Product revenue increased 52% during the three months ended June 30, 2026 compared to the same period last year, primarily driven by hardware revenue growth resulting from higher unit shipments, higher average selling prices resulting from customer demand for higher-performing models and recent pricing actions.

Product revenue growth was driven by growth in secure networking hardware products and term licenses, including increased demand for higher performance products, deployments related to AI infrastructure, technology upgrades, upsell activity, and expansion into new use cases.

Product gross margin increased 2.4 percentage points during the three months ended June 30, 2026 compared to the same period last year, primarily driven by recent pricing actions.

We are implementing price increases to mitigate increased hardware costs resulting from memory chip shortages.