“From a long-term perspective, we expect gross margins between 78% and 82%.”

In context

“Remo Canessa (CFO): I mean, good questions. So, the outperformance in gross margins in Q4, we did 81.6%. Basically, it's the efficiency that we've created with our software authorization and just overall lower cost, bandwidth cost, colo cost, depreciation as well as the outperformance on the top line. Those are the primary reasons. Key thing to recognize with our gross margin, we have the ability to come out with applications faster by putting basically applications in public cloud. We will continue to do that. Again, from our perspective, we are going to deliver the best products as quickly as we can to our customers. In our gross margin, we expect in fiscal '23 and also the midterm is 80%. From a long-term perspective, we expect gross margins between 78% and 82%. So, as long as we're within that bound, it just gives tremendous flexibility from a modeling perspective for Zscaler because we have such high gross margins with high growth to invest in the business. From a perspective of the $1.7 billion in cash, really no plans for that. It will be used for strategic purposes. We clearly don't need it for working capital as our free cash flow last year was significant. And also from a free cash flow perspective in fiscal '23, I'd expect free cash flow margin to be 20% or above. So really just for strategic purposes is that cash.”