, the you three to I to journey employees of keep say the our I world with thank we'll the also part to deliver my targets team deliver to able that want the to the to here want getting the we'll call Q&A I the we shout targets us hard

of With some that, you to instead case it's some in cocktails products. downstairs and demos, geek to you want out in -- pleasure invite my for some the