Keith Jensen : I don’t know, Ken, if you want to talk about longer-term trends in the industry and now avoid [ph] guides for 2024, if you do that.
Ken Xie: Look back to like a — certainly, yes, with the industry, network security still have a pretty good pace of growth, probably between 10% to 20% on average in the last like 30 years. And we feel we have a very unique, huge advantage solution, which we — we only want to build our own ASIC. You can see the product we announced today, which has probably averaged about 10x better performance, more function compared to competitive solution and also much less energy consumption, probably like a 90% less energy consumption. So that’s where the new SP5 actually — the first product announced actually is that we have a 14 application engine integrated the ASIC chip, probably more than double compared to the previous version.
That’s also helping drive the next few quarter growth, which each — probably every quarter, we may plan to announce a new product, you can see 5. That’s a huge advantage and then it also drives the long-term convergence of networking to network security, which can agreed by 2030, the network security will be larger than the traditional network in there. So that’s what continue to network security side growth. On the other side, we also mentioned a few other areas. We see kind of the non-FortiGate part also growing pretty strong, so 45%. It’s part of it because consolidation, part of because certain like security budget allocation to certain cloud spending can be allocated to some security. And the other part also, kind of like how to manage on different kind of vertical and also some inventory side.
That’s also we try to balance. We do believe things will be recovered in the later part of next year. And because — the last two years, we see quite a strong product revenue growth, second quarter over 50%, which is not quite normal. But it’s — once we get more normal, so that will be pretty much return to the average in the last 20-30 years, which is about 10% to 20%.
Keith Jensen : Yeah. And as I kind of take that commentary and pull it forward a little bit and say, Q3 and Q4, and I suspect I’ll get a fair amount of chance — opportunities to talk about the guidance setting process for Q3 and Q4. I guess I would start off by saying we’ve certainly seen over the last two or three years in various environments we’ve been in. You got to be pretty nimble in terms of your assumptions and what you’re looking for. And with that in mind, I think I called out in the comments, you see the level of deals that pushed in the second part of June. It was a new development. We always have linearity of the deals closed to see the deals push. And I think 1 comment I would offer is that as you look — as I look to the Q3 guidance setting and the roll-up, the assumptions for Q3 were to close rates and terms and things of that nature and push.
I would say, look a lot more like the assumptions that we saw in actual results for Q2 than maybe what we saw with some higher rates, better rates earlier on. So I think there’s some caution built into that, if you will. I think also if you kind of look at the results, where the guidance ends up, you can look at top line growth in Q3 versus Q2 that I think is in the low-single digit growth sequentially. And that’s pretty much in the range of where we’ve seen Q2 to Q3 historically, and we would expect that again. And then maybe just a little more caution in the fourth quarter where — and again, I made a comment earlier that the seasonality assumption that falls out of the guidance for the full year and is applied to the fourth quarter actually suggests a lower level of growth in the fourth quarter than we’ve seen in other periods.
Offering a certain degree of caution, number one, but also acknowledging that Q4 last year was a very strong quarter and pretty tough compare.
Ken Xie : Also, we do see some strong growth in the new area like SD-WAN OT, which grew 40% and 60%, total come on 25% of billings. And also the 5G growth not quite start yet, so we all have the best product for all these new solutions. So that’s the additional growth, right, as we’re keeping developing.
Gabriela Borges : That all makes sense. Thank you. And just to clarify, is it safe to assume that 4Q, or are you assuming that 4Q billings will be the trough for billings growth?
Keith Jensen: Yeah. I’d have to go back and look at the actual compares because the compares start easy and I don’t want to mix up bookings and billings in this conversation because the timing is a little bit different. But I think that the growth in billings in Q4 and Q1 of — Q4 of last year and Q1 of this year were very, very strong.
Ken Xie : Also, you can refer to the finance presentation #10 page, which we go back to 13 years since we IPO-ed 13 years ago. So there’s some kind of a growth, some kind of margin information.
Gabriela Borges : Yeah, I do like that Slide 10. Thank you for calling that out. Okay, thank you.
Ken Xie : Thank you.
Operator: Thank you, very much. Our next question will come from Tal Liani with Bank of America. Your line is open.
