Michael Turits: Congrats on solid quarter in a tough environment. Last quarter, Nikesh, I believe that when you talked about your billings guide, you also commented that you could achieve that billings guide with no reduction in product backlog. Is that — maybe you could talk a little bit, if you could, about backlog in any way to the extent you can in terms of what happened with it this quarter, up, down, flat? And whether you still assume backlog, product backlog, I think, is what you said, flat into the end of the year in order to make the numbers that you’ve got.
Nikesh Arora: Michael, we don’t comment on backlog. As I have said and as Dipak has said, because of supply chain constraints having eased a bit, we have been able to ship product to our customers much faster, which has a positive impact on attached services that we’re able to ship them. But remember, our billings grew at 27%. And as we’ve said in the past, backlog in the overall scheme of things is not as substantial as you might think.
Michael Turits: Okay. So no change to that comment from last quarter about holding backlog to make the billings number?
Nikesh Arora: No. We don’t hold backlog to make billings numbers. We try and ship our products to our customers as soon as we can to ensure that they get their products as quickly as they would like. And we report the quarter based on what we’ve been able to ship.
Clay Bilby: Next to Jonathan Ho, William Blair, with Roger Boyd to follow.
Peter Auty: Great. Let me echo my congratulations as well. And happy birthday, Lee. Can you talk a little bit about the XSIAM traction that you’re seeing? And maybe help us understand what this means from an upsell potential standpoint when customers start to move in this direction?
Nikesh Arora: Jonathan, that’s a great question, because I’ll tell you what, I was positively surprised by the reaction of customers wanting to engage in an XSIAM conversation, both directly, as well as many of the system integration partners who are there. So clearly, there seems to be a pent-up desire to reimagine their so. People are relying on old data ingestion platforms. People are lying on old alert-based optimization and prioritization things. And they all understand that it’s physically and humanly impossible to intercept cyber threats by doing it manually. And that seems to be a common realization. Yet, none of them actually had a solution base presented to them for a long period of time. So what we thought we were doing design partners, we signed up 8,9 design partners.
Guess what? In 3 months, all of them say, we don’t want to be a design partner, we’d like to start using the product on a commercial basis. So we accelerated our general availability of the product because we had to make sure it’s available for those 9 customers, and all of them turn to customers. Now our sales teams are trying — are aggressively trying to go out there and pitch it, and we actually have to maintain a wait list to make sure we won’t need implementation resources to be able to implement. This is a lift. You’re ripping out a data ingestion lake, you’re ripping out their existing SIM, yet they have to keep running their SoC in a way that we can transform that. So we’re working with GSIs. We’re working with third-party partners for them to build the capabilities so you can get this done with a variety of customers.
I’ve said this before and I still maintain this. Four years ago, when we embarked on this journey, we decided we’re going to build a cloud security business, we’re going to build a Cortex business, we’re going to build a SASE business. As I said, all 3 businesses are on track to be $1 billion businesses. I think XSIAM has a similar potential in a similar time frame to be our fourth business that’s going to be in the same category.
Clay Bilby: Is Roger Boyd of UBS, with John Deputy to follow.
