There is no change in our revenue forecasts.
Saket Kalia: Got it, very helpful. Thank you.
Walter Pritchard: Thanks, Saket. Next up is going to be Hamza Fodderwala from Morgan Stanley. Followed by Brian Essex from JPMorgan. Hamza go ahead.
Hamza Fodderwala: Hi, good evening. Thank you for taking my question. I just wanted to start by offering my thoughts and condolences to all your employees in Israel. You know, it’s kind of similar vein to Saket’s question, I mean, 16% billings growth is certainly not bad in the context of many of your peers growing single-digits, if at all. I’m just curious because your guidance is still assuming that growth will sustain for the full year. So what’s giving you that confidence given the cost of money, given the hardware digestion that you can sustain that the high-teens billings growth given what you’re seeing in the market?
Nikesh Arora: So, Hamza, as, you know, Saket mentioned about pipeline, we have visibility to our pipeline, so we know there is business out there. We have not seen customers walk away from deals in Q1. It’s not like people don’t want to do business. We’ve been very consistent on hardware and hardware expectations for the last 12 months. We are regaining our consistent and expectations on hardware. We don’t expect any lumpy movements up or down. We expect this is going to steadily in the 0% to 5% range as we’ve always been talking about. So I think from that perspective, I think to use Saket’s word, we feel reasonably derisked on what’s out there in the future. Q1 is the first quarter, allows us, you know, we have lots of pipeline, we have visibility to.
I think I want to reiterate again, we are retaining flexibility. Can I go financing? Of course, I can. Can I go finance a three-year deal through PANFS or $7 billion of cash? I can, which will have a cosmetic impact of giving you better billings. But what I don’t want to do is finance bad deals. This allows me the flexibility of not having to finance them nothing changes, I still get my revenue for the year. I still get my CRPO. I still get my annual billings. I just don’t get year two and year three billings, but changes my total billings forecast for the year. It’s cosmetic, it’s mathematics, but it’s interesting to see how the street interprets it.
Hamza Fodderwala: Thank you.
Walter Pritchard: Thank you, Hamza. Next up we have Brian Essex from JPMorgan, followed by Gabriela Borges from Goldman Sachs. Brian, go ahead, please. You’re muted, Brian.
Brian Essex: Thanks, Walter. Yes, thank you for taking the question. Nikesh, I was maybe wondering if I could dig in on M&A a little bit, pretty meaningful volume of M&A from a dollar spent perspective this quarter after not having done some for a while, how would you describe the overall environment and how would you, I guess message to investors the level of M&A that you might do over the next, I don’t know, couple of years? Is this more of a one-off IP and aqua hire that you saw a great opportunity to pick up or might there be something meaningful in terms of longer-term trend or even dollars put through your sales pipeline as you scale this over your platform or scale both of them over your platform?
Nikesh Arora: So, Brian, thanks for the question. Look, we have not changed our point-of-view. We have always maintained that we’re going to sustain M&A at a level close to a billion here. So we haven’t done one for a while or two. And if you see, if you split the two, we did a cloud security one, and we’ve been pretty consistent in that rough range in the $150 million to $250 million range in terms of adding cloud capability as we see the market evolves, so I think that’s kind of consistent, where we are. We saw a unique opportunity, as I mentioned, 36% of workers are independent workers, they don’t get SASE remote access solution. We saw more and more discussion in the market, where RBI was not covering every use-case and managed devices were not, all your mobile phones don’t have management for security.
Last few hacks that happened to mobile devices. So from that perspective customers asking, what is my solution, and now, what we didn’t want to do is to have to deploy yet another independent solution, which is just disconnected from our overall SASE capability. And like we do, we will always pay attention to the market. We figured Talon had the best tech in the space and they were just about to go race to go to the go-to-market sort of implosion or explosion with other companies. So – and from that perspective, we saw an opportunity and we think it’s a great fit. Actually, it makes us the most comprehensive SASE solution. We are going to integrate them deeply into our SASE solution. Our customers will be able to use Enterprise Browser RBI or our Prisma Access client, so it’s – I don’t want to call it a one-off, one-off sounds it will never happen again, but I think it’s just happens to be the time where we did two at the same time, other than to different platforms, two different teams are integrating them, so it’s not overhead to the organization.
But we’re going to keep our cautious approach towards meeting what we can digest. So you shouldn’t expect anything that is off the regular pattern we’ve sort of shown it last time.
Brian Essex: Got it, helpful. Thank you.
Walter Pritchard: Great, thank you, Brian. Next question is going to be from Gabriela Borges of Goldman Sachs, with Roger Boyd at UBS on-deck. Go ahead, Gabriela.
Gabriela Borges: Good afternoon. Thank you. I want to ask about the two dynamics that you’re talking about in your business, the firewall cycle on the one hand and cost of money impacting billings duration on the other. How do you think about the potential that these two dynamics are actually connected, meaning product mix is also having an impact on billings duration and how do you think about the risk that cost of money dynamics get worse before they get better, thereby impacting the full-year guide of billings, again as we go through the year? Thank you.
