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Zscaler (ZS) CY4Q22/FY2Q23 Earning Call Transcript (中英文版)

Zscaler (ZS) FY2023Q2 Earnings Call Transcript

ZS earnings call for the period ending December 31, 2022, Mar 02, 2023, 4:30 p.m. ET

Zscaler earnings summary:



    Call participants:

    Bill Choi -- Senior Vice President, Investor Relations, and Strategic Finance

    Jay Chaudhry -- Founder, Chairman, and CEO

    Remo Canessa -- CFO

    Brad Zelnick -- Deutsche Bank -- Analyst

    Sterling Auty -- MoffettNathanson -- Analyst

    Andrew Nowinski -- Wells Fargo Securities -- Analyst

    Alex Henderson -- Needham and Company -- Analyst

    Roger Boyd -- UBS -- Analyst

    Joel Fishbein -- Truist Securities -- Analyst

    Patrick Colville -- Scotiabank -- Analyst

    Saket Kalia -- Barclays -- Analyst

    Matt Hedberg -- RBC Capital Markets -- Analyst

    Mike Walkley -- Canaccord Genuity -- Analyst

    Keith Bachman -- BMO Capital Markets -- Analyst

    Jonathan Ruykhaver -- Cantor Fitzgerald -- Analyst

    Gabriela Borges -- Goldman Sachs -- Analyst

    Peter Levine -- Evercore ISI -- Analyst

    John DiFucci -- Guggenheim Partners -- Analyst

    Shaul Eyal -- Cowen and Company -- Analyst

    Prepared Remarks:

    Operator

    Hello and welcome to the Zscaler second quarter fiscal year 2023 earnings conference call. After the speakers' presentation, there will be a question-and-answer session. I would now like to hand the conference over to Bill Choi, senior vice president, investor relations and strategic finance. Sir, you may begin.

    Bill Choi -- Senior Vice President, Investor Relations, and Strategic Finance

    Good afternoon, everyone, and welcome to the Zscaler second quarter fiscal year 2023 earnings conference call. On the call with me today are Jay Chaudhry, chairman and CEO; and Remo Canessa, CFO. Please note that 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, 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 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 would also like to inform you that we'll be attending the following upcoming events in March: Morgan Stanley TMT Conference in San Francisco on March 6th, JMP Technology Conference in San Francisco on March 7th. Now, I'll turn the call over to Jay.





    Jay Chaudhry -- Founder, Chairman, and Chief Executive Officer

    Thank you, Bill. We delivered a solid Q2 despite economic challenges that have impacted the broader tech industry. For the quarter, our revenue grew 52% year over year, and billings grew 34%. Billings were impacted by new customers being more deliberate about their large purchasing decisions at the start of the calendar year.

    These deals have not gone away, and we have closed a few already in February. On the other hand, we had strong growth in our expansion business, with existing customers increasing their deployments and adopting our broader platform. Once again, our dollar-based net retention rate was over 125%. We continue to delight our customers by accelerating their path to better security, business agility, and cost elimination, helping them solve some of their highest priorities.

    This drove our net promoter score, or NPS, to a new height. Our NPS now exceeds 80, which is more than two times the average for SaaS companies. And today, more enterprises than ever before recognize Zscaler as the best choice to secure their digital transformation, strengthening my confidence in our $72 billion serviceable market opportunity. Our disciplined approach to growth is reflected in our strong operating profit and free cash flow, both of which doubled on a year-over-year basis.

    謝謝你，比爾。儘管經濟挑戰影響了更廣泛的科技行業，但我們在第二季度取得了穩健的表現。本季度，我們的營收同比增長 52%，訂閱付費金額 Billings 增長 34%，新客戶在日曆年開始時更慎重地考慮他們的大型購買決定，從而影響了訂閱付費金額 Billings。

    這些交易並沒有消失，我們已經在二月份完成了一些交易。另一方面，隨著現有客戶增加部署並採用我們更廣泛的平台，我們的擴展業務實現了強勁增長。我們以美元為基礎的淨保留率再次超過 125%，我們繼續通過加快客戶實現更好的安全性、業務敏捷性和成本消除的途徑來取悅客戶，幫助他們解決一些最優先考慮的問題。

    這將我們的淨推薦值 (NPS) 推向了一個新的高度，我們的 NPS 現在超過 80，是 SaaS 公司平均水平的兩倍多。今天，比以往任何時候都更多的企業將 Zscaler 視為確保其數字化轉型的最佳選擇，這增強了我對我們價值 720 億美元的可服務市場機會的信心。我們嚴格的增長方式反映在我們強勁的營業利潤和自由現金流中，兩者都同比翻了一番。


    Our operating margin expanded by approximately 4 percentage points, while our revenue also continued to grow at a very high rate. As the world's largest security cloud, we have outstanding unit economics with a stable high 90% growth retention rate and 80% gross margins. These best-in-class metrics are the result of our differentiated services, market leadership, and highly scalable multi-tenant cloud platform. Let me share with you some of my observations about the environment and how we plan to manage our business for the remainder of 2023.

    With macro concerns weighing on business leaders, more organizations are being cautious and measured about their spending. In January, we saw higher scrutiny on budgets compared to December, resulting in additional delays in large deals. These deals haven't gone away, and customers are taking longer to make decisions and requiring additional approvals. In select instances where timing of budgets was a hurdle for new customers, we enabled them to ramp into larger subscription commitments.

    These strategic deals lowered our first year billings but will grow into a higher annual run rate level in the second year. We typically have some ramp deals each quarter. But in Q2, the impact of ramp deals on our billings was higher. These ramp deals position us to expand the customer relationship over time to create long-term value.

    我們的營業利潤率增長了約 4 個百分點，而我們的收入也繼續以非常高的速度增長。作為全球最大的安全雲，我們擁有出色的單位經濟效益，擁有穩定的 90% 的高增長率保留率和 80% 的毛利率。這些一流的指標是我們差異化服務、市場領導地位和高度可擴展的多租戶雲平台的結果。讓我與您分享我對環境的一些觀察，以及我們計劃如何在 2023 年剩餘時間內管理我們的業務。

    由於宏觀問題給企業領導者帶來壓力，越來越多的組織對他們的支出持謹慎和謹慎的態度。與 12 月相比，1 月我們對預算進行了更嚴格的審查，導致大型交易進一步延遲，這些交易並沒有消失，客戶需要更長的時間來做出決定並需要額外的批准。在預算時機成為新客戶障礙的特定情況下，我們使他們能夠做出更大的訂閱承諾。

    這些戰略交易降低了我們第一年的賬單，但在第二年將增長到更高的年運行率水平，我們通常每個季度都有一些坡道交易。但在第二季度，坡道交易對我們賬單的影響更大。這些斜坡交易使我們能夠隨著時間的推移擴大客戶關係以創造長期價值。

    As we enter the second half of fiscal '23, we are expecting customer cautiousness to continue. We have accounted for further lengthening of sales cycles and the uncertain timing of large deals in our outlook. Even though our current pipeline has grown and has more mature deals, we are assuming a slight deterioration in close rates. While not immune to economic slowdowns, cybersecurity is relatively more resilient.

    In my conversation with hundreds of IT executives, cybersecurity remains their organization's No. 1 IT priority. Two weeks ago, we hosted a CXO Summit with 80 CXOs from Global 2000 companies. They talked about the business need to innovate, become agile, and gain competitive advantage with security as the enabling foundation.

    They talked about the plans to shift to zero trust security to reduce attack surface and to adopt the direct-to-cloud architecture that Zscaler pioneered. Customers are excited by the new innovations being added to our platform, and their engagement with us remains very strong. Given the large opportunity we see in front of us, we will keep on building and innovating while also increasing profitability. After significantly growing our teams in recent years, we took a fresh look at our organization and found opportunities to streamline operations and to align people, roles, and projects to our strategic priorities.

    As a result of that review, we initiated our targeted cost optimization plan to drive additional operational efficiency that best positions us to deliver profitable growth. Remo will cover this in more detail. As I mentioned before, I believe that periods of uncertainty can accelerate the adoption of disruptive technologies like ours. C-level leaders are telling me that technical debt of legacy network and security point products impedes progress and slows down business operations.

    隨著我們進入 23 財年下半年，我們預計客戶將繼續保持謹慎態度。在我們的展望中，我們已經考慮到銷售週期的進一步延長和大宗交易的不確定時間。儘管我們目前的管道已經增長並且有更多成熟的交易，但我們假設成交率略有下降。雖然不能免受經濟放緩的影響，但網絡安全相對更具彈性。

    在我與數百名 IT 主管的談話中，網絡安全仍然是他們組織的第一 IT 優先事項。兩週前，我們與來自全球 2000 強公司的 80 位 CXO 舉辦了一次 CXO 峰會。他們談到了業務需要以安全為基礎進行創新、變得敏捷和獲得競爭優勢。

    他們談到了轉向零信任安全以減少攻擊面並採用 Zscaler 開創的直接到雲架構的計劃。客戶對添加到我們平台的新創新感到興奮，他們與我們的互動仍然非常強烈。鑑於擺在我們面前的巨大機遇，我們將繼續建設和創新，同時提高盈利能力。近年來，在大幅壯大我們的團隊後，我們重新審視了我們的組織，並發現了精簡運營並使人員、角色和項目與我們的戰略重點保持一致的機會。

    作為該審查的結果，我們啟動了有針對性的成本優化計劃，以提高運營效率，使我們能夠最好地實現盈利增長。 Remo 將對此進行更詳細的介紹。正如我之前提到的，我相信不確定時期會加速採用像我們這樣的顛覆性技術。 C 級領導告訴我，傳統網絡和安全點產品的技術債務阻礙了進步，並減慢了業務的運作。

    By consolidating point products and embracing zero trust architecture with Zscaler, our customers are modernizing their security while reducing costs, giving them the competitive edge they need to succeed in today's rapidly evolving business environment. We have expanded our business value team to collaborate with customers to create CFO-ready business cases with clear ROI and payback periods that facilitate necessary deal approvals. In today's environment, customers can't afford to risk their mission-critical projects with immature offerings from unproven vendors. We are starting to see deal wins from customers who initially purchased a single-tenant SASE solution from their incumbent firewall vendor that failed to deliver in the real world.

    These customers were misguided by the flawed message: Keep on buying my boxes and use my so-called cloud service when your users are on the road or in a branch office. Our single-tenant architecture, whether deployed as appliances or as virtual machines spun up in a public cloud, will not allow enterprises to fully realize the benefits of secure digital transformation. Every customer we have one has lots of firewalls in the data centers. But when it comes to zero trust security and digital transformation, they're choosing Zscaler because of our multi-tenant cloud architecture that scales and delivers business agility.

    Our Zero Trust Exchange is the largest inline security cloud in the world, processing over 280 billion transactions and preventing 9 billion security and policy violations per day. This massive amount of traffic provides us with more than 300 trillion signals per day to feed our machine learning and AI engines for better detection of user and application traffic anomalies, resulting in superior threat protection. Our AI, ML capabilities are driving customer success at scale in the real world today. Let me share an example with you.

    通過整合點狀分散產品，並採用 Zscaler 的零信任架構，我們的客戶在降低成本的同時，實現了安全現代化，為他們提供了在當今快速發展的業務環境中取得成功所需的競爭優勢。我們已經擴大了我們的業務價值團隊，以與客戶合作創建 CFO 就緒的業務案例，這些案例具有明確的投資回報率和投資回收期，有助於必要的交易批准。在當今的環境中，客戶無法承擔使用未經驗證的供應商提供的不成熟產品來冒險執行關鍵任務項目的風險。我們開始看到客戶贏得交易，他們最初從他們的現任防火牆供應商那裡購買了單租戶 SASE 解決方案，但在現實世界中未能交付。

    這些客戶被有缺陷的信息誤導了：當您的用戶在路上或在分支機構時，請繼續購買我的盒子並使用我所謂的雲服務。我們的單租戶架構，無論是部署為設備還是部署在公共雲中的虛擬機，都無法讓企業充分實現安全數字化轉型的好處。我們擁有的每一位客戶在數據中心都有很多防火牆。但在零信任安全和數字化轉型方面，他們之所以選擇 Zscaler，是因為我們的多租戶雲架構可以擴展並提供業務敏捷性。

    我們的零信任交換是世界上最大的在線安全雲，每天處理超過 2800 億筆交易並防止 90 億次安全和政策違規行為。如此龐大的流量每天為我們提供超過 300 萬億個信號來為我們的機器學習和 AI 引擎提供數據，以更好地檢測用戶和應用程序流量異常，從而實現卓越的威脅防護。我們的 AI、ML 功能正在推動客戶在當今現實世界中取得大規模成功。讓我和你分享一個例子。

    In December, we helped a Global 500 conglomerate experiencing a targeted cyberattack on one of its divisions. Our ThreatLabZ team worked closely with the customer to identify the root cause of the attack and act quickly to prevent any potential damage. Subsequently, this customer upgraded to our ZIA Transformation Bundle to prevent zero-day attacks and secure the entire ecosystem. This win highlights the value of our high-end product bundles and the benefits that our ThreatLabZ research brings to our customers.

    I'm delighted to share that an increasing number of customers are purchasing our comprehensive platform capabilities, which not only accelerates their business value realization but also establishes us as a critical partner for their success. As I mentioned before, customers are increasingly buying Zscaler for Users, our complete platform for user protection, which includes ZIA, ZPA, and ZDX bundled together. In addition, we are gaining traction with workload protection powered by the same core ZIA and ZPA technology. Thanks to new and existing customers purchasing these expanded bundles, we drove a 51% year-over-year growth in the number of customers with greater than $1 million in ARR, ending with nearly 380 of these customers.

    And over 30 of these customers have ARR greater than $5 million. Let me highlight three deals this quarter where the customers purchased all four product pillars. In a new logo win, a top 10 global IT software and services company purchased the Zscaler for Users bundle for 400,000 users, including our advanced data protection suite and our zero trust for workloads for 3,000 workloads. This customer pursued a zero trust strategy due to their business growth, resulting in a complex application and network environment and heightened risk from data sprawl.

    They selected Zscaler as the only scalable zero trust platform that reduces their attack surface and protects their sensitive data while bringing agility to their business. With our integrated platform, they will simplify their security operations by consolidating dozens of point products, including firewalls, VPN, VDI, DLP, and CASB. By purchasing all four product pillars, the customer is making a platform bet on Zscaler to secure their users, workloads, and devices regardless of their location. Next, in an exciting upsell win, a major auto manufacturer upgraded to Zscaler for Users bundle for 35,000 users and purchased zero trust for workloads for 8,000 workloads.

    12 月，我們幫助一家全球 500 強企業集團的一個部門遭受了有針對性的網絡攻擊。我們的 ThreatLabZ 團隊與客戶密切合作，以確定攻擊的根本原因並迅速採取行動以防止任何潛在損害。隨後，該客戶升級到我們的 ZIA Transformation Bundle，以防止零日攻擊並保護整個生態系統。此次勝利凸顯了我們高端產品組合的價值以及我們的 ThreatLabZ 研究為我們的客戶帶來的好處。

    我很高興與大家分享，越來越多的客戶正在購買我們全面的平台功能，這不僅加速了他們的業務價值實現，而且使我們成為他們成功的關鍵合作夥伴。正如我之前提到的，越來越多的客戶購買 Zscaler for Users，這是我們用於保護用戶的完整平台，其中包括捆綁在一起的 ZIA、ZPA 和 ZDX。此外，我們正在通過由相同核心 ZIA 和 ZPA 技術提供支持的工作負載保護獲得牽引力。由於新客戶和現有客戶購買了這些擴展的捆綁包，我們推動 ARR 超過 100 萬美元的客戶數量同比增長 51%，其中近 380 名客戶。

    其中超過 30 家客戶的 ARR 超過 500 萬美元。讓我重點介紹本季度的三筆交易，客戶購買了所有四大產品支柱。在一項標誌性贏得客戶過程中，一家全球前 10 大 IT 軟件和服務公司為 400,000 名用戶購買了 Zscaler for Users 捆綁包，其中包括我們的高級數據保護套件和我們針對 3,000 個工作負載的工作負載零信任。由於業務增長，該客戶奉行零信任策略，導致應用程序和網絡環境變得複雜，數據蔓延的風險也隨之增加。

    他們選擇 Zscaler 作為唯一可擴展的零信任平台，該平台可減少攻擊面並保護敏感數據，同時為其業務帶來敏捷性。借助我們的集成平台，他們將通過整合數十種單點產品（包括防火牆、VPN、VDI、DLP 和 CASB）來簡化安全操作。通過購買所有四個產品支柱，客戶將平台押注在 Zscaler 上，以保護他們的用戶、工作負載和設備，無論他們身在何處。接下來，在令人興奮的追加銷售勝利中，一家大型汽車製造商為 35,000 個用戶升級到 Zscaler for Users 捆綁包，並為 8,000 個工作負載購買了工作負載零信任。

    This platform purchase was driven by the customer's strategy to digitally transform their business operations, including management of the vast supply chain. In fact, we are helping them accelerate time to market for new EVs. Before purchasing ZPA, this customer experienced significant delays in commissioning new vehicles as third parties did not have fast and secure remote access for collaboration. By using ZPA and ZDX, they can now provision secure access to new third parties within a few days compared to over a month it used to take with legacy remote access technology.

    In addition, the Zscaler for Users significantly reduces the risk of ransomware that the firewalls and VPNs allow. Finally, a Global 500 pharmaceutical company upgraded from ZIA for 45,000 users to Zscaler for Users bundle for 85,000 users and purchased zero trust for workloads for 2,000 workloads. They purchased all four product pillars to pursue a cloud-first strategy with zero trust security for all users and workloads. With this upsell, the annual spend of this existing million-dollar customer increased by 6x with additional opportunity for workload protection as the public cloud usage grows.

    Earlier, I mentioned that, in some instances, we enabled new customers to ramp to larger commitments. In one such new logo win, we are excited to partner with an innovative retail leader that's using facial recognition technology and cashless checkouts to redefine their future store experience. This is a significant win for us as retail was a smaller vertical for us historically where we are now enabling new digital transformation possibilities. This retail company committed to an eight-figure total contract value for a multiphase ramp to secure over 90,000 ZIA users, 20,000 ZPA users, and 400 terabytes per month of data from the 20,000 retail store operations.

    This customer had bought a firewall-based SASE solution, which failed to scale, as well as expanded their attack surface. Leveraging our highly scalable and reliable Zero Trust Exchange platform, they will use ZIA to create direct internet access for employee tablets and terminals while using ZPA to secure private access for store managers. Additionally, zero trust for workloads will secure all traffic from cameras and terminals in the retail stores to the cloud. Workload protection accounts for approximately 40% of the total deal value.

    此次平台購買的驅動因素是客戶的業務運營數字化轉型戰略，包括龐大供應鏈的管理。事實上，我們正​​在幫助他們加快新電動汽車的上市時間。在購買 ZPA 之前，由於第三方無法快速安全地進行協作遠程訪問，該客戶在調試新車輛方面遇到了嚴重的延遲。通過使用 ZPA 和 ZDX，他們現在可以在幾天內為新的第三方提供安全訪問，而過去使用傳統遠程訪問技術需要一個多月。

    此外，Zscaler for Users 顯著降低了防火牆和 VPN 允許的勒索軟件風險。最後，一家全球 500 強製藥公司從面向 45,000 名用戶的 ZIA 升級到面向 85,000 名用戶的 Zscaler for Users 捆綁包，並為 2,000 個工作負載購買了零信任工作負載。他們購買了所有四大產品支柱，以推行雲優先戰略，為所有用戶和工作負載提供零信任安全性。通過這次追加銷售，這個價值百萬美元的現有客戶的年支出增加了 6 倍，隨著公共雲使用量的增長，工作負載保護的機會也增加了。

    早些時候，我提到過，在某些情況下，我們使新客戶能夠做出更大的承諾。在一個這樣的新標誌中，我們很高興能與一家創新的零售領導者合作，他們使用面部識別技術和無現金結賬來重新定義他們未來的商店體驗。這對我們來說是一個重大的勝利，因為零售業在歷史上對我們來說是一個較小的垂直領域，我們現在正在實現新的數字轉型可能性。這家零售公司承諾為多相坡道提供八位數的總合同價值，以保護超過 90,000 名 ZIA 用戶、20,000 名 ZPA 用戶以及每月來自 20,000 家零售店運營的 400 TB 數據。

    該客戶購買了基於防火牆的 SASE 解決方案，但無法擴展，也無法擴大攻擊面。利用我們高度可擴展且可靠的零信任交換平台，他們將使用 ZIA 為員工平板電腦和終端創建直接互聯網訪問，同時使用 ZPA 為商店經理保護私人訪問。此外，對工作負載的零信任將保護從零售店中的攝像頭和終端到雲端的所有流量。工作負載保護約佔總交易價值的 40%。

    As these deals show, customers are embracing our expanded platform, including our two emerging product pillars: ZDX for digital user experience management and Zscaler for Workloads for securing servers and workloads. These emerging products are on track to meet or exceed our full year target of contributing high teens percentage of our new business. Our zero trust for workload solution is roughly doubling year over year. In addition, our new CNAPP solution is generating significant customer interest.

    You may recall at Zenith Live in June, we launched our CNAPP solution called Zscaler Posture Control, which is an integrated solution that correlates vulnerabilities and risks across CSPM, CIEM, and infrastructure as code scanning. This quarter, we had a Posture Control upsell win with a Global 1000 engineering company for $0.5 million ACV to secure 5,000 workloads. Posture Control provided visibility across multicloud assets, remediated compliance violations, and revealed previously undetected high-risk vulnerabilities. We are proud that our Posture Control solution was recently recognized by research firm G2 in the leader quadrant based on independent peer reviews.

    We are bringing more innovations to our customers than ever before. In our latest major cloud software release, we brought over 150 new features to market, including product innovations such as AI-powered phishing detection and dynamic risk-based access policy. We continue to drive both internal innovation and highly targeted acquisitions to expand our leadership in the SASE and zero trust security markets. As announced a few weeks ago, we acquired Canonic Security, an innovative start-up in SaaS supply chain security, which protects customer data in SaaS applications.

    For example, Google Suite could be sharing data with 30 other third-party connected SaaS apps that are posing significant risks of data breaches and data loss. Together with our inline DLP, browser isolation, out-of-band CASB, and SSPM for SaaS posture management, Zscaler now provides unprecedented visibility and most comprehensive data protection for SaaS applications and customer data. As we look ahead to the next few years, we are committed to driving broader adoption of our zero trust platform for users, workloads, and IoT and OT to maximize the value of our customers' secured digital transformation efforts. CIOs are telling me that they are using this challenging environment to drive change.

    ROI and cost optimization are becoming bigger priorities as they're being asked to do more with less. With our superior architecture and proven experience, we deliver measurable outcomes at the CXO level that are aligned with our customers' top priorities. Our business value proposition is resonating, and more customers are consolidating multiple-point products with our broader platform, which increases our wallet share with them. We believe that we are still in the early stages of a significant market opportunity to enable secured digital transformation, and we are on track to achieve our $5 billion ARR goal.

    Now, I'd like to turn over the call to Remo for our financial results.

    正如這些交易所示，客戶正在接受我們擴展的平台，包括我們的兩個新興產品支柱：用於數字用戶體驗管理的 ZDX 和用於保護服務器和工作負載的 Zscaler for Workloads。這些新興產品有望實現或超過我們的全年目標，即在我們的新業務中貢獻很高的百分比。我們對工作負載解決方案的零信任同比增長大約一倍。此外，我們新的 CNAPP 解決方案引起了客戶的極大興趣。

    您可能還記得 6 月份在 Zenith Live 上，我們推出了名為 Zscaler Posture Control 的 CNAPP 解決方案，這是一個集成解決方案，將 CSPM、CIEM 和基礎設施中的漏洞和風險關聯爲代碼掃描。本季度，我們以 50 萬美元的 ACV 贏得了一家全球 1000 強工程公司的 Posture Control 追加銷售，以保護 5,000 個工作負載。狀態控制提供了跨多雲資產的可見性、補救了合規性違規行為，並揭示了以前未檢測到的高風險漏洞。我們感到自豪的是，我們的姿勢控制解決方案最近在獨立同行評審的基礎上被研究公司 G2 認可為領導者象限。

    我們正在為客戶帶來比以往更多的創新。在我們最新的主要雲軟件版本中，我們向市場推出了 150 多項新功能，包括產品創新，例如 AI 驅動的網絡釣魚檢測和基於風險的動態訪問策略。我們繼續推動內部創新和高度針對性的收購，以擴大我們在 SASE 和零信任安全市場的領導地位。正如幾週前宣布的那樣，我們收購了 Canonic Security，這是一家 SaaS 供應鏈安全領域的創新初創公司，旨在保護 SaaS 應用程序中的客戶數據。

    例如，Google Suite 可能與其他 30 個第三方連接的 SaaS 應用共享數據，這些應用存在數據洩露和數據丟失的重大風險。結合我們用於 SaaS 狀態管理的內聯 DLP、瀏覽器隔離、帶外 CASB 和 SSPM，Zscaler 現在為 SaaS 應用程序和客戶數據提供前所未有的可見性和最全面的數據保護。展望未來幾年，我們致力於推動我們的零信任平台在用戶、工作負載、IoT 和 OT 中得到更廣泛的採用，以最大限度地提高客戶安全數字化轉型工作的價值。首席信息官們告訴我，他們正在利用這個充滿挑戰的環境來推動變革。

    投資回報率和成本優化正在成為更重要的優先事項，因為他們被要求事半功倍。憑藉我們卓越的架構和經過驗證的經驗，我們在 CXO 級別提供與客戶的首要任務保持一致的可衡量結果。我們的商業價值主張引起了共鳴，越來越多的客戶將多點產品與我們更廣泛的平台整合在一起，這增加了我們與他們的錢包份額。我們相信，我們仍處於實現安全數字化轉型的重要市場機遇的早期階段，我們有望實現 50 億美元的 ARR 目標。

    現在，我想把電話轉給雷莫，了解我們的財務業績。






    Remo Canessa -- Chief Financial Officer

    Thank you, Jay. Our Q2 results exceeded our guidance on growth and profitability even as we manage through continued deal scrutiny and longer reviews. Revenue was $388 million, up 52% year over year and up 9% sequentially. ZPA product revenue was approximately 20% of total revenue, growing 74% year over year.

    From a geographic perspective, Americas represented 53% of revenue, EMEA was 32%, and APJ was 15%. From a new business perspective, EMEA grew strongly on a year-over-year basis despite continued macro challenges in the region. Our total calculated billings in Q2 grew 34% year over year to $494 million. Until we get more certainty around the macroenvironment, we believe looking at total billings on a sequential basis can be a relevant measure of our billings performance in the near term.

    On a sequential basis, billings grew 45% quarter over quarter. Our current billings grew 32% year over year, which includes the impact of strategic deals with phased subscription ramps that Jay talked about earlier. Our remaining performance obligations, or RPO, grew 44% from a year ago to $2.809 billion. The current RPO is 51% of the total RPO.

    Our dollar-based net retention rate was once again above 125%. We have a strong base of large enterprise customers, which provides us with significant opportunity to upsell our broader platform. At the end of Q2, we had 378 customers with greater than $1 million in ARR, up 51% from 251 in the prior year. The continued strength of this metric speaks to the strategic role we play in our customers' digital transformation initiatives.

    謝謝你，傑伊。即使我們通過持續的交易審查和更長時間的審查來管理，我們的第二季度業績也超過了我們對增長和盈利能力的指導，收入為 3.88 億美元，同比增長 52%，環比增長 9%。 ZPA 產品收入約佔總收入的 20%，同比增長 74%。

    從地理角度來看，美洲佔收入的 53%，EMEA 佔 32%，APJ 佔 15%。從新的業務角度來看，儘管 EMEA 地區持續面臨宏觀挑戰，但同比增長強勁。我們在第二季度計算的總賬單同比增長 34% 至 4.94 億美元。在我們對宏觀環境有更多的確定性之前，我們認為按順序查看總賬單可能是衡量我們近期賬單表現的相關指標。

    按順序計算，訂閱金額 Billings 環比增長 45%，我們目前的訂閱金額 Billings 同比增長 32%，其中包括 Jay 之前談到的分階段訂閱增長的戰略交易的影響。我們的剩餘履約義務 (RPO) 比一年前增長 44%，達到 28.09 億美元。目前的 RPO 佔總 RPO 的 51%。

    我們以美元為基礎的淨保留率再次超過 125%，我們擁有強大的大型企業客戶基礎，這為我們提供了追加銷售更廣泛平台的重要機會。在第二季度末，我們有 378 位客戶的 ARR 超過 100 萬美元，比去年同期的 251 位增長了 51%。該指標的持續優勢說明了我們在客戶的數字化轉型計劃中發揮的戰略作用。

    We added 120 customers in the quarter with greater than $100,000 in ARR, ending the quarter at 2,337 such customers. Turning to the rest of our Q2 financial performance. Total gross margin of 80.4% is unchanged from the prior year. Our total operating expenses increased 6% sequentially and 44% year over year to $263 million, primarily due to higher compensation expenses.

    As we indicated last quarter, after exceeding our hiring plans in Q1, we moderated our pace of hiring in Q2. This contributed to a strong operating margin performance in the quarter, with operating margin increasing 380 basis points year over year to 12.6%, which exceeded our guidance. We're seeing the leverage in our financial model that is driven by our strong underlying unit economics. Our free cash flow margin was 16%.

    We continue to expect data center capex to be around the high single-digit percentage of revenue for the full year. We ended the quarter with over $1.9 billion in cash, cash equivalents, and short-term investments. Next, let me provide more details about the targeted cost optimization plan that Jay mentioned. In the past 18 months, we doubled the size of our team to approximately 5,900 employees as we invested aggressively based on our strong market momentum.

    As we watched the macroeconomic uncertainty at the start of fiscal 2023 in the fall, we commented that if the business environment becomes more challenging, our business model allows us to adapt quickly and to deliver expanded operating profitability while we grow. With the announcement today, we are adapting to the changes we saw in Q2. This is a targeted optimization initiative to address inefficiencies in certain job functions and projects. As a result, we're reducing our workforce by approximately 3%.

    Most of the impact from these changes will be seen in Q3. It will take a charge of $8 million to $10 million, including noncash expenses. We'll continue to hire the best candidates in high-priority areas. Now, moving on to guidance and modeling points.

    我們在本季度增加了 120 個 ARR 超過 100,000 美元的客戶，本季度末此類客戶達到 2,337 個。轉向我們第二季度的其他財務業績。總毛利率為 80.4%，與上年持平。我們的總運營費用環比增長 6%，同比增長 44% 至 2.63 億美元，這主要是由於薪酬支出增加。

    正如我們上個季度所指出的那樣，在第一季度超過我們的招聘計劃後，我們在第二季度放慢了招聘步伐。這促成了本季度強勁的營業利潤率表現，營業利潤率同比增長 380 個基點至 12.6%，超出了我們的指導。我們看到我們的財務模型中的槓桿是由我們強大的基礎單位經濟驅動的。我們的自由現金流利潤率為 16%。

    我們繼續預計數據中心資本支出將佔全年收入的高個位數百分比。本季度結束時，我們擁有超過 19 億美元的現金、現金等價物和短期投資。接下來，讓我詳細介紹一下Jay提到的針對性成本優化方案。在過去的 18 個月中，由於我們基於強勁的市場勢頭進行了積極投資，我們的團隊規模翻了一番，達到約 5,900 名員工。

    當我們觀察到秋季 2023 財年伊始的宏觀經濟不確定性時，我們評論說，如果商業環境變得更具挑戰性，我們的商業模式使我們能夠迅速適應並在我們成長的同時提供更大的運營盈利能力。通過今天的公告，我們正在適應我們在第二季度看到的變化。這是一項有針對性的優化計劃，旨在解決某些工作職能和項目中的低效率問題。因此，我們將裁員約 3%。

    這些變化的大部分影響將在第三季度看到。它將收取 800 萬至 1000 萬美元的費用，包括非現金費用。我們將繼續在高優先級領域聘用最優秀的候選人。現在，繼續討論指導和建模要點。

    As a reminder, these numbers are all non-GAAP. For the third quarter of fiscal 2023, we expect revenue in the range of $396 million to $398 million, reflecting year-over-year growth of 38% to 39%; gross margins of approximately 80%; operating profit in the range of $55 million to $56 million; net other income of $10 million; income taxes of $4.5 million; earnings per share of approximately $0.39, assuming 156 million fully diluted shares. Please note that starting fiscal 2023, we adopted the new accounting standard, which requires the use of the if-converted method for calculating EPS. To account for convertible notes, you will need to add back $360,000 in quarterly interest expense.

    For the full year fiscal 2023, we expect revenue in the range of $1.558 billion to $1.563 billion, or year-over-year growth of approximately 43%; calculated billings in the range of $1.935 billion to $1.945 billion, or year-over-year growth of approximately 31%. For Q3, we're assuming billings to decline by approximately 9% sequentially compared to the mid-single-digit percentage declines we've seen in the last few years. This guidance incorporates the macro-related uncertainties that Jay mentioned in his comments. Operating profit in the range of $213 million to $215 million.

    Our guidance reflects approximately 350 basis points of operating margin improvement compared to last year, which is an increase from our prior guidance while growing revenue at above 40%. Income taxes of $18 million. Earnings per share in the range of $1.52 to $1.53, assuming approximately 156 million fully diluted shares. As noted earlier, to account for convertible notes and EPS, you will need to add back $1.4 million in annual interest expense.

    Let me conclude with comments on our investment framework. We remain confident in our ability to deliver on our growth opportunity while increasing profitability. We will balance growth and profitability based on how our business is growing. The recurring nature of our business model gives us good visibility on top-line revenue and allows us to adapt quickly to changes in market conditions to deliver on our operating profit and margin goals.

    If the environment becomes more challenging, we will continue to prioritize profitability, leveraging our strong unit economics and driving efficiencies in our cost structure. In fiscal '23, as a result of our focus on operational efficiency, we're increasing our profitability in the second half to achieve a full year operating margin of 13.7%, reflecting a 350-basis-points expansion, while revenue is still growing over 40%. If the environment improves, we'll prioritize growth. Our long-term investment framework still applies.

    If we are growing revenue faster than 30%, you can expect less than 300 basis points of margin expansion in the year. We remain confident of reaching 20% to 22% operating margins in the long term. With a large market opportunity and customers increasingly adopting the broader platform, we'll continue our disciplined approach to managing our business to maximize value for our shareholders. Operator, you may now open the call for questions.

    提醒一下，這些數字都是非公認會計原則。對於 2023 財年第三季度，我們預計收入在 3.96 億美元至 3.98 億美元之間，同比增長 38% 至 39%；毛利率約為80%；營業利潤在 5500 萬至 5600 萬美元之間；其他淨收入 1000 萬美元；所得稅 450 萬美元；假設 1.56 億股完全稀釋後，每股收益約為 0.39 美元。請注意，從 2023 財年開始，我們採用了新會計準則，要求使用 if-converted 方法計算每股收益。要計算可轉換票據，您需要加回 360,000 美元的季度利息費用。

    對於 2023 財年全年，我們預計收入在 15.58 億美元至 15.63 億美元之間，同比增長約 43%；計算出的訂閱金額 Billings 在 19.35 億美元至 19.45 億美元之間，同比增長約 31%。對於第三季度，我們假設與我們在過去幾年中看到的中等個位數百分比下降相比，訂閱金額 Billings將連續下降約 9%。該指南包含了 Jay 在其評論中提到的與宏觀相關的不確定性。營業利潤在 2.13 億美元至 2.15 億美元之間。

    我們的指引反映了與去年相比營業利潤率提高了約 350 個基點，這比我們之前的指引有所增加，同時收入增長超過 40%。所得稅1800萬美元。每股收益在 1.52 美元至 1.53 美元之間，假設約有 1.56 億股完全稀釋的股票。如前所述，要計算可轉換票據和每股收益，您需要加回 140 萬美元的年度利息支出。

    最後，讓我對我們的投資框架發表評論。我們對在提高盈利能力的同時實現增長機會的能力充滿信心。我們將根據我們業務的增長情況來平衡增長和盈利能力。我們業務模式的經常性使我們能夠很好地了解收入，並使我們能夠快速適應市場條件的變化，以實現我們的營業利潤和利潤率目標。

    如果環境變得更具挑戰性，我們將繼續優先考慮盈利能力，利用我們強大的單位經濟效益並提高成本結構的效率。在 23 財年，由於我們關注運營效率，我們在下半年提高了盈利能力，實現了 13.7% 的全年運營利潤率，反映了 350 個基點的擴張，同時收入仍在增長超過 40%。如果環境有所改善，我們將優先考慮增長。我們的長期投資框架仍然適用。

    如果我們的收入增長速度超過 30%，您可以預計今年的利潤率增長不到 300 個基點。我們仍然有信心在長期內達到 20% 至 22% 的營業利潤率。憑藉巨大的市場機會和越來越多的客戶採用更廣泛的平台，我們將繼續採用嚴格的方法來管理我們的業務，為股東創造最大價值。接線員，您現在可以打開電話提問。





    Questions & Answers:

    Operator

    Thank you. [Operator instructions] Our first question comes from the line of Brad Zelnick with Deutsche Bank. Your line is open.

    Brad Zelnick -- Deutsche Bank -- Analyst

    Great. Thank you so much for taking the question. Jay, I appreciate the backdrop is tough. We hear it from every company.

    But can you frame for us your outlook in terms of things within your control and things that aren't? And maybe also if you could, comment on the integrity of the data that you look at that underpins your confidence in Zscaler's competitive position in the market. Thank you.

    布拉德澤爾尼克 - 德意志銀行 - 分析師

    非常感謝接受提問。傑伊，我很欣賞背景很艱難。我們從每家公司都聽到了。

    但是，您能否根據您控制範圍內的事情和無法控制的事情為我們構建您的觀點？如果可以的話，也許還可以對您所查看的數據的完整性發表評論，這鞏固了您對 Zscaler 在市場上的競爭地位的信心。謝謝。


    Jay Chaudhry -- Founder, Chairman, and Chief Executive Officer

    Brad, thank you. If you look at that quarter, we found that our upsell was quite strong. Customers are loyal to us and like our solution. Upselling becomes easier for us.

    In terms of challenging, new logos with large deals were more challenging as there is additional scrutiny and additional approvals needed. The other thing that worked well was that customers like the fact that we are able to do consolidation of lots of point products that clean architecture and give them strong ROI. That thing has worked well for us. In terms of competitive positioning, we haven't really seen any change.

    In fact, I would say that on the higher end of the market, we actually feel like we are stronger than even before because we have established that we actually have the right architecture, right solutions, with thousands of customers, well-deployed, and very happy customers. And [Inaudible] are beginning to see that some of the solutions that are sold by firewall vendors as SASE solutions, and when customers can't deploy them, they are coming -- falling apart. You know, I have been asked many times in the past two years, hey, are you replacing some of the firewall-based solutions? The answer I used to give is I haven't seen very many out there. Now, we are beginning to see some of them.

    A large retailer I mentioned on my call with 20,000 stores tried for about 18 months to deploy the firewall-based SASE solution to speak and eventually gave up. And we are really taking care of it. The other thing I would mention is Remo has often said, we can adjust our business model as needed. As environment is getting tighter, we are adjusting the model by slowing down hiring.

    Our unit economic cost is very high. So, you're seeing expansion as gross margins and operating margins. So, the operating margins, which are -- investors do like to see. Lastly, my confidence is coming from tons and tons of customer calls I made.

    We had 80 CXOs with us for two days doing an exchange. All of these guys I have deployed have done a great job. They understand the architecture. The more the word spreads out there of better understanding of the architecture, the more they are able to fend off the fluff being specked by competitors.

    So, I'm very confident, comfortable in our ability to stay far ahead of the competition.

    布拉德，謝謝你。如果你看看那個季度，我們會發現我們的追加銷售非常強勁。客戶對我們很忠誠，喜歡我們的解決方案。對我們來說，追加銷售變得更加容易。

    就挑戰性而言，新的大宗交易更具挑戰性，因為需要額外的審查和額外的批准。另一件運作良好的事情是，客戶喜歡這樣一個事實，即我們能夠整合許多單點產品，這些產品可以清理架構並為他們提供強大的投資回報率。那件事對我們很有效。在競爭定位方面，我們還沒有真正看到任何變化。

    事實上，我想說的是，在高端市場，我們實際上感覺自己比以前更強大，因為我們已經確定我們實際上擁有正確的架構、正確的解決方案、成千上萬的客戶、部署良好，並且非常高興的客戶。 [聽不清] 開始看到防火牆供應商作為 SASE 解決方案出售的一些解決方案，當客戶無法部署它們時，它們就會分崩離析。你知道，在過去的兩年裡我被問過很多次，嘿，你要更換一些基於防火牆的解決方案嗎？我曾經給出的答案是我還沒有看到很多。現在，我們開始看到其中的一些。

    我在電話會議上提到的一家擁有 20,000 家商店的大型零售商嘗試了大約 18 個月來部署基於防火牆的 SASE 解決方案，但最終放棄了。我們真的在照顧它。我要提到的另一件事是雷莫經常說，我們可以根據需要調整我們的商業模式。隨著環境變得越來越緊張，我們正在通過放慢招聘來調整模型。

    我們的單位經濟成本非常高。因此，您將擴張視為毛利率和營業利潤率。因此，營業利潤率——投資者確實喜歡看到。最後，我的信心來自於我打的無數次客戶電話。

    我們有 80 位 CXO 與我們一起進行了兩天的交流。我部署的所有這些人都做得很好。他們了解架構。對架構的更好理解的消息傳播得越多，他們就越能抵禦競爭對手的指責。

    因此，我對我們在競爭中遙遙領先的能力充滿信心和自在。

    Brad Zelnick -- Deutsche Bank -- Analyst

    Jay, thank you very much for the added color, and thanks for taking the question.

    傑伊，非常感謝您添加的顏色，也感謝您提出問題。

    Jay Chaudhry -- Founder, Chairman, and Chief Executive Officer

    Thank you.

    Operator

    Thank you. Please stand by for our next question. Our next question comes from the line of Sterling Auty with MoffettNathanson. Your line is open.

    Sterling Auty -- MoffettNathanson -- Analyst

    Yeah. Thanks. Hi, guys. I'm just kind of curious, Jay, when you look at the business, can you give us a high-level sense of how much of the business in the quarter is a replacement of legacy security solutions where cost savings is the driving factor and how much of the business is actually brand new implementations to enable some sort of project where maybe it's a little bit riskier in these tighter budgetary times?

    是的。謝謝。嗨，大家好。傑伊，我只是有點好奇，當你審視業務時，你能否讓我們高層次地了解本季度有多少業務是替代傳統安全解決方案，其中成本節約是驅動因素，並且有多少業務實際上是全新的實施，以啟用某種項目，在這些緊縮的預算時期，它可能有點風險？

    Jay Chaudhry -- Founder, Chairman, and Chief Executive Officer

    As you know, every company has some kind of legacy solution for internet gateway or even VPN access. Those are the two starting points for us. ZIA starts to replacing some kind of secure web gateway and ZPA starts to replacing some kind of VPN, then expand from there. So, almost all business we do start by replacing something except -- well, upsell, too.

    Actually, if you look at our upsell, that means we may have ZIA, some pieces deployed. We may be upselling to replace DLP of some vendor, or we may be replacing VPN of some vendor, or some other stuff. So, almost all business is a replacement for us. You could call some of those stuff expansion.

    For example, when customers want to have direct access to application setting in Azure and AWS without going through the data center, we're still replacing some of the stuff sitting in the data center and some that direct connects they may have bought. So, it's replacement of a bunch of point products into a fewer interior offerings. That's really where the savings come from. That's where the simplicity and operational ease come from.

    如您所知，每家公司都有某種用於互聯網網關甚至 VPN 訪問的遺留解決方案。這是我們的兩個出發點。 ZIA 開始取代某種安全 Web 網關，ZPA 開始取代某種 VPN，然後從那裡擴展。因此，我們所做的幾乎所有業務都是從替換某些東西開始的——好吧，追加銷售也是如此。

    實際上，如果您看一下我們的追加銷售，那意味著我們可能部署了 ZIA 和一些部件。我們可能會追加銷售以替換某些供應商的 DLP，或者我們可能會替換某些供應商的 VPN，或其他一些東西。所以，幾乎所有的業務都是我們的替代品。你可以把其中一些東西稱為擴展。

    例如，當客戶希望在不通過數據中心的情況下直接訪問 Azure 和 AWS 中的應用程序設置時，我們仍在更換一些位於數據中心的東西和一些他們可能已經購買的直接連接。因此，它將一堆單點產品替換為更少的內部產品。這就是節省的真正來源。這就是簡單性和易操作性的來源。

    Sterling Auty -- MoffettNathanson -- Analyst

    Got it. Thank you.

    Operator

    Thank you. Please stand by for our next question. Our next question comes from the line of Andrew Nowinski with Wells Fargo. Your line is open.

    Andrew Nowinski -- Wells Fargo Securities -- Analyst

    Great. Thank you. Good afternoon, everyone. So, I just wanted to ask about those ramps deals that you talked about.

    Just wondering if you could quantify how much those deals would have added to billings in Q2 if they were normal deals versus ramping over time. And also, are customers contracted to spend a certain amount that was deferred, or can they still back out of that ramped piece of it? Thanks.

    謝謝。大家下午好。所以，我只想問問你談到的那些坡道交易。

    只是想知道如果這些交易是正常交易而不是隨著時間的推移逐漸增加，您是否可以量化這些交易在第二季度會增加多少訂閱金額。而且，客戶是否簽訂了一定金額的延期消費合同，或者他們仍然可以退出那部分增加的費用？謝謝。

    Remo Canessa -- Chief Financial Officer

    Yeah. So, they're contractually obligated to the ramps, and the ramps are strategic. You know, as Jay talked about, with large deployments, you know, we are seeing more ramps. The impact on billings, probably a couple of percentage points is what you can think.

    But again, you know, with large customers, large deployments buying more of our pillars, you know, ramps were more in Q2.

    是的。因此，根據合同，他們對坡道負有義務，而坡道具有戰略意義。你知道，正如傑伊所說，隨著大規模部署，你知道，我們看到了更多的坡道。您可以想到對訂閱金額的影響，可能是幾個百分點。

    但是，你知道，隨著大客戶、大型部署購買更多我們的支柱，你知道，第二季度的增長更多。

    Jay Chaudhry -- Founder, Chairman, and Chief Executive Officer

    If I may add, I mean, if you look at it -- at this as a strategic investment on our part to help customers get started and actually manage their cash or investments in year one by deferring some of that stuff to future years.

    如果我可以補充一點，我的意思是，如果你看一下 - 將其視為我們的一項戰略投資，通過將其中一些東西推遲到未來幾年來幫助客戶在第一年開始並實際管理他們的現金或投資。

    Andrew Nowinski -- Wells Fargo Securities -- Analyst

    Understood. Thank you. 

    Operator

    Thank you. Please stand by for our next question. Our next question comes from the line of Alex Henderson with Needham and Company. Your line is open.

    Alex Henderson -- Needham and Company -- Analyst

    Great. Thank you so much. So, I was actually interested in asking about the ramps as well. But I also wanted to put it in context to the duration in the calculated billings numbers.

    Can you give us some sense of the magnitude of each of those? I guess a couple of percent on the ramps. But if I look at the ramps, don't you get all of that back in a couple of quarters once they get past the initial start date? So, isn't that actually just a timing issue?

    太感謝了，我實際上也有興趣詢問坡道。但我也想將其與計算的訂閱金額數字中的持續時間聯繫起來。

    你能告訴我們每一個的重要性嗎？我猜坡道上有幾個百分點。但是，如果我看一下坡道，一旦他們過了最初的開始日期，你不會在幾個季度內收回所有這些嗎？那麼，這實際上不只是一個時間問題嗎？

    Remo Canessa -- Chief Financial Officer

    Yeah, I mean, you're absolutely right, Alex. I mean that the ramps are a timing issue. You know, lower billings upfront and higher billings later, you know, based on the ramp. You know, related to the billing duration, you know, there was -- it was slightly favorable in Q2.

    If you look at our billings - calculated billings, they're 34% short-term billings. We're 32%. You know, that's generally what you can think about the favorableness related to the billing duration.

    是的，我的意思是，你完全正確，亞歷克斯。我的意思是坡道是一個時間問題。你知道，根據坡道，前期費用較低，以後費用較高。你知道，與計費持續時間相關，你知道，在第二季度有一點有利。

    如果您查看我們的訂閱金額- 計算的訂閱金額，它們是 34% 的短期訂閱金額。我們是 32%。您知道，這通常是您可以考慮的與計費期限相關的優惠。

    Alex Henderson -- Needham and Company -- Analyst

    Great. Thank you.

    Operator

    Thank you. Please stand by for our next question. Our next question comes from the line of Roger Boyd with UBS. Your line is open.

    Roger Boyd -- UBS -- Analyst

    Hey, thanks for taking the questions. Well, if I could poke at the efficiency versus capacity debate, I know you reiterated the $5 billion long-term goal and, Jay, your confidence in the market opportunity. But if you do see conditions improve, how do you think about sales capacity heading into fiscal '24 and your ability to accelerate growth at an agile pace? Thanks.

    嘿，謝謝接受提問。如果我可以談談效率與容量的爭論，我知道你重申了 50 億美元的長期目標，傑伊，你對市場機會充滿信心。但是，如果您確實看到情況有所改善，您如何看待進入 24 財年的銷售能力以及您以靈活的速度加速增長的能力？謝謝。

    Remo Canessa -- Chief Financial Officer

    Yeah, and that's a great question. We are a growth company. You know, we feel that the market opportunity is huge. You know, $5 billion still, you know, what we are shooting for.

    You know, we saw this as -- you know, based on the comments that I made, we've increased our headcount almost 100% over an 18-month period. And we saw basically inefficiencies in our organization. That's why we're doing this cost optimization. Having said that, you know, our selling capacity remains very strong, and we continue -- we are going to continue to invest in our selling capacity as we go forward into the second half.

    So, we are going to moderate hiring throughout the company, but our focus is still selling capacity and R&D development.

    是的，這是一個很好的問題。我們是一家成長型公司。你知道，我們覺得市場機會是巨大的。你知道，還有 50 億美元，你知道，我們的目標是什麼。

    你知道，我們認為這是—你知道，根據我發表的評論，我們在 18 個月內增加了近 100% 的員工人數。我們發現我們的組織基本上效率低下，這就是我們進行成本優化的原因。話雖如此，你知道，我們的銷售能力仍然非常強勁，我們將繼續——我們將在進入下半年時繼續投資於我們的銷售能力。

    因此，我們將在整個公司範圍內適度招聘，但我們的重點仍然是銷售能力和研發發展。

    Jay Chaudhry -- Founder, Chairman, and Chief Executive Officer

    Yeah, so we are still selectively going to hire quota-carrying sales reps, as well as core engineering leaders -- sorry, core engineering team members. And we expect our year-end headcount to be higher than the headcount today.

    是的，所以我們仍然有選擇地聘請配額銷售代表，以及核心工程領導——抱歉，核心工程團隊成員。我們預計我們的年終人數將高於今天的人數。

    Roger Boyd -- UBS -- Analyst

    Perfect. Thank you.

    Operator

    Thank you. Please stand by for our next question. Our next question comes from the line of Joel Fishbein with Truist. Your line is open.

    Joel Fishbein -- Truist Securities -- Analyst

    Thank you for taking my question. Hey, Remo, just on the billings guidance, if you could, just give us a characterization of how you would give -- you know, say, was it conservative? Is it based on what you're seeing today and getting worse -- the environment getting worse? Getting a lot of questions on that. Be happy -- hopefully, give any color you have on that. Thank you.

    謝謝你接受我的問題。嘿，雷莫，就比林斯指導而言，如果可以的話，請給我們描述一下你將如何給予——你知道，比如說，它是保守的嗎？它是基於你今天所看到的並且變得更糟——環境變得更糟了嗎？對此有很多疑問。開心點——希望能給它塗上任何顏色。謝謝。

    Remo Canessa -- Chief Financial Officer

    Yeah, let me -- thanks for asking the question, Joel. So, there was an elongation of the sales cycle. So, we're basically baking into that to our second half. You know, slightly worse, not a lot, but slightly worse than what we saw in Q2.

    So, a little more conservatism, you know, related to our billings guidance than past.

    是的，讓我——謝謝你提出這個問題，喬爾。因此，銷售週期延長了。所以，我們基本上是在下半年將其融入其中。你知道，稍微差一點，不是很多，但比我們在第二季度看到的要差一點。

    因此，與過去相比，與我們的訂閱金額指南相關的保守主義要多一些。

    Jay Chaudhry -- Founder, Chairman, and Chief Executive Officer

    Yeah. And we are assuming that current levels of these scrutinies will continue.

    是的。我們假設這些審查的當前水平將繼續。

    Joel Fishbein -- Truist Securities -- Analyst

    Thank you very much. Appreciate it.

    Jay Chaudhry -- Founder, Chairman, and Chief Executive Officer

    Yeah.

    Operator

    Thank you. Please stand by for our next question. Our next question comes from the line of Patrick Colville with Scotiabank. Your line is open.

    Patrick Colville -- Scotiabank -- Analyst


    Hey, team. Thank you for taking my question. So, I guess I'd like to ask about the sales changes that we discussed last quarter on the call. You know, is the slowdown we're seeing, you know, have any bearing on the sales changes that were made earlier in the fiscal year, or has that process been kind of wrapped up and that's in the background now?

    嘿，團隊。謝謝你接受提問。所以，我想我想問一下我們上個季度在電話會議上討論的銷售變化。你知道，我們看到的經濟放緩是否對本財年早些時候所做的銷售變化有任何影響，或者這個過程是否已經結束並且現在處於後台？

    Jay Chaudhry -- Founder, Chairman, and Chief Executive Officer

    Patrick, as we discussed, we made changes to our enterprise segment, the lower end of the market segment at the start of the year, and we're [Inaudible] reports at your leaders. Those changes are behind us. They were done in Q1. They have no bearing on Q2 numbers.

    OK. So, the main thing we're seeing at the highest level is some of the macro conditions that are impacting the higher-end larger deals. Our -- the low end of the market segments, enterprise and commercial, they actually had done quite well. There's no impact there.

    帕特里克，正如我們所討論的那樣，我們在年初對我們的企業細分市場進行了更改，即市場細分的低端，我們正在 [聽不清] 向您的領導報告。這些變化已經過去了。它們是在第一季度完成的。它們與第二季度的數字無關。

    好的。因此，我們在最高層面看到的主要事情是一些影響高端大型交易的宏觀條件。我們的低端細分市場，企業和商業，他們實際上做得很好，那裡沒有影響。

    Patrick Colville -- Scotiabank -- Analyst

    OK. That's very clear. Thank you so much.

    Operator

    Thank you. Please stand by for our next question. Our next question comes from Saket Kalia with Barclays. Your line is open.

    Saket Kalia -- Barclays -- Analyst

    OK, great. Hey, guys. Thanks for taking my question here. Remo, maybe for you.

    Can we just dig into the ramp deals just a little bit more? And maybe specifically, are these deals that take multiple years to ramp up to their sort of normal run rate on average, or are these things that may come back in the next couple of quarters? And relatedly, are you assuming a similar mix of ramped deals in the second half as you think about the conservatism in that guide?

    太好了。大家好。感謝接受提問。雷莫，也許適合你。

    我們可以再深入研究一下斜坡交易嗎？也許具體來說，這些交易是需要多年時間才能平均達到正常運行率，還是這些交易可能會在接下來的幾個季度內恢復？與此相關的是，您是否在考慮該指南中的保守主義時假設下半年會出現類似的交易組合？

    Remo Canessa -- Chief Financial Officer

    So, you know, it's not multiple years. You know, it's shorter than that. Also related to what are we thinking of ramps in Q3 and the second half, similar to what we saw in Q2. You know, again, as we talked about, deals are getting bigger, buying more of our platform.

    It is a very -- it's a strategic, you know, buy for large companies. You know, regarding the architectures throughout there today, I mean, companies understand. They understand that they've got a problem. And, you know, for that, you know, these ramps do help us.

    I would expect it to continue about the same pace in Q3 and Q4.

    所以，你知道，這不是多年。你知道，它比那更短。也與我們對第三季度和下半年斜坡的看法有關，類似於我們在第二季度看到的情況。你知道，正如我們所說，交易金額越來越大，購買更多我們的平台。

    這是一個非常 - 這是一個戰略，你知道，為大公司購買。你知道，關於今天整個架構，我的意思是，公司理解。他們知道他們遇到了問題。而且，你知道，為此，你知道，這些斜坡確實幫助了我們。

    我希望它在第三季度和第四季度繼續保持大致相同的速度。

    Saket Kalia -- Barclays -- Analyst

    Very helpful. Thanks, guys.

    Operator

    Thank you. Please stand by for our next question. Our next question comes from the line of Matt Hedberg with RBC. Your line is open.

    Matt Hedberg -- RBC Capital Markets -- Analyst

    Great, guys. Thanks for taking my question. I just wanted to ask about linearity. It sounded like in your prepared remarks that January was worse than December.

    I'm curious, did those trends continue into February, i.e., was February worse than January? And is there any way to quantify sort of the impact of the deals that pushed out of the quarter?

    太好了，伙計們。感謝您接受提問。我只是想問一下線性度。在你準備好的發言中聽起來好像一月份比十二月份更糟糕。

    我很好奇，這些趨勢是否會持續到 2 月，即 2 月是否比 1 月更糟？是否有任何方法可以量化本季度推出的交易的影響？

    Remo Canessa -- Chief Financial Officer

    Yeah, I mean, some deals were certainly pushed into February. And February, again, some of the deals that we thought we'd do in January came through in February. You know, regarding linearity, overall linearity was actually better in Q2 versus Q1, but that's also a function of the elongation of the deals. So, that's why linearity is better.

    You know, going forward, I would expect -- you know, back-end loaded linearity as we've seen in the last few quarters, I really don't see that changing.

    是的，我的意思是，一些交易肯定會推遲到 2 月份。 2 月份，我們原以為我們會在 1 月份完成的一些交易在 2 月份實現了。你知道，關於線性，第二季度的整體線性實際上比第一季度更好，但這也是交易延長的函數。所以，這就是線性更好的原因。

    你知道，展望未來，我希望——你知道，正如我們在過去幾個季度看到的那樣，後端加載線性度，我真的沒有看到改變。

    Matt Hedberg -- RBC Capital Markets -- Analyst

    Thank you.

    Operator

    Thank you. Please stand by for our next question. Our next question comes from the line of Mike Walkley with Canaccord. Your line is open.

    Mike Walkley -- Canaccord Genuity -- Analyst

    Great. Thanks. Remo, I guess with new customer pipeline taking longer to close, it seems like upsell is going to be maybe even greater mix over the intermediate term. Can you share with us maybe how that mix changes over the implied guidance for the remainder of the fiscal year?

    偉大的。謝謝。 Remo，我想隨著新客戶渠道的關閉需要更長的時間，看起來追加銷售在中期可能會更加混合。您能否與我們分享這種組合如何改變本財年剩餘時間的隱含指導？

    Remo Canessa -- Chief Financial Officer

    Yeah, that's a great question. If you recall, in Q1, it was about 50-50.

    是的，這是一個很好的問題。如果你還記得，在第一季度，它大約是 50-50。

    Jay Chaudhry -- Founder, Chairman, and Chief Executive Officer

    That's right.

    Remo Canessa -- Chief Financial Officer

    And we said we felt, you know, on -- for the year, it's going to go more in the 60-40 upsell versus new. In Q2, it was about 35% new and 65% upsell. From my perspective, I think, for this year, I think 60-40 is still the right metric to think about, 64 -- 60% upsell and 40% new.

    我們說，我們感覺，你知道，今年，60-40 的追加銷售與新的相比會更多。在第二季度，大約有 35% 的新品和 65% 的追加銷售。從我的角度來看，我認為，對於今年，我認為 60-40 仍然是值得考慮的正確指標，64—60% 的追加銷售和 40% 的新銷售。

    Mike Walkley -- Canaccord Genuity -- Analyst

    OK. Thank you.

    Operator

    Thank you. Please stand by for our next question. Our next question comes from the line of Keith Bachman with BMO. Your line is open.

    Keith Bachman -- BMO Capital Markets -- Analyst

    Hi. Good evening. Good afternoon. Many thanks.

    I wanted to ask about if you look at the phased deals and/or just the general economic backdrop, is there a change in pricing? In other words, are more customers asking for relief in terms of pricing? And related to that, Remo, I know you've talked about the billings and you're assuming some -- more conservative or things can get worse. But if I look at the billings guide, is, in fact, billings are down 9% sequentially in the April quarter. In order to make the annual guide, the sequential growth in July quarter is 50% or higher. And that's roughly equal to or above the sequential growth of the last three years.

    So, I'm just struggling a little bit to understand why the billings guide, we should think there's basically some room, if you will, when I look at the Q4. It just seems like you're asking a lot for Q4.

    你好。晚上好。下午好。非常感謝。

    我想問一下，如果您查看分階段交易和/或僅查看總體經濟背景，定價是否有變化？換句話說，是否有更多客戶要求在定價方面有所緩解？與此相關的是，Remo，我知道你已經談到了賬單，並且你正在假設一些 - 更保守或者事情會變得更糟。但如果我看一下賬單指南，實際上，賬單在 4 月份季度環比下降了 9%。為了做出年度指南，7 月季度的環比增長為 50% 或更高。這大致等於或高於過去三年的連續增長。

    所以，我只是在努力理解為什麼訂閱金額指南，我們應該認為基本上有一些空間，如果你願意的話，當我看到第四季度時。看起來你對第四季度的要求很高。

    Jay Chaudhry -- Founder, Chairman, and Chief Executive Officer

    Yeah, I would start on the pricing pressure discount you talked about and Remo can get into the billing part of it. So, due to a tighter macroenvironment, there is increasing scrutiny and pressure on CIOs this year. Now, customers are negotiating order over payment and deal terms. But customers do view us as one of the most mission-critical service, and they want to make sure they buy the service that works, the service they can depend upon.

    So, they're not looking for the cheapest solution. So, from that point of view, I would say we aren't seeing tremendous pressure on discounting. We're seeing some focus on it. And to help that, that's where some of the ramped deals come in to help lower the first year cost for the customer to manage their spend.

    But being strategic, being -- dealing at the right level, and actually delivering a lot of ROI value, that reduces pressure on us from pricing point of view.

    是的，我會從你談到的定價壓力折扣開始，Remo 可以進入其中的計費部分。因此，由於宏觀環境趨緊，今年對 CIO 的審查和壓力越來越大。現在，客戶正在就付款和交易條款協商訂單，但客戶確實將我們視為最關鍵的服務之一，他們希望確保他們購買的是有效的服務，他們可以依賴的服務。

    因此，他們並不是在尋找最便宜的解決方案。因此，從這個角度來看，我想說我們沒有看到折扣方面的巨大壓力。我們看到一些關注它。為了幫助實現這一點，這就是一些大量交易的用武之地，以幫助降低客戶管理支出的第一年成本。

    但具有戰略意義，在正確的水平上進行交易，並實際提供大量的投資回報率價值，這從定價的角度減輕了我們的壓力。

    Remo Canessa -- Chief Financial Officer

    Yeah. So, if you look at the average we've had in the second half, sequentially from Q3 to Q4, it's been in the 48%, 49% range, but we've gotten our guidance at 46% at the midpoint.

    是的。所以，如果你看看我們下半年的平均水平，從第三季度到第四季度，它一直在 48%、49% 的範圍內，但我們在中點得到了 46% 的指導。

    Keith Bachman -- BMO Capital Markets -- Analyst

    OK. All right. Thank you.

    Operator

    Thank you. Please stand by for our next question. Our next question comes from the line of Jonathan Ruykhaver with Cantor. Your line is open.

    Jonathan Ruykhaver -- Cantor Fitzgerald -- Analyst

    Yeah. Hi. Thanks. So, Jay, I'm wondering if you can talk in more detail on the adoption trends you're seeing around cloud workload protection and what those initial lens look like from a deal size perspective relative to the ZIA and ZPA.

    And also, just touch on the go to market, are all reps equipped to sell that solution today? Is there an initial overlaying strategy? Thanks.

    是的。你好。謝謝。所以，傑伊，我想知道你是否可以更詳細地談談你在雲工作負載保護方面看到的採用趨勢，以及從交易規模的角度來看，相對於 ZIA 和 ZPA，這些初始鏡頭是什麼樣子的。

    而且，只要觸及上市，今天所有的代表都準備好銷售該解決方案了嗎？是否有初始疊加策略？謝謝。

    Jay Chaudhry -- Founder, Chairman, and Chief Executive Officer

    Thank you. Our overall adoption of cloud workflows product is pretty good as planned. And as customers are launching more and more workflows, they have two options, either they extend their corporate network just like a branch network to every cloud region and put virtual firewalls there, or they do zero trust architecture with Zscaler. So, these products are primarily sold to our customers.

    Our customers understand the value of it, and actually really embracing it. Now, those initial deals are smaller, customers are growing, and there are some large deals. But a majority of the deals start small and customers start buying into it. They largely end up doing the same thing, just like ZIA for users, ZPA for users, and there's a ZIA for workloads, ZPA for workloads.

    That's where we believe the opportunity for us is significant. In terms of go to market, all reps are equipped to sell it, but we also understand that there are a bunch of nuanced discussions in this area. So, we do have product specialists. This not overlay sales team.

    These product specialists are experts in this area, and they do help in the sales process. And, Remo, overall, we are expecting the emerging products, too.

    謝謝。我們對雲工作流產品的整體採用按計劃進行得非常好。隨著客戶推出越來越多的工作流程，他們有兩種選擇，要么像分支網絡一樣將公司網絡擴展到每個雲區域並在那裡放置虛擬防火牆，要么使用 Zscaler 進行零信任架構。因此，這些產品主要出售給我們的客戶。

    我們的客戶了解它的價值，並且真正地接受它。現在，那些最初的交易規模較小，客戶在增長，並且有一些大交易。但大多數交易都是從小規模開始，客戶開始購買。他們基本上最終做同樣的事情，就像 ZIA 用於用戶，ZPA 用於用戶，還有一個 ZIA 用於工作負載，ZPA 用於工作負載。

    這就是我們認為機會對我們來說意義重大的地方。在進入市場方面，所有代表都準備好出售它，但我們也知道在這方面有很多細微的討論。所以，我們確實有產品專家。這不是覆蓋銷售團隊。

    這些產品專家是該領域的專家，他們確實在銷售過程中提供幫助。而且，雷莫，總的來說，我們也期待新興產品。

    Remo Canessa -- Chief Financial Officer

    Yeah, emerging products still tracking to high teens of total new and upsell.

    是的，新興產品的總新品和追加銷售量仍處於高位。

    Jonathan Ruykhaver -- Cantor Fitzgerald -- Analyst

    Thank you.

    Operator

    Thank you. Please stand by for our next question. Our next question comes from the line of Gabriela Borges with Goldman Sachs. Your line is open.

    Gabriela Borges -- Goldman Sachs -- Analyst

    Hi. Good afternoon. Thank you. Jay, I wanted to ask you on the market opportunity for best of breed.

    With Zscaler now having over 30% of the Global 2000, how do you think about the risk that the enterprises that care most about best-of-breed are essentially already Zscaler customers? In other words, where do you think the ceiling is to that G 2000 penetration rate? And are you getting feedback from, let's say, the next set of base-offs that perhaps they don't care as much about best-of-breed technology? How do you think about that? Thank you.

    你好。下午好。謝謝。傑伊，我想問問你關於最佳品種的市場機會。

    Zscaler 現在擁有超過 30% 的全球 2000 強企業，您如何看待最關心同類最佳的企業基本上已經是 Zscaler 客戶的風險？換句話說，您認為 G 2000 滲透率的上限在哪裡？比方說，您是否從下一組基礎設施那裡得到反饋，也許他們不太關心同類最佳技術？你怎麼看？謝謝。

    Jay Chaudhry -- Founder, Chairman, and Chief Executive Officer

    Next [Inaudible] I'm sorry. Can you expand the last part again?

    接下來 [聽不清] 對不起。你能再擴展最後一部分嗎？

    Gabriela Borges -- Goldman Sachs -- Analyst

    Yeah, essentially, the deals that you're competing for today, are you getting any signs of feedback from customers saying, we know you're best of breed, but we're not going to prioritize you?

    是的，基本上，您今天競爭的交易，您是否從客戶那裡得到任何反饋的跡象，我們知道您是同類產品中的佼佼者，但我們不會優先考慮您？

    Jay Chaudhry -- Founder, Chairman, and Chief Executive Officer

    Yeah, our customers are not looking for best-of-breed point products. They're looking for best-of-breed platform with the right architecture. I can tell you, if -- when you talk with a low end of the market, they can kind of live with some of the solutions that are kind of half-baked. But when you talk about Global 2000, these customers are generally pretty savvy.

    The requirements are complicated. And we believe the best architecture will win in the long term. I gave you an example this time where a large retailer can hack on different ways, thinking that a firewall-based architecture work, tried, failed, and came back. I expect to see a lot more customers do the same thing.

    I think we have ample opportunity in the Global 2000 to take our current penetration to a much, much higher level.

    是的，我們的客戶並不是在尋找同類最佳的單點產品。他們正在尋找具有正確架構的同類最佳平台。我可以告訴你，如果 - 當你與低端市場交談時，他們可以接受一些半生不熟的解決方案。但是當你談到 Global 2000 時，這些客戶通常都非常精明。

    要求很複雜。我們相信，從長遠來看，最好的架構將獲勝。這次我給你舉了一個例子，一個大型零售商可以用不同的方式進行攻擊，認為基於防火牆的架構是有效的，嘗試過，失敗了，然後又回來了。我希望看到更多的客戶做同樣的事情。

    我認為我們在全球 2000 強中有足夠的機會將我們目前的滲透率提高到更高的水平。

    Gabriela Borges -- Goldman Sachs -- Analyst

    Thank you.

    Operator

    Thank you. Please stand by for our next question. Our next question comes from the line of Peter Levine with Evercore. Your line is open.

    Peter Levine -- Evercore ISI -- Analyst

    Great. Thanks, guys, for squeezing me in here. So, maybe just to piggyback off on an earlier question around upsells versus net news, so it seems like you're able to kind of somewhat toggle your sales force to maybe focus more on those back-to-base opportunities. So, what -- are you changing your incentives, comp plans at all to, I guess, better incentivize your sales force to focus more on those back-to-base opportunities? And then second, the ones that you are seeing a better upsell, like what product is having the highest take rate? Thanks.

    偉大的。謝謝把我擠進來。所以，也許只是為了解決之前關於追加銷售與網絡新聞的問題，所以看起來你可以在某種程度上改變你的銷售隊伍，也許可以更多地關注那些回到基地的機會。那麼，你是在改變你的激勵措施、薪酬計劃，以更好地激勵你的銷售人員更多地關注那些返廠機會嗎？其次，那些你看到更好的追加銷售的產品，比如什麼產品的採用率最高？謝謝。

    Jay Chaudhry -- Founder, Chairman, and Chief Executive Officer

    So, we aren't really making any special changes to upsell versus new logo. This has been asked to us many times over the years. Do we have a special incentive for new logos? Not really. Our platform is very broad and vague, so we really -- we want new logos and we want expansion.

    In expansion, we know that expansion means upsell is a little bit easier than new logos. That's why you're seeing some of the upsell numbers going up this quarter as compared to new logos. Now, we keep on making refinements to our go-to-market structure and model from time to time, but there's nothing significant we have done now to make any changes. I think one of the best thing is we have a very good sales organization.

    Our architecture is very good. Our deployments are very good. That's why customers come back and rave about us. I mean, talking to so many customers, they believe we have the best service, best architecture, and best security.

    That's why we win. And I think we'll keep on driving it. But in today's market, we expect upsell numbers to stay high because it's a bit easier as compared to a new logo.

    因此，我們並沒有真正對追加銷售與新徽標進行任何特殊更改。這些年來，我們已經多次被問到這個問題。我們對新徽標有特別的獎勵嗎？並不真地。我們的平台非常廣泛和模糊，所以我們真的——我們想要新的標誌，我們想要擴展。

    在擴展中，我們知道擴展意味著追加銷售比新徽標更容易一點。這就是為什麼你會看到本季度的一些追加銷售數字與新徽標相比有所上升。現在，我們不斷地對我們的上市結構和模型進行改進，但我們現在沒有做任何重大改變。我認為最好的事情之一是我們有一個非常好的銷售組織。

    我們的架構非常好。我們的部署非常好。這就是為什麼客戶回來並對我們贊不絕口的原因。我的意思是，與這麼多客戶交談後，他們相信我們擁有最好的服務、最好的架構和最好的安全性。

    這就是我們獲勝的原因。我認為我們會繼續推動它。但在今天的市場上，我們預計追加銷售數字會保持高位，因為與新徽標相比，它更容易一些。

    Peter Levine -- Evercore ISI -- Analyst

    And then which products are getting the biggest take rate?

    那麼哪些產品的採納率最高？

    Jay Chaudhry -- Founder, Chairman, and Chief Executive Officer

    Oh, sorry. Which product? Yes. So, if you look at almost every Zscaler customer has ZIA. OK.

    ZPA can be a starting point, but that's not common. But more and more, the customers are starting with ZIA, ZPA, or ZDX. But there's still a sizable install base that has ZIA. Now, ZIA and ZPA together in a higher end, they'll be close to 60% [Inaudible] That means so many customers have ZIA and ZPA both.

    There's an upsell opportunity on ZPA. There's an upsell opportunity within bundles. Now, a lot of these customers have bought business. They moved to transformation.

    From transformation, there's a big opportunity for us to sell data protection. Data protection, especially advanced data protection, is very much on the mind of large corporations, and there's a lot of old stuff selling from Symantec 1, 2, and some of the McAfee stuff. And when you deploy Zscaler, you can't be really sitting with the old-school DLP technology. Data protection is a big opportunity for us.

    If there's one other product I would highlight, it is ZDX. Digital experience is one of the favorite services of CIOs and head of networking because when someone is coming from some homes, some coffee shop, some hotel, when things are slow, customers struggle to figure out. ZDX has become very sophisticated to help them pinpoint issues and take care of them. User experience is becoming more and more important.

    And it's this highly, highly differentiated service that we offer. Did I answer your question?

    哦對不起。哪個產品？是的。所以，如果你看看幾乎每個 Zscaler 客戶都有 ZIA。好的。

    ZPA 可以作為起點，但這並不常見。但越來越多的客戶開始使用 ZIA、ZPA 或 ZDX。但是仍然有相當大的安裝基礎具有 ZIA。現在，ZIA 和 ZPA 一起處於更高端，它們將接近 60% [聽不清] 這意味著很多客戶同時擁有 ZIA 和 ZPA。

    ZPA 有追加銷售的機會。捆綁包中有追加銷售的機會。現在，這些客戶中有很多已經購買了業務。他們轉向轉型。

    從轉型中，我們有很大的機會出售數據保護。數據保護，尤其是高級數據保護，是大公司非常關心的問題，Symantec 1、2 和一些 McAfee 的產品有很多舊產品在銷售。當您部署 Zscaler 時，您不能真正使用老式 DLP 技術。數據保護對我們來說是一個巨大的機遇。

    如果還有其他產品我要強調，那就是 ZDX。數字體驗是 CIO 和網絡負責人最喜歡的服務之一，因為當有人來自某些家庭、咖啡店、酒店時，當事情進展緩慢時，客戶很難搞清楚。 ZDX 已經變得非常成熟，可以幫助他們查明問題並解決問題。用戶體驗變得越來越重要。

    我們提供的正是這種高度、高度差異化的服務。我回答你的問題了嗎？

    Peter Levine -- Evercore ISI -- Analyst

    Perfect. Yes. Thank you very much.

    Jay Chaudhry -- Founder, Chairman, and Chief Executive Officer

    Thank you.

    Operator

    Thank you. Please stand by for our next question. Our next question comes from a line of John DiFucci with Guggenheim. Your line is open.

    John DiFucci -- Guggenheim Partners -- Analyst

    Thank you. You said that EMEA grew strongly year over year, but was it the kind of growth you thought it would be? Because the reason I ask is that our checks in the region were -- they were pretty mixed and your revenue growth decelerated in the region. And given the recurring model of revenue is usually a lagging indicator, I get that. But I guess the answer to that question and how do you expect the region to progress for -- going forward? Is there any reason that region might be more competitive?

    謝謝。你說 EMEA 同比增長強勁，但它是你認為的那種增長嗎？因為我問的原因是我們在該地區的支票是 - 它們非常複雜，並且您在該地區的收入增長放緩。鑑於經常性收入模型通常是一個滯後指標，我明白了。但我猜這個問題的答案是什麼？你希望該地區如何取得進展 - 向前發展？有什麼理由認為該地區可能更具競爭力嗎？

    Jay Chaudhry -- Founder, Chairman, and Chief Executive Officer

    I'll start and Remo can add things to it. This quarter, EMEA had less dependency on large deals. OK. And as you know, large deals are getting more scrutiny.

    And U.S. was, relatively speaking, weaker because they had higher dependency on large deals. Remo, you want to add any more?

    我會開始，Remo 可以添加內容。本季度，EMEA 對大型交易的依賴程度有所降低。好的。如您所知，大宗交易正受到更嚴格的審查。

    相對而言，美國較弱，因為他們對大型交易的依賴程度更高。雷莫，你還想補充嗎？

    Remo Canessa -- Chief Financial Officer

    Yeah, I mean, you're right, John. I mean, revenue is a lagging indicator. And our new and upsell business, you know, it was one of our strongest, if not our strongest deal. So, EMEA did do well.

    是的，我的意思是，你是對的，約翰。我的意思是，收入是一個滯後指標。我們的新業務和追加銷售業務，你知道，即使不是我們最強大的交易，也是我們最強大的交易之一。因此，EMEA 表現不錯。

    John DiFucci -- Guggenheim Partners -- Analyst

    OK.

    Jay Chaudhry -- Founder, Chairman, and Chief Executive Officer

    And if there's another color I could give you on the market vertical kind of stuff. You know, there are certain verticals that did better than others. As you would expect, the tech vertical was weak in today's market.

    如果有另一種顏色，我可以給你市場上垂直的東西。你知道，有些垂直領域比其他領域做得更好。正如您所預料的那樣，技術垂直領域在當今市場上表現不佳。

    John DiFucci -- Guggenheim Partners -- Analyst

    OK.

    Jay Chaudhry -- Founder, Chairman, and Chief Executive Officer

    And some of the retail and all was a little bit slower.

    一些零售店和所有零售店的速度都慢了一點。

    John DiFucci -- Guggenheim Partners -- Analyst

    But that would be more for the U.S., right Jay? The tech vertical?

    但這對美國來說更重要，對吧傑伊？技術垂直？

    Jay Chaudhry -- Founder, Chairman, and Chief Executive Officer

    For the U.S. That's correct. That's correct.

    對於美國來說，這是正確的。這是正確的。

    John DiFucci -- Guggenheim Partners -- Analyst

    OK. Got it. OK. Thanks a lot, guys.

    Operator

    Thank you. Please stand by for our next question. Our next question comes from the line of Shaul Eyal with Cowen. Your line is open.

    Shaul Eyal -- Cowen and Company -- Analyst

    Thank you. Good afternoon, guys. Jay or Remo, one of the topics de jure in recent quarters is cloud-related costs. Or in other words, some enterprise customers are indicating that some of the cost benefits they have subscribed to under the big cloud promise in recent years, at times, that is not living up to their expectations.

    So, interested to learn whether your customers have been bringing up that point in recent discussions.

    謝謝。下午好，伙計們。 Jay 或 Remo，最近幾個季度的法定話題之一是與雲相關的成本。或者換句話說，一些企業客戶表示，他們近年來在大雲承諾下訂閱的一些成本效益有時並沒有達到他們的期望。

    因此，有興趣了解您的客戶是否在最近的討論中提出了這一點。

    Remo Canessa -- Chief Financial Officer

    Had a hard time hearing you, Shaul. So, if you might -- I think we've caught something about maybe hyperscaler and [Inaudible] perhaps if you could repeat that.

    很難聽到你的聲音，Shaul。所以，如果你可以 - 我想我們已經抓住了一些關於超大規模和[聽不清]的東西，如果你可以重複的話。

    Shaul Eyal -- Cowen and Company -- Analyst

    Yeah. No. So, I was asking whether some customers have been bringing up maybe some disappointment with the overall promise as it relates to cloud-related costs. Is that a topic that has been brought up in recent discussions with your customers?

    是的。不，所以，我問一些客戶是否對與雲相關的成本相關的整體承諾感到失望。這是最近與您的客戶討論時提出的話題嗎？

    Jay Chaudhry -- Founder, Chairman, and Chief Executive Officer

    Yeah. So, let me share with you lots of conversations I have. Customers are embracing cloud. OK.

    There's no -- somebody is not saying I'm going to come back or not embrace the cloud. That's point number one. Point number two, the speed at which these guys are moving forward is slowing down, you can expect, because some of these large software development projects are slowing down for cost reasons. Number three, that's actually creating an interesting phenomenon whereby customers aren't able to use all the spend that's committed.

    OK. That's actually giving us an opportunity where we are actually partnering more closely with some of these hyperscalers where our deals can be part of that customer commit because we are as an approved partner for some of that cloud spend. So, those are some of the things we are seeing. But overall, we do see -- it's rare to find a CIO that says I don't like cloud anymore.

    Are there complaints about costs in the cloud? Yes. Do they see an alternate to go back to the data center? No.

    是的。因此，讓我與您分享我的許多對話。客戶正在擁抱雲。好的。

    沒有 - 有人沒有說我會回來或不擁抱雲。這是第一點。第二點，這些人前進的速度正在放緩，你可以預料，因為其中一些大型軟件開發項目出於成本原因正在放緩。第三，這實際上創造了一個有趣的現象，即客戶無法使用所有承諾的支出。

    好的。這實際上給了我們一個機會，讓我們實際上與其中一些超大規模企業更緊密地合作，我們的交易可以成為客戶承諾的一部分，因為我們是其中一些雲支出的認可合作夥伴。所以，這些就是我們所看到的一些事情。但總的來說，我們確實看到了——很少有 CIO 說我不再喜歡云了。

    是否有人抱怨雲中的成本？是的。他們是否看到了返回數據中心的替代方案？不。

    Shaul Eyal -- Cowen and Company -- Analyst

    Thank you so much for that, Jay. Appreciate it.

    Operator

    Thank you. Ladies and gentlemen, due to the interest of time, that concludes our Q&A session. I would now like to turn the call back over to Jay for closing remarks.

    Jay Chaudhry -- Founder, Chairman, and Chief Executive Officer

    Thank you for your continued interest in Zscaler. We look forward to seeing you at some of the upcoming conferences. Thank you again.

    Remo Canessa -- Chief Financial Officer

    Thank you.

    附註：SaaS 公司會計定義

    Bookings 簽約合同金額

    Booking 指的是 SaaS 公司與潜在客戶簽署的一定期限的合同金額，也就是客戶承諾支付給服務提供商的資金額

    Billings 訂閱付費金額

    Bookings 只是帳面上的收入，Billings 則是 SaaS 公司實際向客戶收取的資金，例如有的客戶訂閱採月付費，有的採用年付費，月付費是每月繳納訂閱費，年付費則一次性預先就繳足 1 年的訂閱費。

    距離來說，某 SaaS 公司有 2 個客戶，客戶 A 的 1 月 bookings 爲 $14,400，A 客戶是年付費，當月繳足了 1 年、12 個月，每月 $1200 的訂閱費，但服務從 2 月開始起算。

    若客戶 B 是月付費、每月 $500，簽署兩年合約金額高達 $12,000，該 SaaS 公司 1 月的 booking 高達 26,400 但 billings 為 $1,700。

    SaaS 公司的營收

    雖然 Billing 已到手，但收入確認要符合財務準則，即産品或服務已交付給客戶，就 SaaS 行業來說，每月服務成功交付後，才能認列當月營收。按照美國通用會計準則 GAAP 的規定，營收必須實際 “賺取” 後才能確認。

    以上述的範例來說，1 月 SaaS 公司的 bookings 爲 $26,400，其中 Billings 爲 $1,700，包括客戶 A 繳納 $1,200 以及客戶 B 的 $500，依據 GAAP 規定，客戶 A 雖然已支付了 1 年的訂閱費，但 A 客戶 2 月才開始提供服務，無法認列到 1 月的營收，客戶 B 支付的 $500 則是已提供服務的費用，因此，該公司1月的收入爲 $500。

    遞延收入

    遞延收入指的是實際已收取，但還無法認列爲收入的資金額，計算公式也很簡單，就是 billings 减去已認列的營收。








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