The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Patrick Colville - Scotiabank Global Banking and Markets, Research Division - Analyst
: So I guess I'd like to ask about the sales changes that we discussed last quarter on the call. Is the slowdown we're seeing have any bearing on the
sales changes that were made earlier in the fiscal year? Or has that process been kind of wrapped up and that's in the background now?
Unidentified Company Representative
Patrick, as we discussed, we made changes to our enterprise segment, the lower end of market segment at the start of the year and where it now
reports to Geo leaders. Those changes are behind us, they've done Q1, and no bearing on Q2 numbers. Okay? So the main thing we're seeing at
the highest level is some of the macro conditions that are impacting some of the higher and larger deals are low end of the market segments,
enterprise and commercial. They actually had done quite well. But they're still impacted.
Question: Matthew Hedberg - RBC Capital Markets, Research Division - Analyst
: I just wanted to ask about linearity. It sounded like in your prepared remarks that January was worse than December. I'm curious, did those trends
continue into February, i.e., was February worse than January? And is there any way to quantify sort of the impact of the deals that pushed out of
the quarter?
Question: Gabriela Borges - Goldman Sachs Group, Inc., Research Division - Analyst
: I wanted to ask you on the market opportunity for best of breed. With Zscaler now having a versity of the Global 2000, how do you think about the
risk that the enterprises that can merged to that best of breed are essentially or already Zscaler customers?
In other words, where do you think the ceiling is to that G2000 penetration rate? And are you getting feedback from, let's say, the next sort of
Question: Gabriela Borges - Goldman Sachs Group, Inc., Research Division - Analyst
: Yes. Essentially, the deal size you're competing for today, are you getting any signs of feedback from customers saying, we know you're best of
breed, but we're not going to prioritize you?
Question: Peter Levine - Evercore ISI Institutional Equities, Research Division - Analyst
: Maybe just to piggyback off an earlier question on upsell versus net new. So it seems like you're able to kind of somewhat toggle your sales force
to maybe focus more on those back-to-base opportunities. So one, are you changing incentives, comp plans at all to, I guess, better incentivize
Question: Peter Levine - Evercore ISI Institutional Equities, Research Division - Analyst
: And then which products are getting the biggest hit rate?
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MARCH 02, 2023 / 9:30PM, ZS.OQ - Q2 2023 Zscaler Inc Earnings Call
Question: Peter Levine - Evercore ISI Institutional Equities, Research Division - Analyst
: Perfect. Yes.
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