“Although customers are very early in their evaluation and adoption of Gen 4, we expect this Gen 4 adoption will help drive our appliance growth rates ahead of the market growth rate.”

In context

“Nikesh Arora (CEO): Thank you, Clay. Good afternoon, everyone, and thank you for joining us today for our earnings call. In this time of increased macroeconomic volatility and geopolitical uncertainty, we saw a combination of strong cybersecurity market demand and our team's execution in line with our strategy to drive our Q3 financial results. We reported strong top line metrics with both billings and RPO growing 40% year-over-year. This is the highest billings growth we have reported looking back over the past four years and was driven both by strong demand for our next-generation security offerings and strong customer commitments to our network security business. In network security, we saw product again grow over 20% as we continue the transition to software. Customers continue to consolidate their network security to Palo Alto Networks as a result of the significant expansion in our subscription capabilities over the last several years. Our net security ARR ended Q3 at $1.61 billion, up 65% year-over-year. Our top line performance translated into non-GAAP operating income that grew ahead of revenue and enabled strong cash flow conversion. We were pleased that we were able to achieve these bottom line results despite challenges in the supply chain. Speaking of the global backdrop, whether it's supply chain, geopolitical conflict or rising interest rates and inflation, this environment is creating challenges for our customers and testing our execution. I'm pleased our teams have risen to the occasion and have shown strong execution across sales, operations and all areas that support the business. The trend that started with the pandemic and the widespread cyberattacks, the trend of network transformation, cloud transformation and fortifying one's infrastructure continues to be strong. Coupled with consolidation in cybersecurity, we expect this to continue to drive strength and growth for both the industry and us in particular given our unique three-platform approach. Of course, the events in Ukraine are on everyone's mind. We stand with the people of Ukraine against Russian aggression and have been working to provide direct cybersecurity support to Ukrainian organizations. This geography has not been significant for us in terms of revenue or our overall growth expectations. For this quarter and our most recent quarters, our combined Russia and Ukraine revenue was well below 1%. We have halted new sales in Russia and we're also complying with all government sanctions. Since December, we've deployed protection for over 3,400 new indicators of attack that defend organizations from disruptive and destructive Russian cyberattacks. As you might expect, we're seeing heightened interest from commercial and government customers in Europe around mitigating this nation-state activity. This ever-challenging threat landscape is driving broader and more strategic customer conversations. We continue to see our customers look for an elevated level of partnership and this is expanding our market opportunity. We continue to see success in consolidating share within the enterprise market, and this has become a core tenet of our growth strategy. We see evidence of this in our multi-platform sales with 48% of our Global 2000 customers having transacted now with us on all three of our major platforms of Strata, Prisma and Cortex. The number of million-dollar-deal transactions we signed was up 65% in Q3 and the average size of our million-dollar deals increased in the quarter. We also saw the number of $5 million deals increase by 73% year-over-year. Large deals are an important selling motion for us as we further penetrate Global 2000 customers with our second and third platforms. Innovation is the engine that underpins our growth in the market, which Gartner estimates will total over $250 billion in end-user spending by 2026. With the trend towards vendor consolidation in the market, customers appreciate our best-of-breed capabilities within each of our three platforms. This quarter, we added four additional categories to the recognition we received for our best-of-breed capabilities. Remember, they're all integrated into our three platforms. So the customer gets the benefit of our platforms as well as the individual best-of-breed capabilities which compete effectively against independent vendors in our industry. Forrester recognized our position in cloud workload security with a leader designation in their inaugural wave in this market, the only company to have that recognition. Early recognition of the importance of attack surface management, which we entered through the acquisition of Xpanse in 2020 was validated as we were recognized as an outperforming leader by GigaOm. We received strong performer designations from Forrester in two categories, incident response and EDR. I'll next provide you an update on our platforms and what progress we've made in the last quarter, starting with Prisma Cloud. We continue to see strong momentum driven by both new customers and notably for this quarter, large upsell and expansion commitments, which drove 25 deals north of $1 million. This growth in customers and existing customer expansion is evidenced in our credit consumption, which grew 50% year-over-year in Q3. We continue to drive cloud security leadership across the industry. And as I've said before, all Prisma Cloud customers are inherently customers of hyperscalers, yet they choose us. Customers are looking for a scaled, integrated cloud security platform that Prisma Cloud provides, enabling us to deliver high double-digit growth. Our customers are increasingly recognizing that operating securely in the cloud means ensuring that software written for the cloud is secure. This starts with the developer. Our early observation of this trend led us to acquire Bridgecrew in early 2021. We have been focused on building out a portfolio of offerings targeted at developers. This is our fifth pillar of Prisma Cloud. Cloud Code leverages all the existing capabilities of Prisma Cloud, including its approach to credit consumption, deployment and reporting. One quarter from release, we've seen success in six-figure commitments to Prisma Cloud driven by Cloud Code and this is amongst the fastest modules adopted in Prisma Cloud in terms of credit consumption. Critical to our developer strategy, we continue to see strong downloads of our Checkov open source offering, which reached over seven million in Q3. Moving on to Cortex. We are helping customers reimagine how they operate their security operation centers with automation and AI/ML at the core. Cortex customers grew over 60% in Q3, supported by multiproduct Cortex transactions in EMEA and the Americas. We achieved an important milestone in Q3 with approximately $500 million in Cortex ARR. In Q3, we saw strength in each of our established Cortex product areas with a record number of transactions for XDR and Xpanse and nearly that level of business with XSOAR. XDR continues to shine with industry awards and benchmarks. This quarter, XDR was recognized for 100% threat prevention and detection in the recent MITRE evaluation. Forrester also recognized the significant progress we have made with XDR in our series of releases over the last nine months, recognizing XDR as a strong performer in its EDR Wave. Our Xpanse performance, with transactions up well over 100% in the last 12 months, shows that attack surface management is now seeing an inflection in mainstream demand. After our recent limited releases of XSIAM, we are making progress in our goal to initiate co-design work with 10 partners and expect to be on track at the end of this quarter with our plans. XSIAM will ultimately enable us to achieve our Cortex vision around SOC automation, delivering what we expect to be a very unique value to our customers and disrupting the multibillion-dollar SIEM category by offering a modern alternative that leverages AI and ML. Moving on to SASE. Last week, we made a call to the industry to adopt ZTNA 2.0, which ushers in a new era of hybrid workforce security based on key zero trust principles like least privilege access, continuous trust verification and continuous security inspection across all apps. Our mantra for Prisma Access is to provide zero trust with zero exceptions. The pandemic has accelerated the adoption of SASE. In addition to significant traction from our installed base, we continue to see strong momentum from net new customers for whom Prisma SASE is their first significant purchase for us. These customers then become opportunities for incremental engagements across our other platforms. SASE saw particular success with large transactions in Europe as we signed 11 large transactions in EMEA, further reinforcing the global nature of SASE demand. SASE is in the early innings, and we're making significant investments to ensure we continue our momentum in this category. Moving on to Strata, our hardware and subscription services platform. For the third consecutive quarter, we delivered north of 20% product revenue growth. We saw strength across our portfolio, both hardware appliances and software form factors. As you're all aware, the industry is dealing with unprecedented supply chain issues, which are likely to persist for yet another year. Our team is deftly managing these with our partners, allowing us to maintain better lead times than some in the industry. We have seen instances where we are advantaged in having supply where competitors cannot timely deliver and we believe this has helped contribute to market share gains. We saw our momentum validated by third-party recognition of market share gains in both hardware and VM form factors. In hardware, Omdia recognized Palo Alto Networks as being #1 in market share for the appliance market with over 27% share, up more than 5 points year-over-year. In the VM market, according to Dell'Oro, we added 6 points of market share year-over-year and command nearly 34% of the market. We continue to execute on our Generation 3 to Generation 4 transition. We have now released nearly all Gen 4 appliance models. Although customers are very early in their evaluation and adoption of Gen 4, we expect this Gen 4 adoption will help drive our appliance growth rates ahead of the market growth rate. We're seeing strong uptake of advanced URL subscriptions and strong early demand for our new advanced threat prevention subscription. We released next-generation CASB last quarter and saw solid Q3 performance here. Lastly, we announced our second partnership with a hyperscaler to embed our network security into the fabric of their cloud. This is differentiated innovation that leverages our engineering scale, our market leadership position and relationships with hyperscalers. Cloud Next-Generation Firewall on AWS brings the combination of Palo Alto Networks' industry-leading network security in a cloud-native form factor and marries it with the ease of use of Amazon Web Services. This relationship with AWS follows the launch of Cloud IDS on the Google Cloud Platform last July. We expect Cloud Next-Generation Firewall will drive further growth of our Firewall as a Platform and specifically, our software form factors. It also gives customers another reason to standardize on our network security platform. Innovations like Cloud Next-Generation Firewall on AWS, Cloud IDS on Google Cloud and our licensing of security subscriptions to SaaS providers to protect their cloud applications are differentiators for us versus competitors that are primarily focused on the appliance form factor. Bringing it all together, we are very pleased with our Q3 results, where we saw exceptional top line growth. At the same time, even while growing faster, we are prioritizing investments and delivering on the profitability targets we committed during our September 2021 Analyst Day. We believe this is an important discipline, and we intend to maintain this focus on profitability targets while maximizing growth. We continue to see broadening demand for cybersecurity, which is enabling us to grow and invest from a position of strength. As we focus on our mission to be our customers' cybersecurity partner of choice for today and tomorrow, we also aspire to deliver to our shareholders outstanding returns as a proxy for growth of the cybersecurity opportunity as well as world-class execution. We are very pleased with the first three quarters we have delivered so far in fiscal year 2022. We look forward to updating you in three months on our plans to continue accelerated growth and balanced profitability while targeting GAAP profitability in the near future. With that, I will pass the call over to Dipak to talk about our results in more detail.”