Zscaler Inc at Goldman Sachs Communacopia + Technology Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Gabriela Borges - Goldman Sachs Group, Inc., Research Division - Analyst : Jay, one of our observations watching Zscaler evolve over the past 7, 10 years, has been your evolution into a multiproduct company, building off of the success you've had with Zscaler Internet access. When you think about the decisions that you made very early on in the company architecturally, what are the 1 or 2 decisions that stand out to you as being really important with the power of hindsight to empowering the product portfolio that you have today?

Question: Gabriela Borges - Goldman Sachs Group, Inc., Research Division - Analyst : So it leads to a question on how to think about greenfield versus brownfield TAM. If I think about the categories that Zscaler has consistently displaced things like Secure Web Gateway, CASB, the number of TAMs that you are able to consolidate now versus 5 years ago is evolving. So how do you think about greenfield versus brownfield? And where do you think you are on the brownfield piece of displacement?

Question: Gabriela Borges - Goldman Sachs Group, Inc., Research Division - Analyst : We see this dynamic across security across technology where you have an industry pioneer and then you have fast followers as the TAM becomes more validated and the TAM of walls. How do you think about the risk of commoditization at the low end and the mid-market you're continuing to push the envelope with your R&D roadmap. How do you balance the risk of commoditization at the low end with continuing to drive the industry forward and the concept -- the architectural concepts forward at the high end.

Question: Gabriela Borges - Goldman Sachs Group, Inc., Research Division - Analyst : Where do you think Microsoft fits within the 4 or 5 pockets? You made some interesting comments last night on the technical barrier at the high end and the enterprise, the potential for an impact at the low end. Would love to elaborate a little bit?

Question: Gabriela Borges - Goldman Sachs Group, Inc., Research Division - Analyst : I think there's a natural evolution between some of what you're doing on the network side and some of what you're now doing on the cloud side. I would love to hear a little more about your strategy of expanding into cloud security with Zscaler for workloads. And as a customer, we've had REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 06, 2023 / 2:30PM, ZS.OQ - Zscaler Inc at Goldman Sachs Communacopia + Technology Conference this decision process before where I can choose to work with someone like a Palo Alto and the network in Palo Alto in the cloud or I could choose to work with Zscaler for the network and Zscaler for the cloud. So help us think through how customers are making that decision.

Question: Gabriela Borges - Goldman Sachs Group, Inc., Research Division - Analyst : The where other market that appears to be going through a little bit of an inflection in TAM is data loss production. And your DLP products, you've had DLP products from or very early on in the company. Last night, the scope of DLP and the types of DLP functionality that you're consolidating seem like they're going through an inflection. Would love for you to comment a little bit on what you're seeing in that market and how the TAM is [evolving].

Question: Gabriela Borges - Goldman Sachs Group, Inc., Research Division - Analyst : I appreciate your comment on a takeoff team within the sales force. I know you just had your sales kickoff late in August. What are some of the incremental changes that you're making to the sales force, whether it's takeoff teams, whether it's incentives on product market bundling, I would love to hear how you're thinking about priorities for Salesforce for fiscal '24.

Question: Gabriela Borges - Goldman Sachs Group, Inc., Research Division - Analyst : Remo, your comment that the sales capacity is stronger into fiscal '24 than it was into fiscal '23. And -- is that simply a function of the company being bigger and having more [boots] on the ground?

Question: Gabriela Borges - Goldman Sachs Group, Inc., Research Division - Analyst : Well, let me ask you this, at any given time in Zscaler's history, you'll have had emerging products that are ramping. And so why -- what is different about this year that is driving an uptick in CapEx versus other years where you've had cloud infrastructure products ramping?

Question: Gabriela Borges - Goldman Sachs Group, Inc., Research Division - Analyst : What is an example of AI capabilities (inaudible).

Question: Gabriela Borges - Goldman Sachs Group, Inc., Research Division - Analyst : I want to stay on this idea of conservatism and thoughtfulness in the guide. You have this slide in your earnings presentation showing the macro and then what you've done to navigate the macro things like CFO already business use cases. And so if I look back at your track record over the past year and even as a public company, you've been very consistent in outperforming even in a year where macro has been volatile. And so as we think through where you set the bar for fiscal '24, is there any reason why you wouldn't be able to outperform to the same degree as you have in the past. Given that you've already worked to put in place processes to navigate a more challenging macro.

Question: Gabriela Borges - Goldman Sachs Group, Inc., Research Division - Analyst : Fantastic. Thank you both for your time. We'll leave it here.