Palo Alto Networks’ growing emphasis on software-based security helped to insulate the vendor from supply chain restraints due to the global semiconductor shortage, CEO Nikesh Arora said on Thursday’s third-quarter fiscal 2021 earnings call.

“The good news is, as I highlighted, we moved 40% of our firewalling business to software,” he said. “So, if the industry starts to see supply constraints, we are able to solve the customer’s problem by giving them capability that is software based.”

Arora assured investors that the company had sufficient inventory to keep up with appliance orders in the short term, but said long term, all bets off until the broader industry can respond and bring more fabs online.

Arora added that while security appliances remain a key revenue driver today, he expects it will become less appealing over the next few years. “I also like the idea of having less and less reliance on hardware, because I promise you in a few years from now, you’re gonna tell me ‘love your business, but you’ve still got this hardware hunt and kill requirement every quarter,’” he said.

Strong demand for Palo Alto Networks’ security portfolio, which includes the company’s Prisma Access secure access service edge (SASE) platform, helped to drive revenues during the first quarter Arora said.

“Our business is benefiting from growing adoption on multiple Palo Alto Networks security platforms across Strata, Prisma, and Cortex,” he said. “In Q3, 70% of our global 2,000 customers had purchased products from more than one of these platforms, and 41% have purchased all three platforms. This is up from 58% and 25% two years ago.”

Coinciding with the growth of the company’s network security business, Palo Alto Networks saw its subscription revenues skyrocket during the quarter. “We also saw 71% [year-over-year] growth in ARR — our analyzed recurring revenue — from our next generation security offerings,” Aurora said.

Arora expects recent partnerships in the service provider space around Prisma Access will further boost revenues over the next year.

Palo Alto Networks reported strong third-quarter growth with revenues up 24% year over year to $1.1 billion. The strong revenue growth, however, was overshadowed by a $145 million net loss during the quarter.

“We had a strong third quarter as we continue to deliver winning innovation, while simultaneously adding new customers at pace,” CFO Dipak Golechha said. “We delivered billings of $1.3 billion, up 27% year over year, with strong growth across the board and ahead of our guidance of 20% to 22% growth.”

Palo Alto Networks added about 2,400 new customers during the quarter. Of those, the number of customers spending more than $1 million annually increased 29% year over year. “This growth and active millionaire customers has accelerated in recent quarters,” Arora said.

Looking ahead, Golechha expects to continue this momentum into the next quarter. He projected Q4 revenues of $1.16 billion to $1.17 billion, up 20% to 23% year-over-year.

Based on its strong performance, company executives raised the full-year guidance. Palo Alto Networks now expects full-year 2021 revenues to grow at a rate of 23% to 24%, reaching between $4.2 billion and $4.21 billion.