“earnings per share of $0.10 to $0.11 assuming 149 million to 150 million fully diluted shares.”

In context

“Remo Canessa (CFO): Thank you, Jay. As Jay mentioned, we are pleased with the results for the second quarter of fiscal 2022. Revenue for the quarter was $256 million, up 11% sequentially and 63% year-over-year. On a year-over-year basis, revenue growth accelerated in the quarter, driven by strong business activity. ZPA product revenue was 17% of total revenue. From a geographic perspective, we had broad strength across our three major regions. Americas represented 51% of revenue, EMEA was 35% and APJ was 14%. APJ continues to be our fastest-growing region, with revenue growth of 16%. Our total calculated billings grew 59% year-over-year to $368 million, with billings duration near the midpoint of our 10 to 14 months range. We are also pleased to report 61% year-over-year growth in short-term billings. Remaining performance obligations, or RPO, were $1.95 billion as of January 31, growing 90% from one year ago. The current RPO is 50% of the total RPO. Our strong customer retention rate and our ability to upsell the broader platform have resulted in a high dollar-based net retention rate, which was again above 125%. We had 251 customers paying us more than $1 million annually, up 85% from 136 in the prior year. The continued strength in this metric speaks to the role we play in our customers' digital transformation initiatives. We added over 560 customers in the past 12 months paying us more than $100,000 annually, ending the quarter at 1,751 such customers. Turning to the rest of our Q2 financial performance, total gross margin of 80.4% was approximately flat quarter-over-quarter and down 90 basis points year-over-year. Our total operating expenses increased 13% sequentially and 62% year-over-year to $183 million. Operating expenses as a percentage of revenue were up at 72%, similar to a year ago, even as we made ongoing investments in smokescreen and trust-owned businesses we acquired in the second half of last year and the partial return of T&E. Operating margin was 9% and free cash flow margin was 12%. We continue to expect CapEx as a percentage of revenue to be in the high single digits for the full year. We ended the quarter with over $1.61 billion in cash, cash equivalents, and short-term investments. Now moving on to guidance and modeling points. As a reminder, these numbers are all non-GAAP, which excludes stock-based compensation expenses and related payroll taxes, amortization of debt discount, and amortization of intangible assets. For the third quarter of fiscal 2022, we expect revenue in the range of $270 million to $272 million reflecting year-over-year growth of 53% to 54%, gross margins of 79%. I would like to remind investors that a number of our emerging products, including ZDX, workload segmentation, and CSPM, will initially have lower gross margins within our core products because we are more focused on time to market and growth rather than optimizing them for gross margins. Operating profit in the range of $19 million to $20 million. As noted before, we have more interest events starting this quarter, including customer events, conferences, our internal mid-year sales events, net loss and other income of $100,000, income taxes of $4 million, earnings per share of $0.10 to $0.11 assuming 149 million to 150 million fully diluted shares. For the full year fiscal 2022, we are increasing our revenue guidance to a range of $1.045 billion to $1.05 billion or year-over-year growth of 55% to 56%, increasing calculated billings to a range of $1.365 billion to $1.37 billion or year-over-year growth of 46% to 47%, increasing our operating profit to a range of $95 million to $98 million, increasing our earnings per share to a range of $0.54 to $0.56 assuming approximately 149 million to 150 million fully diluted shares. Please note that our share count guidance includes dilution from our convertible debentures based on the existing treasury method of accounting. With a large market opportunity and customers increasingly adopting the broader platform, we're committed to investing aggressively in our company. We see a window of opportunity to extend our first-mover advantage in this fast-growing market, which will have positive long-term impacts. We will balance growth and profitability based on how our business is growing, but we'll continue to prioritize growth, which we believe is in the best interest of our shareholders, employees, and customers. Operator, you may now open the call for questions.”