Thank you for standing by, and welcome to Zscaler's Third Quarter Fiscal Year 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. To remove yourself from the queue, you may press star 11 again. I would now like to hand the call over to Ashwin Kesireddy, Vice President, Investor Relations and Strategic Finance. Please go ahead.

Good afternoon, everyone, and welcome to the Zscaler Third Quarter Fiscal Year 2025 Earnings Conference Call. On the call with me today are Jay Chaudhry, Chairman and CEO, and Remo Canessa, CFO. Please note we have posted our earnings release and a supplemental financial schedule to our investor relations website. Unless otherwise noted, all numbers we talk about today will be on an adjusted non-GAAP basis. You will find the reconciliation of GAAP to the non-GAAP financial measures in our earnings release. I'd like to remind you that today's discussion will contain forward-looking statements, including, but not limited to, the company's anticipated future revenue, annual recurring revenue, calculated billings, operating performance, gross margin, operating expenses, operating income, net income, free cash flow, dollar-based net retention rate, future hiring decisions, remaining performance obligations, income taxes, earnings per share, our objectives and outlook, our customer response to our products, and our market share and market opportunity. These statements and other comments are not guarantees of future performance but rather are subject to risk and uncertainty, some of which are beyond our control. These forward-looking statements apply as of today, and you should not rely on them as representing our views in the future. We undertake no obligation to update these statements after this call. For a more complete discussion of the risks and uncertainties, please see our filings with the SEC, as well as in today's earnings release. I also want to inform you that we'll be attending the following conferences: Bank of America Global Technology Conference on June 5, FBN Virtual Technology Conference on June 6, and BMO Virtual Software Conference on June 9. Now I'll turn the call over to Jay.

Thank you, Ashwin. Our strong Q3 results demonstrate growing demand for our platform and continued improvement in our sales productivity. More customers are adopting Zscaler's comprehensive solutions with platform-wide deals for our zero trust security. Driven by the strong demand, we achieved two significant milestones. First, we achieved our best Q3 with TCV bookings of over $1 billion. And second, our remaining performance obligations, or RPO, are now nearly $5 billion. New logo ACV had strong growth of over 40% year over year. Total new ACV was up double digits year over year once again in the quarter. Our annual recurring revenue, or ARR, was approximately $2.9 billion, representing the third straight quarter of 23% year-over-year growth. We remain on track to reach $3 billion or more in ARR by the end of this quarter. We are proud of achieving these strong top-line results at scale while delivering strong profitability. Our year-to-date fiscal 2025 revenue growth of 24% combined with our free cash flow margin of 28% resulting in rule of 52 performance. While many SaaS companies struggle to achieve rule of 40 performance, we have exceeded this industry benchmark for each of the last 21 quarters. Moving on to discussion of our platform, I am very pleased to share that our platform now secures over 50 million users, another significant milestone. This milestone gives us several competitive advantages. First, more users deliver a powerful network effect and strengthen our market. Zscaler's Zero Trust Exchange platform sits in line for enterprise communications. Every time we secure a user from a new attack, we apply that protection for all users of our platform, creating a flywheel for improving security. The magnitude of this effect is staggering. Last year alone, our exchange processed over 100 trillion transactions, blocked over 60 billion threats,…

Thank you, Jay. Our Q3 results exceeded our guidance on growth and profitability, even with ongoing customer scrutiny of large deals. Revenue was $678 million, up 23% year over year and up 5% sequentially. From a geographic perspective, Americas represented 54% of revenue, EMEA was 30%, and APJ was 16%. Our annual recurring revenue, or ARR, exiting Q3 was approximately $2.9 billion. ARR growth was approximately 23% year over year. Remaining performance obligations, or RPO, grew 30% from a year ago to $4.978 billion. Current RPO was approximately 48% of the total RPO. Total calculated billings grew 25% year over year to $785 million. Our unscheduled billings comprised of new upsell and renewal billings grew in the high 20% year over year, driven by increasing customer demand for our platform. Our calculated current billings grew 24% year over year. We ended Q3 with 642 customers with over $1 million in ARR and 3,363 customers with over $100,000 in ARR. This continued strong growth of large customers speaks to the strategic role we play in our customers' digital transformation journeys. Our twelve-month trailing dollar-based net retention rate was 114%. While good for our business, our increased success in selling bigger bundles, selling multiple pillars from the start, and faster upsells within a year can reduce our dollar-based net retention rate in the future. There could be variability in this metric on a quarterly basis due to the factors I just mentioned. Turning to the rest of our Q3 financial performance, total gross margin of 80.3% compares to 81.4% in the year-ago quarter. Our total operating expenses increased 5% sequentially and 21% year over year to $397 million. Operating margin of approximately 22% was comparable year over year. Our free cash flow margin was 18%, including data center CapEx at 11% of…

Before moving on to Q&A, I am happy to share the appointment of Kevin Rubin as our new Chief Financial Officer. Remo will remain in an advisory capacity until the end of this fiscal year to ensure a smooth transition. I'm very excited to have someone with Kevin's strong background and experience join Zscaler. Kevin has over two decades of experience as a CFO of multiple technology companies. I firmly believe his recent eight-year tenure as a CFO of a data analytics company will be crucial to Zscaler in our next phase of growth, which will be driven in large part by the combination of Zero Trust and AI security. I'm thrilled to have Kevin on board, and our leadership team and I look forward to working with him. Kevin, welcome to Zscaler.

Thank you, Jay. I'm incredibly excited to be joining Zscaler, the leader in cloud security. I believe with its expanding platform, Zscaler is well-positioned to benefit in an increasingly AI-driven enterprise security market. With my background in data analytics, I am strongly aligned with Jay's vision of leveraging the high volume, high fidelity data of Zscaler's platform to deliver pioneering security innovations for the age of AI. I look forward to being part of our growth to $5 billion in ARR and beyond, and I look forward to working with our customers, partners, employees, investors, and analysts. Jay, back to you.

Thank you, Kevin. Operator, you may now open the call for questions.

Thank you. As a reminder, to ask a question, you will need to press 11 on your telephone. To allow everyone the opportunity to participate, and in the interest of time, you will be limited to one question. Please stand by while we compile the Q&A roster. Our first question comes from the line of Ittai Kidron of Oppenheimer and Company. Please go ahead, Ittai.

Thanks, and nice results, guys, and Remo, thank you. And, Kevin, good luck. Great to connect with you again for the third time. So congrats and good luck to you on that. Jay, a lot of great interesting things happening. So great to see a lot of good momentum here with product and customers. I guess I wanted to get your perspective on Salesforce focus. And what I mean by that is you have a portfolio that's expanding at warp speed. You have a new purchasing mechanism through Z Flex. How do you get people, how do you get customers focused, how do you get salespeople focused, and make sure that things stay on track? And more specifically with regards to Z Flex, which is clearly a program that should do well for you. It's done well for many others. Help me think about the scope of usage of this. Is this going to be available to everybody? What is the bottleneck in making this available to everybody tomorrow? Yeah. It's fine. Thank you.

Great set of questions. So first of all, expanding platform at a rapid pace creates an interesting challenge or opportunity for the sales team. We have been working on it for the last three, four years. As you know, we started the notion of take-off teams for newer product areas. For example, data protection has a take-off team for quite some time. And with the acquisition of Red Canary, we're requiring actually a seasoned go-to team that knows how to sell SOC solutions. And this essentially can act as our second specialist team that works closely with a larger Zscaler go-to-market engine. So we are really using a two-tier model. A broad sales team is covering all products, and they are account-centric, account-focused. And then some of the takeoff teams are more experts in some of these new product areas. So they can cover the products of interest to them. So having done it for the last few years, we're pretty comfortable and we know how to scale it. Second question about Z Flex. It evolved out of the questions our customers have been asking for. As the platform has gotten bigger and bigger, multiple choices, many times, they wanted the flexibility to try some modules. They wanted to be able to swap one with the other. So this is the kind of flexibility we're giving them. And it's also pre-agreed upon pricing. So they don't have to go through a procurement cycle every time they want a new product. Now this is a relatively new program. As we mentioned, we got a great start. In the first quarter itself, in Q3, we had $65 million plus in TCV booking for this program. But we will start with larger customers, then expand to the next level. There's nothing holding it back, but we like to be prudent, test things, learn it, and expand from there.

Thank you. Our next question comes from the line of Mike Cikos of Needham. Please go ahead, Mike.

Great. Thanks for taking the questions, and congrats on the announcement to Kevin. And Remo to you as well. Wanted to cycle back. It really sounds like macro trends you saw in April and May were a relative non-event versus some of the more mixed data points you've got for companies that are on a fiscal quarter end. Can you just tackle that a little bit more from the macro side of the house? What are you guys seeing as far as increased scrutiny or increased hesitation versus is it a relative non-event just given the momentum that you guys have from a product and go-to-market side? Thank you.

I'll start, then Remo can add on. We did not see a softer April. This may be because we are not in the business of selling security appliances. Overall, the spending environment remains challenging. Macro is still tight, and we continue to see large deals group. Our budgets are tight in general for IT, but for cyber, it's a little easier because cyber is a bigger priority. And even in cyber, the two areas that are high priority for our customers are Zero Trust Architecture and securing the use of AI. If your project involves one of these two security offerings, and you can actually do some cost savings, the deal can get done. We are able to do all these things together. That's why it has been a good quarter for us. Overall, we have been working closely with our customers to reduce their cost and become a strategic partner. And this ends up translating into ARR over time. I can tell you this week alone, the three customers who talked to me and they said, oh, Jay, I'm becoming a third-time customer for you. That's relationships. That's what they're proud of. Remo?

Not much to add, Jay, other than, you know, to call out our sales organization. You know, Mike Rich has been on board now for about a year and a half and has really built a strong sales organization really to go after the large enterprise. You know, as you remember, you know, Mike came from ServiceNow. We are emulating ourselves towards the ServiceNow model, where we're trying to get deeper into accounts and the strategic large accounts. I think that's a call out to our go-to-market organization as well as our sales organization.

Thank you. Our next question comes from the line of Brad Zelnick of Deutsche Bank. Your question, please, Brad.

Great. Thanks so much, and I echo my congrats all around. I mean, these are really refreshing results and on everybody's new appointments. And, Remo, it's been a pleasure. I wanted to circle back to Z Flex because it really speaks to the strategic platform-style relationship customers want to have with you. But from your perspective, Remo, can you walk us through how are these structured? What's the typical duration? In the accounting of these deals? And do you maybe foresee a future where billings might no longer be the right metric to measure Zscaler's momentum and success? Thank you.

Yeah, I'll take the first part. Which is billing is going to be the right metric and let Jay answer the rest. We've talked about it. We're gonna go to ARR in fiscal 2026. So you're gonna see a change from billing to ARR. I think that's a really big, you know, for Zscaler because it gives us the opportunity really to sell more, deeper, and more products and really work with our customers related to when they can adopt our products. So I believe going to an ARR metric is the right metric going forward. And I think the Z Flex program gives us a lot of flexibility to, you know, continue to sell across our entire platform.

Sure. So the Z Flex program came out of our customer's desire to buy more but not having to go through negotiations and procurement every time. For example, take data protection. There are eight plus modules in this single product line itself. And many times, the customer says, here are three or four things I'm interested in, but I'm not sure. I'm ready to buy all four. Or I'm not sure I can deploy all four if I bought them right now. So being able to give them flexibility to try and test and they can swap one versus the other. So ability to swap, ability to add some more, at a predetermined pricing, without having to go through procurement cycles, are some of the main benefits they're getting. So as these things are being done, they're being done because the customer views us as more strategic. And the duration of the contracts is moving. We used to do most of the deals three years, we're seeing more and more deals becoming four years and five years.

Thank you. Our next question comes from the line of Saket Kalia of Barclays. Please go ahead, Saket.

Okay. Great. Hey, guys. Thanks for taking my question here. And echo my congrats to Kevin and Remo on your next steps. Jay, maybe for you, was wondering if you could just dig into Red Canary a little bit more and maybe more specifically, whether you sort of view this as an extension of Zero Trust that accelerates that path to $5 billion in ARR or whether this is something that adds to that and broadens the platform.

Yeah. So when I talk to customers often, I tell them from day one, we get one North Star. Zero trust architecture. Which expanded from users, partners, suppliers, to workflows, to branches, and everything. And as we did more and more, the customers would often talk to me and say, Jay, this is wonderful and you got the most logs I have. And then I have to feed these logs with third-party solutions. Pay them again for storing them. And doing some stuff with them. Shouldn't you naturally expand in that space? And provide me a close feedback so things discovered in your security operation solutions can be fed back to Zscaler Zero Trust Exchange. Those are the discussions over the past several years that took us to move in the direction. The first foundational step we took in this direction was last year when we acquired Avalok. Avalar basically brought the notion that you no longer need to build a map data lake and pay for it. You should have data fabric. Which synthesizes the logs and creates a subset of meaningful information that has context and identity and entity relationships. So now Red Canary brings a number of interesting things for us to move in that direction at a faster pace so we can accelerate our vision of becoming a leading player. They have highly talented and experienced detect and tech intel engineers. That's very important. Two, to my surprise, they had developed a very sophisticated agentic AI technology for reasoning and workflow. And this is being used today. It's not future. They're using it. To support a large number of customers. Now I can take their agentic technology, compare it, combine it with the Zscaler data fabric, things accelerated by many, many months for us. And they also have a good sales team that can help us acting as a kickoff team for Zscaler. So these two things together, they accelerate our overall growth, but it is an expansion of the platform for us. Remo, you want to add?

Yeah. I mean, just some financial information on the transaction. It is valued at $675 million plus equity for employees. As Jay mentioned, we expect it to close in August of 2025, and we expect it also to be largely neutral to our FY '26 consensus operating margin. A big portion of Red Canary's ARR is concentrated in certain segments that are not strategic to us. So through the post-close integration process, we expect to retain approximately half of the $140 million ARR you may have seen. We will share more details on this on the next call in our Q4 call.

Thank you. Our next question comes from the line of Shrenik Kothari of Baird. Please go ahead, Shrenik.

Hey. Thanks for taking my question. Again, congrats on great execution. Looking forward to working with you, Kevin. So in terms of the Z Flex, definitely looks like that's helping broader adoption of multiple deals. As you said, Jay, with the emerging product categories growing 5%. You also cited Gen AI as a key demand driver. Can you tell us a little bit about what kinds of attach rates are you seeing there? And if it's driven by flex, any sense of percentage of sort of wins which explicitly citing this Gen AI-related risk Copilot charge you with as the buying catalyst. Appreciate it.

Yes. So Gen AI is becoming more and more important to our customers. And our solutions are in three areas. First has been securing the use of public AI. We have been actually offering that solution for quite some time now. And even Microsoft 365 Copilot security is part of that. And this is the first area. We are bundling that solution along with our advanced data protection module because the number one use of this is to protect the data. Secondly, securing the use of private AI models and applications our customers are building. Here, we have been building an LLM proxy. Can analyze prompt queries and detect any bad things like prompt injections and the rest of the stuff, and it can also inspect responses. So that's the second area. The third area is agentic operations. In IT operations categories and security operations category. And this area, we started building a couple of years ago. You saw our Risk 360 area. You saw our unified vulnerability management we acquired Avalar. And the Red Canary is going to help us accelerate that area as well. And they're using a bunch of agentic AI technology, which is very helpful. So we are seeing traction, and if you look at the numbers of growth, it's starting with small numbers. But it's pretty impressive growth so far.

Thank you. Our next question comes from the line of Roger Boyd of UBS. Your question, please, Roger.

Great. Thanks for taking the questions, and congrats to you both as well. Maybe, Jay, just on BranchConnector, I think the metric that continues to impress me is that you have nearly 60% of customers adopting BranchConnector over the past two quarters that are effectively new to Zscaler. What are your thoughts on what's going right there, the role that BranchConnector is playing in new wins, particularly as you continue to have success with some of these cost takeout ROI sales programs against maybe some legacy network equipment? Thanks.

Yeah. Our branch connector is now packaged as plug-and-play files, which actually is helping customers because they plug and play the things happen. And now we are also embedded or integrated our air gap technology to do zero trust segmentation for devices. The two together are doing very well. Frankly, the degree of interest the customers have taken in this area has exceeded my expectations. As you heard, I mean, 59% of customers have purchased Zero Trust branch. Are new logo customers. That's pretty impressive. And I think it's going to get better. I was talking to a customer recently, who was testing our branch appliance. And was looking for deploying it for about a hundred branches. And one step the testing went through he said, I should be doing for all 1,000 launches. This is pretty remarkable. Obviously, we need to keep on executing. But it just tells you the pain customers have. Having a bunch of firewall boxes, DHCP, and they have freelance and all this stuff. Our goal is to eliminate all of that stuff. A branch has nothing more than two things. Zscaler appliance and a switch. And, of course, some Wi-Fi stuff. So very, very excited about it.

Thank you. Our next question comes from the line of Tal Liani of Bank of America. Please go ahead, Tal.

How are you? Monday, they're gonna learn how to pronounce my name. So this we're entering the second half of the year with a schedule billing very high. And the question we always ask ourselves because of the new competition in SASE is how much of the growth is because of scheduled billing? And how much of the growth is because of new products that are beyond ZIA, ZPA? So the question is, can you break down the strength this quarter? And the reason why I'm asking it is because I see that the NRR that was high about a year and a half ago declined and then slightly recovered last quarter, went down again this quarter sequentially. So the question is, what were the trends in ZIA ZPA versus the trends in other products? Sorry for the long-winded question. And if you can give some kind of outlook, some discussion of the outlook of the new products and how you expect them to perform and contribute to revenues. Thanks.

That's a lot of questions. I'll try to go with a few, hopefully, can pick up where I missed. Q3 unscheduled billings was 28% growth year over year. So that is outstanding. Scheduled billings growth in Q3 came as expected. Was below 20% range. The unscheduled billings in Q4 and the guidance that we gave is 25% growth year over year. So, you know, the business is doing very well, and it's consistent with what we said at the beginning of the year when we called out scheduled versus unscheduled billings. It's pretty much worked up almost exactly what we said. So, yeah, we're really, you know, proud, you know, of how we communicated that to the street and how the performance is happening in the second half of the year. Related to the NRR rate, it is 114%, but that is outstanding. So from my perspective, you know, only look, we've said this before. We only look at it, you know, once every quarter. Right now, we're talking to our investor call. See, the key thing, I think, you know, is that you look at what we have and the platform that we created, and the expansion of the emerging products. You know, we've talked about that the emerging products, you know, is expanding. So we're expecting emerging products to, you know, be in the mid-twenty to high 20% range. Know, for this year. And the reason for that is that we're expanding the products. Those are all new products that come out. You know, DSPM, GenAI, you know, in the DLP products. So I think, you know, Jay called out, we're a technology company. We're an innovation company. I mean, we are at the size that we have a, you know, very large, you know, revenue and recurring revenue and RPO. But at the heart, Zscaler is a technology company that's at the forefront to continue to really, I think, exploit this market as no other company can.

Yeah. I mean, look. All the metrics are exceptionally strong. On schedule billing is strong even new ARR sorry. New logo New logos grew 40%. You know, we're so ready probable all 80 of us. And I know only number you could talk about NRR. We kind of have the bigger platform we sell. The sooner we sell the next thing. But the lower the NRR. That's why we kind of ignore NRR. But look at other metrics.

Thank you, Tal. Next question comes from the line of Andrew DeCasperi of BNP Paribas. Please go ahead, Andrew.

Thanks for taking my question. Just on a separate line of thought, our checks found that Zscaler could benefit greatly from the federal business, and I know it's not a big contributor of revenue today, but we've heard that it's not really being impacted by the cuts that the administration is making. And in fact, there could be some ramp up there. You seeing the same thing, or are you still optimistic about that line of revenue?

So Fed for us was in line with our expectations this quarter. And sure, there's some uncertainty in the business. But Fed wants to cut costs. The biggest cost in the security space is firewall and legacy type of vendors. And if I can go and take a lot of cost out of it by removing a lot of those products, it actually works in our favor. Remo?

Yeah. And also, you know, for our guide for Q4, we're not expecting a significant, you know, strength with that. You know, as Jay mentioned, we're well-positioned. These are very large contracts which take time. We're in 14 of the 15 cap and agencies. But, again, right now, you know, as I said, you know, as Jay mentioned, we came as expected in Q3. And we're not expecting a significant quarter in Q4 for that.

Thank you. Our next question comes from the line of Andrew Nowinski of Wells Fargo. Your question, please, Andrew.

Thank you for taking the question, and, yeah, congratulations, Kevin, on joining Zscaler and Remo. Been a pleasure working with you as well. Wish you well. I wanted to ask about the new growth categories at a higher level. Thank you for providing some of those new metrics for it. I think it was over $1 billion already in ARR across the three new growth categories. You called out it looks like, you know, ZIA and ZPA were part of Zero Trust Everywhere. So I'm wondering what's making up the difference between the $1 billion and the new growth categories they are you generated versus the $2.9 billion in total. And then, you know, what's the growth rate of those sort of non-emerging products look like? Thank you.

Hey. So that's good. That's client for it. Three main buckets. Zero trust and repair. So here, we're basically making sure the customers who are having zero trust users, Zero Trust branches, Zero Trust cloud. All areas together. And this is where these customers were about 30, and we more than doubled it or went to 210. Sorry. And we plan to go to 390. So that's a subset of customers. That's number one. And we are actually seeing 60% of quarter-over-quarter growth in that area. It's a growth factor that matters quite a bit. 60% is impressive. The data security, you know, we have been talking about data security. Quite some time. Last quarter, we shared that. We crossed $350 million in that. And it's still going faster than the total company ARR. And the third area is a relatively newer area. This is our AI solution. This is for our security operation, IT operation. This is where some of the Risk 360 uniform vulnerability management type of solutions coming. And we saw in ZDX Advanced Plus, which actually uses some of the Zscaler CoPilot technology. We're seeing 70% year-over-year growth in that area. And products, the younger products that fall in the security ops bucket, that ACV grew over 120%. So from all angles, these three products are doing very good, amazing growth, and approaching about a billion dollars.

Thank you. Our next question comes from the line of Shaul Eyal of TD Cohen. Please go ahead, Shaul.

Thank you. Congrats Jay, Remo, and Kevin on all fronts. Jay, on Red Canary, there are a number of MDR providers, various sizes out there. What are the two or three reasons that attracted you specifically to this asset over the others? Is it technology? Market reach, clients, revenue scope? Just want to get some additional color. Thank you.

Sure. I mean, this acquisition was driven to make sure we can accelerate our vision to become a leading player in the soft markets. So what did these guys offer? We wanted something complementary to what we had. What we have in this space is the data fabric technology that we acquired from Everest last year. Number one, we are impressed with talented engineers, experienced people who had detection and threat intel. That's foundational to doing these things. Two, I mentioned earlier, we are impressed with the AI technology. For reasoning and workflow they already built and they're using in production. Lots of companies talk about agentic AI. The 20 startups we looked at in this area all knew agentic AI. You look at how many customers do you have, what is in production, RDN. This company had real stuff in production. And we can integrate that technology with our platform with expertise that brings to the table. It did become very impressive. And then, of course, they also have a go-to-market team. That can become a takeoff team or team of specialists to help us take the solution to market.

Thank you. Our next question comes from the line of Matt Hedberg of RBC Capital Markets. Please go ahead, Matt.

Hey, guys. This is Mike Richards on for Matt. Thanks for taking the question. With the accelerating success across the broader platform here, maybe we could take a step back and talk about how much of that success is driven from the ROI, you know, resonating in this macro versus the go-to-market productivity that you guys were expecting. And what inning are we in that go-to-market productivity improvement? Thanks for the question.

So it's coming from Ottawa for VeruMart and versus what? It was productivity. Cost productivity. Okay. Great. Look. All these things in your success. Generally, there's no single thing that kind of makes it happen. It's generally a collection of things that work together. We have a strong go-to-market team. That migration team had done a great job. Platform has expanded. The two together. Then being able to show cost savings. Bring these things together, magic happens. Trying to do one thing at a time goes only so far. You're able to pull it off, great go-to-market, great platform, and cost savings. It's wonderful. In fact, lots of people talk about cost saving. How many companies can actually go to the customer today and say, here's my security solution that's gonna save you money? It's only known that security never saves money. But in the secret world, we are able to show that they can actually save money by taking out a lot of not only legacy security products, but a lot of legacy networking products as well. That's why the numbers are very impressive. We are very excited about it. This thing has been working for quite some time. It's getting better. And so and the result of that ends up being good numbers and good productivity.

Thank you. Our next question comes from the line of Gray Powell of BTIG. Your question, please, Gray.

Okay. Great. Thanks for taking the question, and congratulations on the good results. So I just maybe had, like, a higher-level question. I understand the need for customers to rationalize their spend or, you know, like, not buy the same product twice. But we've also heard, particularly with other security vendors, that some companies have become really aggressive pushing ELAs. And sometimes that ends up creating shelfware. So I'd be curious, like, when you're talking about Zscaler versus the competition, is that something that you see in the market? And if so, how does that feed into your customer conversations? And does it actually put you in a better position?

Customers taste like ELA. They know that ELAs often become software. Okay. So we really don't like to push ELA. But our goal is interesting to say customers are drawing to have better cybersecurity. And or cost. And as we go, we show them the journey of Hayes journey, how you can take out these products, these products, these products. And it is a cost. And have better user experience. And in addition, business agility. Often customers saying, I want to open a new branch office. In two days rather than two months. Zscaler can make it happen. There's so many M&As happening out there. Never thought there'd be so many mergers and integration. Every week. I see a couple of them at least and they all need Zscaler solution to be able to bring things together. Without needing legacy network and legacy security. So these deals are actually growing our platform. We're really not selling a lot of ELAs. We're selling the platform they need. Often, I tell salespeople don't really try to push a bigger deal because they can take longer. But the customer says, if I can have more savings, I can do a bigger deal. So we let the deal happen the way it happens. But our goal is to do what's right for the customer. Look at them as a long-term partnership. And, honestly, one of the number one things I look at from a go-to-market point of view is how well is Zscaler deployed? How much is not deployed? Is it a big focus on that? And I can tell you the Zscaler solutions are very well deployed out there.

Thank you. I would now like to turn the conference back to Jay Chaudhry for closing remarks. Sir?

Thank you for joining us for the earnings call. I look forward to seeing you at one of the many conferences. Thank you again.

Goodbye.

This concludes today's conference call. Thank you for participating. You may now disconnect.