Nikesh Arora: I think, Matt, that’s a fair question in addition to what Dipak said. There have customers who come back and said, look, the currency has moved a lot. Our price has gone up in the last 2 weeks and what can we do about it? In that case, it becomes a conversation. In some cases, we had to adjust prices. But at the same time, like you said, some of them get absorbed by the channel, some of them will get absorbed by the customer, some get absorbed by us.
Clay Bilby: Our last question for the evening will be from Gray Powell of BTIG.
Gray Powell: Congratulations on the strong results. So yes, the NGS ARR really stood out to me. Within that, can you just sort of — can you remind us on the economics of settling SASE to that of the traditional firewall? Is there any sort of like 1-year trade-off? Or just like how should we think about that playing out as SASE becomes a bigger piece of the mix?
Nikesh Arora: I think it’s kind of interesting, all of our SASE deals, I think like-for-like are much larger than our firewalls deals even with the same customer. And they can range from 2x to 3x, and sometimes even up to 5x, depending on the comprehensiveness of the requirement and the customers’ desire to deploy. So we have lots and lots of 8-figure deals out there that are being competed for in the SASE space. And I think there’s 2 vendors fighting for those deals. We were not a player, as you know, 2.5 years ago in that space. Now we’re almost in every one of the large deals out there head-to-head. So either the deal gets won or lost, but we’re in every one of them, and they’re typically large sizes. And the economics are better than the security posture is better for the customer, because imagine, if I sell 500 firewalls, it takes customers a serious amount of time to go deploy them, and every time I give a software upgrade to customers to go drive a truck and upgrade all those firewalls because they want to sandbox the upgrade, which leaves them exposed from a security perspective.
And SASE, I can — I actually — we actually do the upgrades, and we can get the entire customer base upgrade in this matter two weeks. In some cases, we just announced 11.0, and we still have a lot of customers who have not upgraded to 10.2, right? So this does improve the security posture, improves the total cost of ownership. And that shows up in a larger deal size because we’re shifting costs from the customer to having to be software managed by us and our partners. So look, the economics of SASE are phenomenal from a deal size perspective as well as from — they’re pretty consistent from a margin perspective. So I think there’s still, as I’ve said in the past, is an $8 billion to $10 billion SASE market out there, and that space is growing in double digits as an opportunity.
Clay Bilby: All right. And with that, we’ll conclude the Q&A portion of our call, and I’ll turn it back over to Nikesh for his closing remarks.
Nikesh Arora: Thank you, Clay. Thank you, everyone, again, for joining us. We look forward to seeing many of you at upcoming investor events. I also want to thank our customers, partners and employees around the world for helping us deliver these great results in such a tough environment. With that, have a great day.
