“Revenue is to be in the range of $2.941 billion to $2.945 billion, an increase of 28% to 29%.”

In context

“Dipak Golechha (Chief Financial Officer): Thank you, Nikesh, and good afternoon, everyone. As Nikesh noted, our strong Q2 results reflect the consistent execution of our platformization strategy, coupled with a robust demand environment. The increasing adoption of our platforms is most evident in our next-generation security ARR, which grew 33% to $6.33 billion. This includes a $200 million contribution from our recent acquisition of Chronosphere. On an organic basis, NGS ARR was up 28% year-over-year and net new ARR was up 11% year-over-year. This performance was driven by an acceleration in SASE and software firewall ARR, alongside continued momentum in XSIAM. A key contributor to our software firewall growth in recent quarters is Prisma AIRS. As customers increase their AI deployments, they're looking for a trusted partner to secure this critical transformation. Prisma AIRS directly addresses this need, and as Nikesh mentioned, it is scaling rapidly with over 100 customers ending Q2. Our remaining performance obligation, or RPO, grew 23% to $16.0 billion. This includes approximately $150 million of RPO from our Chronosphere acquisition. It's important to note that RPO balances for Chronosphere can fluctuate from period to period given usage-based pricing with ARR and revenue being more representative of business performance. Our current RPO, which represents a near-term revenue realization, was $7.1 billion, representing 18% growth. Total revenue was $2.59 billion and grew 15%. Given the close of our Chronosphere acquisition came near the end of fiscal Q2, the revenue contribution was immaterial during the quarter. Product revenue was up 22% with 45% of the product revenue coming from software form factors over the trailing 12 months, which was up from 38% in the trailing 12 months ending Q2 '25. This was driven in part by strong demand for software firewalls as noted earlier. Our software growth was complemented by improving hardware demand led by the adoption of our latest Gen 5 firewall appliances and SD-WAN. Total services revenue grew slightly above 13%. Within this, subscription revenue was up 14%, while support revenue grew 12%. From a geographical perspective, we saw broad-based strength across all of our major theaters with the Americas growing 14%, EMEA growing 17%, and JPAC growing 17%. Moving further down the income statement, our disciplined focus on profitability and operational leverage continued to deliver strong results in Q2. Given the timing of the Chronosphere acquisition, the impact of this transaction to our P&L financials was immaterial. Our total gross margin for the quarter was 76.1%. Within this, product gross margin was 78.2%, an increase of 150 basis points year-over-year, driven by a higher software mix compared to last year. As noted earlier, we did see improvement in our hardware business during Q2. Therefore, on a sequential basis, the higher mix of hardware and product revenue resulted in a 180 basis point decrease to product gross margin versus Q1. The services segment delivered gross margin of 75.6%, down 100 basis points year-over-year. The year-over-year change in services gross margin reflects a positive mix shift towards our high-growth SASE offerings, which remain in the earlier part of their scaling curve. We continue to be pleased by the growth of our SASE offerings and remain focused on driving efficiencies here. Now turning to the supply chain, we observed a marginal impact on product COGS this quarter from higher memory and storage pricing, but we believe we are well positioned to manage through these dynamics. First, our high and growing software mix provides a natural hedge. Second, we will leverage our scale, deep supply chain expertise, and lessons learned through COVID and prior supply chain constraints. And third, pricing actions taking effect later this fiscal year will help offset corresponding cost increases. We have proactively factored these considerations into our Q3 and full year outlook. We delivered our third consecutive quarter of 30%-plus operating margins with Q2 operating margin of 30.3%, a 190 basis point expansion versus Q2 of last year. The strong expansion reflects our ability to drive consistent scale and efficiency across all OpEx line items. Our diluted non-GAAP EPS reached $1.03, which once again came in above the high end of our guidance. Q2 adjusted free cash flow was $502 million. On a trailing 12-month basis, we generated $3.75 billion in adjusted non-GAAP free cash flow, representing a margin of 37.9%. Our cash and cash equivalents for the period was $7.9 billion, reflecting a $2.6 billion cash consideration for the Chronosphere acquisition. Given the recent close of our CyberArk acquisition, we expect the $2.3 billion cash outlay in Q3. This results in a total combined cash outlay of $4.9 billion. In connection with our acquisition of CyberArk, we guaranteed the payment obligations on the CyberArk's convertible senior notes due 2030. The acquisition resulted in a make-whole fundamental change under the notes, and we will be making an offer to repurchase the notes in the coming days. We also issued 112 million shares in consideration for the CyberArk acquisition. Before I turn to guidance, I want to extend a warm welcome to the over 4,000 talented individuals from CyberArk and Chronosphere. We're thrilled to have them on board and excited to execute on our integration plans to unlock the full value of these acquisitions. Our focus is on a frictionless onboarding experience for our new colleagues. And within just the first few days, we've provided access to collaboration tools for every individual to work as one cohesive team. We remain confident in our ability to deliver significant scale and leverage across every line of each of our financial statements. From an operational standpoint, integration is being executed with the same rigor that we apply to running our core business. We've established clear governance, defined work streams across all functions, including IT, finance, HR, product, and go-to-market, and implemented measures to ensure continuity for customers, partners, and employees. Our priority is maintaining business momentum while methodically bringing platforms, reporting structures, and operating rhythms together. Taken together, we believe this disciplined approach to integration reinforces our confidence in delivering sustained growth and operating leverage, enabling us to achieve our target of 40% free cash flow margin by fiscal 2028, and our longer-term goal of $20 billion in NGS ARR by fiscal 2030. Now let me take you through the guidance. Please note that our Q3 and full-year 2026 guidance is inclusive of both the CyberArk and Chronosphere acquisitions, which have been aligned to our fiscal year and our definitions of certain non-GAAP metrics. This includes NGS ARR, which reflects only the subscription portion of CyberArk's ARR and has been conformed to our standard revenue-based definition. Our Q3 and full-year 2026 guidance assumes reported NGS ARR for CyberArk will be approximately 2% to 3% lower than the equivalent on the CyberArk previous bookings-based ARR definition. Please see the appendix of our earnings presentation for more detail on the comparison of the two ARR definitions. For the fiscal third quarter 2026, we expect NGS ARR to be in the range of $7.94 billion to $7.96 billion, an increase of 56%. This includes a $1.47 billion contribution from M&A, remaining performance obligation of $17.85 billion to $17.95 billion, an increase of 32% to 33%. This includes a $1.6 billion contribution from M&A. Revenue is to be in the range of $2.941 billion to $2.945 billion, an increase of 28% to 29%. This includes a $340 million contribution from M&A. A fully diluted share count of 812 million to 817 million shares, which accounts for the close of the CyberArk acquisition on February 11. Diluted non-GAAP EPS is to be in the range of $0.78 to $0.80. For the fiscal year 2026, we expect NGS ARR to be in the range of $8.52 billion to $8.62 billion, an increase of 53% to 54%. This includes a $1.52 billion contribution from M&A. Remaining performance obligation of $20.2 billion to $20.3 billion, an increase of 28%, which includes a $1.6 billion contribution from M&A. Revenue is to be in the range of $11.28 billion to $11.31 billion, an increase of 22% to 23%. This includes a $760 million contribution from M&A. Operating margins are to be in the range of 28.5% to 29%, diluted non-GAAP EPS is to be in the range of $3.65 to $3.70 per share. Our fully diluted share count is 768 million to 773 million shares, which accounts for the close of the CyberArk acquisition and adjusted free cash flow margin of 37%. We have included our typical modeling points in the presentation for your review, but I would like to highlight a few now. First, note that under our accounting policy, the upfront portion of term licenses and any perpetual license revenue from CyberArk will be recognized as product revenue, while all of our Chronosphere revenue will be included in services. For Q3, we expect product revenue growth of 25%. And for the year, we expect product revenue growth in the low 20s. With that, I will turn it back to Hamza for Q&A.”