Good afternoon, and thank you for joining us at the Palo Alto Networks keynote at the Goldman Sachs Communacopia + Technology conference. I'm Gabriela Borges. I cover emerging software here at Goldman, and I'm delighted to have on stage with me, Nikesh Arora, CEO of Palo Alto. Thank you for having me. Thank you for your time. What did you pay all these people to stick around? Yeah, it's, it's a great reason to anchor the end of the conference. I wanted to start on the milestones of the last five years, and I think about the learning curve that you talked about when you first joined the company, the technical debt and building up the product portfolio, going from one platform to three platforms. And I want to ask a forward-looking question, which is: what do you think the one or two milestones are that will define the next five years of the company? Good question. You said you were going to ask me questions that haven't been asked before, that has not been asked before. Look, the way I see it, and five years ago, when I got in this business, it was fascinating to see there's only 1.5% share that the largest cybersecurity player had in the space, which is unlike any other tech subvertical. There are players who have much larger shares in most verticals. You sit there and analyze, there are 3,000 cybersecurity companies, and the largest has 1.5% share. There's something structurally wrong or different about the industry. And what you realize is that, the bad actors are constantly innovating. Every time you figure out how to fix what they have used as a threat vector, they're busy chasing the next threat vector. So it's, bizarrely enough, the most innovative industry in the world because the bad guys move on to the next thing when you're blocking the last thing, and you're busy selling the last thing to a bunch of customers for 10 years, and they, they're on to the next thing. So if you look at the history of cybersecurity, it's littered with companies that are amazing for 10 years, and then they sort of stick around and sort of stabilize or, or stall at a certain place. Then you realize that part of the reason is that most of these companies that are winning in their swim lane don't think about the new swim lanes that are being created while they're there. So we did that, and the general pushback from the investors and customers was, "I don't want to put my eggs in your basket just because you have multiple products." So we said, "What convinces them?" We looked and said, what normally convinces them is if people are in the top right quadrant in enterprise, the Forrester and Gartner of the world. So we set about saying, "Let's create our products in the swim lanes, but the benchmark has to, or milestone, has to be we have to be in the top right quadrant." So now we're in 17 top right quadrants in five years. This has not been done in tech before. There's possibly two companies, possibly, because I haven't gone and done all the research, but I think Microsoft might have done it, and IBM might have done it at some point in time. There's no fourth tech company who has 17 top right leadership quadrant positions. So we established that we can build best-of-breed cybersecurity products, and then we started to platformize. We have three platforms: network security, cloud security, and SOC transformation. I think in the next 5-10 years, it is not infeasible that, you know, there will be consolidated platforms in cybersecurity, and eventually, you know, the equivalent of a Workday or a Salesforce or a ServiceNow starts to develop in security. That's our aspiration. We want to be that, that company which has double-digit market share, if not more, in the space. That should be the milestone, we aspire for. Do you think you can get there with the three platforms that you have today? Yes. Yes. I think, our newest platform around the SOC is... has tremendous potential. I think that's kind of the integrated platform, integrated platform. Most of our competitors in that space are 15-year-old tech. I think it's the, it's the CrowdStrike, Palo Alto, seminal moment that happened to endpoints, which is happening to SOC, except this time it's us. Let's stay on the theme of SOC. I want to think through a little bit how the data set that you have is differentiated because you are collecting telemetry across the three platforms. So maybe as the first part of that, talk to us about the R&D synergy that occurs from being able to connect the dots across the different types of data that exist in an enterprise. Great. So let's step back for a second. The traditional approach to security is there's this thing called SOCs. You try to protect the enterprise by buying a whole bunch of security software, and every piece of security software either blocked something bad or sent you an alert saying, "Hey, here's a problem. Go figure it out yourself, dear customer, because you have 40 different security vendors, and I don't know what to do with it." And this thing went into a place called SOC, and you had a bunch of analysts who would figure out what happened, and you stored a lot of data. And the bad actors were taking on average 20 days to breach you and steal data, so you had 20 days to go figure out what happened. People would analyze the data in Splunk or ArcSight or QRadar and prioritize stuff and figure out what happened. Well, guess what? Now, that is happening, the fastest we've seen is 5 hours. Getting in, stealing a terabyte of data, going out of the enterprise in 5 to... 5, 11, that's the spread, between 5 and 11 hours. The mean time to fix in a SOC is still 6 days. So this is a problem that is not going to fix itself. The only way to fix the problem is stop collecting data and analyzing it later, is to start analyzing it as you collect the data. So we've spent 5 years building that tech. It's 45% data in most companies is firewall data from Palo Alto. 40% of your data comes from your endpoint. That's 85% data. You can cross-correlate all the other 15% across 700 vendors against that 85% data. We've built the tech. Even just within Palo Alto, we analyze 76 TB of data per day. We're the largest user of BigQuery in the world. That's just with the customers we have today. We have 35 customers where we do the software. We have 62,000 customers with firewalls. So I'm telling you, we have the most amount of data in security. We use that cross- correlation. Our first 10 customers, we've taken them down from 6-7 days to an average of 5 hours of fixing security. Our aspiration is to get them to under 1 minute, which is where we are. So eventually, security has to become real time. We are running 1,300 machine learning models in our product, which is what I like to call Precision AI. This is not ChatGPT or OpenAI. This is Precision AI. 1,300 machine learning models, the models you'd want to drive your car. You don't want ChatGPT driving your car. If it hallucinates, it's a bad idea. The technology that you're using, the drinking your own champagne, so to say, to get your own SOC operations down to a minute in response time, are there other vendors that you still need to leverage in order to be able to make that happen? Okay. And so then the question for your installed base is: where do you think customers are in embracing the evolution from endpoint to XDR to XSOAR to XSIAM to full SOC transformation? You know, this is early days. We just launched this product about nine months ago. We did about $200 million in booking that product in the last nine months, which was a surprise to me and most of my colleagues in the company. We were amazed and surprised at how well it did for us in the early days. So we're really sort of trying to scale it up across the board, across every part of our company. What's fascinating is this is the first time in the history of security I can show up with, an outcome-based product. Every other time it is, "Can your product do the following 200 things?" I say: "Why are you worried about what 200 things I can do? What I can do, which nobody else is willing to offer you, I can take your SOC from 6 days to 5 hours." We're running case studies on every one of our customers that we have sold. Our aspiration eventually is to walk in and say, "We can promise that we'll bring it to ours. If you have enough data, I can prove that I can bring it to ours." I don't know if many of you might have noticed this, September first is a red-letter day. In security, the SEC has required that every company has to disclose a breach in 4 days. That's kind of interesting. You have to disclose in 4 days what takes you 6 days to figure out what's going on. For two days, you're exposed, which means every bad actor in the world is going to be looking for SEC notifications saying, "Company X is breached." They're still working on the fix. We've seen examples before where regulation changes, and in theory, there is a hope that it changes the urgency on SOC transformation or on, on security transformation, and sometimes it doesn't happen. Are you, are you at a point where customers are paying enough attention that you're seeing a change in the urgency because of something like SEC regulations? So, Gabriela, that's just kind of like the... That's the conversation we're having in the context of the next 5-10 years. You said, where does this milestone happen? Yeah. So this is early days over there. We still do, you know, $9 billion in bookings and everything else that we do, and $7 billion of revenue there, so there's a whole bunch of other stuff going on, too. Fair, fair enough. So I'm curious, you mentioned a unique way in which SOC transformation is differentiated because of the outcomes-based results. Yes. Are there other observations that stand out to you in how SOC transformation is different from network transformation and the types of network transformation that you've seen at Palo Alto Networks with SASE, for example? Yeah. I think, what's interesting in network transformation and the SASE product is actually both a networking product and a security product. We're actually running an operating service now for the first time as a company. We have north of 14 million users that we run operations for every day across possibly 2,000 companies in the world. So we're slowly insourcing the network operations for companies. And basically, what's happening out there from a network transformation perspective is that there is, without going through all the details, there's a cost-neutral transformation most customers are embarking upon, whether they place MPLS with SD-WAN, and they put security on top in the middle. It's still early days. I think about 15% of the market is transformed. There's probably 85% more to go in the next 10 years. This is going to be a $20 billion-$30 billion market, and I think as I've always said, there's two and a half players. So it's interesting that you started this conversation with talking about the fragmented nature of security, and 1.5 points of share going to something that more accurately represents what we've seen in other software markets. The other piece of this is what's happening at the TAM level. If I think through the evolution of security being tied to digital transformation and security grows up and to the right, the question I have for you is: do you think that the security TAM could grow faster over the next five years than what it has done over the last five years because of the next phase of, let's say, AI-catalyzed digital transformation? Possibly, but honestly, like, it's a $200... Our addressable TAM is north of $200 billion, and we have 9 or 7 in a year. Like, I don't need the TAM to grow faster. I just need to take more of the TAM. So... And that's why we think we have so many more swim lanes now that we play in, and it's highly efficient from a sales go-to-market perspective. It's highly interesting from a customer interest perspective, from a partner interest perspective, that we have. I think we have critical mass now as a security company. We actually are of interest to every customer, are of interest to every partner, more so than most others. So I think it's an execution question. Can we actually go out there and get more of the TAM? Is the TAM going to grow? Of course, it's going to grow. You know, you can find estimates between 5%-15%, you know, by lots of smart people like yourself, who will tell you, well, the security TAM is going to grow the next 5-10 years. It's going to grow between 5%-15%. So as you level up the conversation you're having beyond just one piece of the security architecture to what I would describe as more of an architectural conversation, a strategy conversation at the highest levels of your customer organizations, how do you think about someone like a Microsoft as a competitor? Or even we had Google on stage earlier talking about their security business and importance of security to their roadmap. How does the competitive environment evolve at the strategy level? The good news is, when you start off with 1.5% share, you know there's 98.5% you don't have, right? You wake up every morning knowing you're gonna get somebody's gonna show up and punch you in the face and take business away from you. You wake up in the morning saying, "Every deal is gonna be price competitive." You get a deal where nobody competes, you're like, "Phew, that was fun. How do I make that happen?" So there's gonna be competition all over the place. You know, and there are many people who compete with Microsoft and partner as well with Microsoft. I'd say there are some swim lanes where we're possibly a few years ahead of them, and I think our task is, can we run as fast and keep our competitive lead in that space? Hopefully. I mean, think about it. Security is approximately 5% of cloud spend and 10% of enterprise spend. So I think Google's too busy chasing AI and cloud. They should not, they'd not be spending as much effort and time on the 5%. That's where they're focused. Microsoft possibly is going to go do the same. We're possibly three years ahead in SASE than most people. We just are the only one now in the leadership quadrant in SASE. Gartner just published. So, you know, our task is to make sure we don't lose on innovation. We're not going to. We've demonstrated that the last five years. As long as we keep, keep winning on innovation, I'm less worried about competition. Does the same level of commentary apply, innovation versus competition, equally across all three platforms? The reason I ask is because network security, the market leadership there is an order of magnitude measurable in market share data, for example, relative to something like Cortex or Cloud, where it's harder for us from the outside in to look at market share data. Yeah, look, on network security, we have the largest market share in hardware and software firewalls, where we did $1 billion in bookings on SASE, which I think makes us the second-largest player in SASE. Together, we are the largest player in network security. On cloud security, we're the only multi-cloud vendor which can do 11 modules that give you cloud security. We did $500 million ARR. Look, the cloud providers have their own security tools. If you are multi-cloud, you're gonna have to use all those tools to give you one pane of glass. I think it's early days in cloud, and I said this to some of the investors earlier. I said, "We're possibly one of the top 10 users of GCP." If I was paying myself for my cloud security products I use to protect my code, I'd be spending $20 million a year. And we're 500 on revenue on Fortune 500. There's 499 other companies which possibly spend more money on cloud over the next 10 years, and if all I need is 5% of their cloud spend, I just need to make sure I'm there. I need to make sure they're using my platform. I need to make sure as they move to the cloud, this is the platform they use. So I think that's a huge market in the future. It's early days. It's not a fully formed market yet. We're not going to give up our innovation lead. We'll see how that evolves. So the SOC side, we're the challenger, right? It's a $30 billion market, which I think is going to be an $80 billion-$90 billion market because of AI in the next 10 years. And our question is: Can we go maintain, create the momentum we have in XSIAM over the next 10 years and try and be the CrowdStrike of the SOC, what CrowdStrike did to the endpoint market? I think we should be able to. Absolutely. So I want to focus the discussion now onto fiscal year 2024. And I remember you made a comment on stage last year on every year has a degree of unpredictability to it. Yes. Yes, I've not seen a normal year yet. So my question to you is: How did the fiscal year of 2024 process planning compare to fiscal year 2023? Are there one or two things that stood out to you? I know you've talked about how cost of capital is impacting customer purchases. What was different this year? I think, I think customers and companies are still absorbing the change in behavior. I think the idea that money was free for 10 years, you walk up to a customer saying, "Here's a 3-year deal," and the guy said, "Oh, what do you want me to pay you for three years? $10 million?" "Yeah, I need $10 million now." He's like, "Well, give me a discount. Here's 5%." "No problem. $10 million here. Like, I'm making 25 basis points in my treasury." Now, the guy's making 500 basis points in treasury. He wants a 15%-20% discount to pay you cash up front. Suddenly, people understand the cost of money. So suddenly, you have a choice. You can take the 20%, take the 20% discount, take a hit on bookings and revenue, or you can take payments every year. That changes all the math that all the wonderful analysts are used to tracking, and they're all, like, trying to figure out, is demand going away? What's... Demand is there. Cybersecurity demand is growing. It's a secular demand. It's not cyclical. People are getting more petrified. The attackers are moving faster. The plant of cybersecurity has been chronically underinvested in, so this is a continued demand story. The question becomes an execution question: Can companies execute in this market? What's happening is you're seeing all these sort of compounding effects, which talk about cost of money, which is causing every, possibly every person who sat up here on stage has said longer deal cycles and more scrutiny and hard to get deals done in 90 days, right? That's all. We're just absorbing that change in customer behavior. Demand is not changing. It's execution is shifting. Why not make a more active shift towards one-year billing duration, where you can maximize annual billings as opposed to total contract value? Why? Because then you solve the value of money equation where- I'm not trying to solve it. Okay. I'm trying to get, build great products and have my customers use it. I don't, like, 70% of my customers still pay me cash up front. It's good. It's called cash flow. I like cash flow, so it's fine. 30% just started paying me on an annual basis or getting financing. It's transitioning beautifully. I still have mid- to high 30% free cash flow margins. I think we, over the next 10 years, we can keep transitioning them to more and more annual billings softly. While we do that, we'll continue to maintain high free cash flow margins, much better transition. I've seen CEOs who do financial transformation, they get stuck in the middle. It's a very horrible place to be. That makes sense. Okay, so in the context of the change in the buying environment, what were the key takeaways from sales kickoff? I know you spent a little bit of time previewing with us things like Cortex being sold through the core sales. Well, the sales kickoff, the number one takeaway was, don't have it on a Sunday and have earnings call on Friday. But other than that, what did we learn in sales kickoff? Look, our big doubling down at this year's sales kickoff is we've built our best-of-breed amazing products. We're now pivoting to demonstrate the value of integration. For five years, people didn't believe that integrated products need to exist in security. Now, it's beginning to dawn on many of our customers they'd much rather have integration, because not having the integration hasn't made the breaches stop or hasn't made bad actors go away. So they're beginning to understand the value of integration. Our job now is to demonstrate the value of integration in the UI. We showed some examples in our analyst day, or analyst call, if you will, how we're going to make security be more useful from an integrated perspective. We're going to keep doing that. Our sales team saw those screens. They were extremely excited because security companies are not known for beautiful UIs, so we're working hard on that, making sure we can demonstrate the value to our customers. Our sales force was really excited about XSIAM. You know, salespeople are, in the right way, you know, economically motivated. When they see you can do $20 million, $30 million, $40 million deals, that gets them more excited than doing $2 million-$5 million deals. So they were really excited that there's a product now that's hot, people want it. It's got big dollars associated with it, so that was good. And people generally like the idea of hanging out together. Who would've thought? So, just about the change that happens when you take a specialized product like Cortex this year or SASE last year, and you introduce it to your broader sales force. Order of magnitude, boots on the ground, how does that change the number of conversations your broader team is having? Yeah, I think for context, as for people, as you know, in five years, we've built three businesses of $1 billion each, right? And when you build a brand-new business, you need people who understand the business fairly well. So you have a specialist sales force because you don't want to pitch it wrong, and you don't want to disturb the existing business, because then you guys get all nervous that we're losing sight of the core business. So you have to have your core team, you build a specialist team. Somewhat inefficient from a salespeople perspective. They end up sort of meeting with the same customer a few times. They end up causing a few, like, some odd friction, but you do it because you want to make sure you can prove the product market fit. I think $1 billion is an ample product market fit. That's, you know, bookings of many companies out there in cybersecurity. So once we get there, we say it's time to now introduce that back into our core team, because now it's part of our core business. And in the last five years, we've gone from 5,000 people to 14,000. 86% of the company is new. We're making sure the people we hire actually have the capability of being able to represent a much broader portfolio. So they usually come from places where they were selling a different portfolio. Firewalls are a lot easier to sell than SASE, than Cloud is, than Cortex is, so- Yeah. They can reverse into understanding firewalls. So we've managed to get people out in the field who understand multiple products. And then last year, we merged SASE. We did $1 billion in SASE this year, despite merging them with the core team. This year, we're merging Cortex. We did $1 billion in Cortex this year. We'll see if we can do better next year, because now 80% of our sales team can sell all these products. What is the milestone you're looking for to be able to do the same with Cloud, or do you already have cloud training and enablement? Cloud is a, you know, like, it's an annual billing ACV business, the one you want, right? Mm-hmm. It did $500 million in ARR. That's more of a consumption-driven business. We want to make sure people are consuming more and more cloud security because it's more sort of an education. You have to make sure cloud works end to end. They don't like the dollars associated with monitoring every part of the cloud environment, so you have to keep educating them on that process. Cloud is a substantially different persona in a company compared to traditional enterprise security and IT. So we're going to hold off on trying to merge cloud with our core sales team. Having said that, you know, when the core sales team or I get all the way to CIO or CISO, we sell... I sell everything. I don't call my specialist and say, "Buy cloud." So at some level, we are able to sell the entire portfolio, but as you get down in the organization at a practitioner level, the whole sale is very different. It's very hands-on, very demonstrative. It's very, you know, "Let me show you how I spin up code here, and here's how it needs to get monitored." So more hands-on. Based on the success that you've already had with Cortex, do you already have the buying relationships that you need with the key personas of the enterprise to be able to cross-sell Cortex into the firewall install base? We're still working our way up there. You know, five years ago, we didn't have products. We spent a lot of time building the products, spent a lot of time doing product market fit. I think the next five years will be scaling our relationship with customers, both directly and through a lot of the partners. A lot of GSIs, a lot of service providers are interested now working with us because we've become a sort of must-have part of the portfolio. One of our products has to be there in most customers, and the GSIs are recognizing that. They'd much rather work with Palo Alto, who has multiple products in the category, which are industry-leading, than go find 17 companies to work with to find those 17 products. Yeah, it leads to a nice question about the system integrator ecosystem, because we know that SIs have relationships with multiple point products, to your point. So how do you go about converting or bringing over more SIs over to the platform approach? Can they collectively make the same amount of money or more money selling the Palo Alto platform versus the point products? What, what, what are the selling points that you communicate to them? Look, at the end of the day, the SIs are very often involved in large-scale technology transformations for customers. They'll do very large amounts of business. They, they'll build, they'll operate, they'll run it sometimes, they'll advise. So they are involved in multiple parts of this. Now, the moment they get in the build and operate mode, they actually don't want to deploy 17 products. They want to deploy one, because the more sort of efficient it is for them to deploy one product, the more profitable possibly it is for them, the less error-prone it is, the less amount of skills they need to learn 17 different products and deploy them. So it actually is a good thing for them to partner with a single vendor on multiple swim lanes, as opposed to multiple vendors, as long as the products are good and they will meet the requirements of the customer. So that is a prerequisite. You can't go with bad products and security, because they work together. You have to have good products. So I think it's a proposition they continue to warm up to, you know, there are some of them, like Deloitte just launched an SSDL, called Secure Software Development Lifecycle. The whole thing is on Prisma Cloud, and Deloitte is training their entire sales force on how do we go do better software development and make it secure, and the way you do it is by using Prisma Cloud as part of the underlying sort of the product solution. Because eventually, the customer is looking at how do I deploy this in my environment? So well, you deploy Prisma Cloud, and that's how you get a secure software development lifecycle. Or somebody saying, "We'll do a SOC transformation." Well, here's the way to do it. "Well, what am I measuring in the end?" Well, you need to figure out how long it takes to solve the security problem. "Well, are you SIs going to guarantee me that?" "Well, I don't know. Well, I will. Absolutely. All right, I'm going to pause and go to questions from the audience. So I'll come back to one of the older debates in the firewall space, which is physical versus virtual. Yes. I'm curious, as you've had more success with virtual firewalls, how do you think about that TAM being substitutive versus additive? So I'll tell you, the way to think about firewalls is basically anytime a bit travels into your organization or outside your organization, you have to look at it. If you don't look at any bit that comes in and out, it could be malware, it could be a bad IP address that your employees are going to. You have to inspect every bit. Traditionally, you call it a hardware firewall. It inspected every bit that came into your data center or went out. Now, your bits are going to the public cloud. You've got to inspect them, but they can't be inspected by a hardware firewall. You've got to inspect them with a software firewall. You've got bits going into your 5G network. You've got to inspect them with a 5G firewall. You have bits from your laptop going into your data center or going to Workday or Salesforce or SAP. You've got to inspect that bit. I'll tell you one thing, the amount of data that is floating is increasing way faster than any IT TAM or cybersecurity TAM. It doubles every year, so you have to inspect every bit. As long as you have to inspect bits, this concept of a firewall will exist. How you manifest the firewall doesn't matter. It's either hardware or software or SASE. That's what it is. So I would say the network security market is robust, will stay robust for a very long time. Actually, software is much easier to maintain. It's much easier to upgrade. I have customers who haven't upgraded software for 12 months because they're still testing it. The software, I don't wait for them. I upgrade them anyway. My SASE customers are up to date every day. My hardware customers can be one year delayed on upgrading. One-year-old software is not as secure as current software. So you want me to be more software. You want it for better security outcomes of the company, and every bit has to be inspected. So, if you're only a hardware firewall company, you're going to miss the software bits, you're going to miss the SASE bits. Do you find that customers, this network transformation piece of this towards more distributed network security is still tied to the classic 3-5-year firewall refresh cycle, or has it leveled up into something that's independent? No, I think the SASE transformations have overtaken this idea of hardware refresh cycles. Like, hardware refresh cycles are the most boring thing customers do today. One thing we didn't talk about is margins and operations. Yeah. I want to make sure we talk about that. Yeah, absolutely. Just watching it for you. So here's my question on margins. Yes. Your FY 2026- Oh, should I just ask my question? Go ahead. Your FY 2026- Yes. ... operating margin targets. Yes. 28%-29%. Yes. If I think about the best software businesses that we know that are doing north of 40% with scale, and I think about the comments that you've made on cross-selling into the install base and how accretive that is from a cost of acquisition standpoint, because the cost of acquisition is lower and you're selling all of this really rich revenue, how do you think about the limit to where your margins can go over time? Look, if you think about most enterprise companies, if you're a traditional enterprise company, you're not blessed like Adobe or Atlassian, which have, you know, quasi user-led or, or other, you know, consumer businesses part of it. The biggest cost to enterprise is sales and marketing. You look at a billion-dollar company spends 60%, a seven billion dollar company spends 35%, a two hundred billion dollar company spends 18%-20%. So the maximum leverage is in sales, and then there's cost of operations and customer support. So these are the three buckets, right? Broadly, customer support, sales and marketing, and cost of regular operations. Regular operations, there's 100-200 basis points. Most companies are within 200 basis points of operating margin operation in those areas at scale. Sales, you can get lots of leverage. If you're doing $200 deals, it's a lot more fun and a lot cheaper than if you're doing $20 deals. One metric we track is how big can our deals get with each customer? The bigger they get, the more efficiency we get from a cost of sales perspective. The other thing we're gonna track is customer support. I think most companies should be looking hard at that cost. I think AI is gonna cut that cost by half in the next 5 years. I think in operations, you probably get 100, 200 basis points. If you add it all up, if AI lives up to its promise in the next 5 or 8 years, you should probably be able to get the best-in-class margins you talk about in the next decade. How, how do you reconcile that with this idea that security is one of the most innovative or fast-paced product cycle industries? Maybe that's more of an R&D leverage question. Yeah. Again, you know, 12%-16% of $20 billion is a lot more than 12%-16% of $1 billion, mathematically speaking. So I'll say, the bigger we get, the more leverage we have from an R&D perspective because we have cross-leverage across all of our platforms, right? If I find a threat in the network side, I can make sure I can protect in the cloud. I can go and cross-reference that in the SOC. But if I'm only running one vertical, I have to spend the R&D to understand the other verticals of the platforms. So from an R&D perspective, highly scalable, highly useful. I'll end with a capital allocation question, which is, you've talked about the volume of startups that your corp dev team meets with. Yes. Any interesting observations to share about the types and qualities of companies that your team is finding interesting today versus a year ago or three years ago? Look, the good news is, the bad actors keep innovating, which means we have to keep innovating at our end to make sure we understand new threat vectors and three problems. You know, one year ago, we were sitting here, nobody knew about AI and what the threats of AI are. Today, I have AI models in-house generating malware. We're actually using all publicly available models to generate malware to see how good they get. They can get pretty good. Then we're building antidotes to those malware that we're creating using generative AI to protect ourselves, right? So what's happened is now there's tons of innovation going on. AI is a new threat vector. Every company wants to put data into all these public clouds in data stores to be able to leverage for AI. You need a whole new data security paradigm. So there's constant innovation going on. You have two choices: You can build or you can buy. But it's harder for us to buy because now we have three integrated platforms. We have to look at every acquisition target, every company, and say, "What is the cost of integrating this versus what is the cost of building it ourselves?" In terms of time and competitive advantage, not economically, but, you know, as I've said before, I'm interested in buying great tech. I don't need to buy revenue. I know how to generate revenue. I need to make sure I buy great tech, which is what we've done. We did $2.9 billion in NGS ARR. Majority of that was from acquisitions. Absolutely. Fantastic. Please join me in thanking Nikesh for his time. Thank you very much.