Tomer Weingarten: I think at our scale, I mean, we’re not at a point that we’re ready to disclose that. I think we’re giving you good indications as to what part of our portfolio is going. We’re giving you an indication that more than 30% of our revenue contribution is coming from outside of endpoint. We’re giving an indication we gave last quarter that cloud is growing incredibly fast, triple-digit year-over-year represents well over 20% of quarterly ACVs on average, if you kind of look at the rearview mirror in the last 12 months. So all in all, I think that can give you some sense. I also think that for us, data analytics and security data lake, the Singularity data lake, these capabilities are just coming online. And they’re coming online pretty fast.
So hopefully, as we gain a little bit more scale, I think we’ll be able to disclose much more on how we look at our business. But right now, obviously, we’re just focused on growing as fast as we can between these core TAMs that we identified are strategic to our growth.
Operator: Our next question is from Andrew Nowinski with Wells Fargo. Your line is now open.
Andrew Nowinski: Great. Thank you and congrats on the nice quarter, nice rebound. So I wanted to ask about net new ARR, maybe particularly the guidance for Q3. I understand the year-over-year decline in Q2, given the tough comp you had from last year. But if you think about all the positive trends you guys described here today, why wouldn’t you expect maybe more growth out of net new ARR in Q3 given that the macro really hasn’t changed. It hasn’t gotten worse or better, I guess what I mean.
David Bernhardt: Sure. We just exceeded our Q2 net new ARR expectation by double digits. We raised our Q3 net new ARR outlook, and we raised the full ARR growth to the high 30s. So I think the way to think about it is we’re just being thoughtful about macro stabilization, which is still evolving. And I think we just believe that being prudent is the right approach in our view.
Operator: Our next question is from Gabriela Borges with Goldman Sachs. Your line is now open.
Gabriela Borges: Good afternoon. Thank you. Tomer, I wanted to ask a question on some of the feedback you’re getting from customers that are trying the new Purple product. What are the one or two asks that are coming out of those trials in terms of the next one or two features that customers want in the product? And how are you thinking about the pricing model over the medium term? Thank you.
Tomer Weingarten: Yes. The first question is always what’s the pricing. I think that’s consistently what we’re getting from them. And we’re starting to share and I you know, most actually would say we’re testing pricing with these customers. So I don’t have kind of a flushed out pricing model to give you just yet. But it’s definitely something that we’re kind of processing right now. I think in terms of their request, and that is key is that we continue and push purple to be an overarching enterprise-wide algorithm versus being focused just on endpoint data or just on cloud data and that once again comes back to the level of differentiation that you see with our platform today. When you think about some of these AI capabilities, when you think about the scale you can achieve with AI, you obviously want to start stitching together all these disparate products, all these siloed ecosystem vendors into one cohesive fabric that can also allow you to, in some cases, consolidate the waste of these products.
But in some other cases, these products are still going to be there, but you want to make sure that something more intelligent is driving them and that you can orchestrate action. So people want us to do it on an enterprise scale, people want us to do it in a highly autonomous manner and in a highly actionable manner. They don’t want more suggestions. They don’t want more chatbots, they want predictive algorithms that can allow them in real time to react to what they’re seeing enterprise-wide. And I think that’s exactly how we’re developing purple. That’s exactly the first iteration of this product. And all in all, it looks just very promising.
Operator: Our next question is from Shaul Eyal with TD Cowen. Your line is now open.
Shaul Eyal: Thank you. Good afternoon, guys. Good to see the bounce back. Dave, a question for you. Can you discuss gross margins the improvement actually vis-a-vis what do you see in terms of ASP pressures?
David Bernhardt: Yes. Obviously, there’s not ASP pressures or we wouldn’t be setting record gross margins. So I guess I’ll start with that. We had record gross margin this quarter of 77%. I think that’s a benefit of our increasing scale, the data processing efficiencies and the module cross-sell, which we also expect will continue over time. So I think we’re proud of the gain we’ve had in gross margin and just don’t seem to be seeing the ASP issues that other competitors may be seeing.
Operator: Our next question is from Patrick Colville with Scotiabank. Your line is now open.
Patrick Colville: Alright. Thank you so much for taking my question. So I mean this quarter, the operating margin improvement was really impressive. In my model. So you beat this quarter, you listed fiscal ’20 margin by 2 points, but that means in my model, if I’m counting it correctly, but my actual 4Q number comes down to operating margin. So like why would that be? It’s probably one question. And then how should we think about your kind of like long-term guidance for fiscal and your goal to reach operating margin profitability next year?
David Bernhardt: So we raised our full-year EBIT margin, like you said, by 2 points at the midpoint. It’s the better end of our annual guidance. Now we’ve focused on that instead of 25% to 29% loss, we’re focused on the 25%. We believe that’s meaningful. We’re on track for 25 points or about 25 points of operating margin improvement this year. I think one of the things we’re seeing coming off a strong Q2 is also should we be investing into some things where we’re seeing benefits. So our second-half is expecting some of that. We’re able to do all of that and improve the guidance for the year to the better end of anything we were expecting for the year at the start. So we’re proud of this guidance. We’re always going to balance our investments in growth with our commitment to achieving profitability. And our goal remains unchanged for next year, but we’ll be guiding that in the future.
Operator: Our next question is from Adam Tindle with Raymond James. Your line is now open.
Adam Tindle: Okay, thanks. Hope to get a two-parter in, Dave. First, a clarification. On NRR with the Attivo piece, is there any way that you could potentially help us quantify so that we could strip that piece out. I’m just curious what the underlying trends would have looked like for the health of the business ex that? And then Tomer, as a follow-up, I know we kind of touched on the Wiz subject. But curious, cloud security is obviously one of your fastest-growing areas, it sounds like you’re still committed to that partnership. But honestly, why. That piece of the business is growing so rapidly. You’ve got a broad platform. Where do they fit in? What do you — honestly, what do you need them for. Thanks.
David Bernhardt: I’ll start. Our NRR on an organic basis would have been 120%. So it’s still at the expectations that we’ve set forth in prior earnings calls. So the 5% decrement was purely Attivo. I’ll let Tomer answer the other question.
Tomer Weingarten: Yes. One way I thought — I kind of said it, it’s really what the customer wants. And obviously, they got a nice set of customers kind of in the Fortune 100. We want to make sure that we support them. Some of them are our customers, too. We want to make sure we deliver the best experience. So when a customer wants to use Wiz by all means, and we will be there to support it. When a customer wants something more realistic, obviously, we will serve our own. I think there’s also a big difference between what they can serve, which is highly limited to public cloud, where if you look at our platform and our workload protection, we cater to folks from on-prem environments and server and workload environments that might be on-premise all the way to private cloud and then to public cloud.
