“We continue to partner closely with our key suppliers, leveraging our volume purchasing and extended supply commitments as we address the supply challenges and cost impacts, which we expect will continue into the second half of our fiscal 2022.”

In context

“se was up 37%, commercial was up 34% and public sector was up 20%. As you can see, it was broad strength across our geographies and customer markets. From a non-GAAP perspective, total gross margin came at 65.5%, down 140 basis points year-over-year. Product gross margin was 64.3%, down 230 basis points and service gross margin was 68.8%, up 90 basis points. The decrease in product gross margin was primarily driven by ongoing higher component costs related to supply constraints as well as higher freight and logistics costs. As we’ve been discussing for several quarters, we continue to manage through the supply constraints seen industry-wide by us and our peers due to component shortages, which have resulted in extended lead times and higher supply costs. The situation remains challenging. We continue to partner closely with our key suppliers, leveraging our volume purchasing and extended supply commitments as we address the supply challenges and cost impacts, which we expect will continue into the second half of our fiscal 2022. As I mentioned, the component supply constraints also slow the conversion of our strong demand into revenue. This has resulted in a substantial increase and continued build in our backlog levels well beyond our normal historical levels. Additionally, the ongoing supply constraints have not only impacted our ability to ship hardware but also impacts our delivery of software, such as subscriptions that customers order with the hardware. That undelivered software is also included in backlog until the hardware ships which is when we begin to recognize the revenue. Of course, this impacts our software revenue growth and other related metrics. To give you a sense of scale of our backlog, our Q2 ending product backlog was more than $14 billion, an increase of more than 150% year-on-year. Within”