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https://www.zscaler.com/
SR+
Score
6
ESG
Score
C
Zscaler, Inc. is a cloud security company, which has developed a platform incorporating core security functionalities needed to enable access to cloud resources based on identity, context and organization’s policies. The Company’s solution is a purpose-built, multi-tenant, distributed cloud platform that incorporates the security functionality needed to enable users, applications and devices to utilize authorized applications and services based on an organization’s business policies. The Company delivers its solutions using a software-as-a-service (SaaS) business model and sells subscriptions to customers to access its cloud platform, together with related support services. The Company’s cloud-native platform, the Zscaler Zero Trust Exchange, enables customers to secure and connect users, workloads and Internet of things (IoT)/ operational technology (OT) devices across three core products, Zscaler for Users, Zscaler for Workloads and Zscaler for IoT/OT.
Zscaler Reports First Quarter Fiscal 2025 Financial Results
Globe Newswire4:05 PM (UTC-05:00) Eastern Time (US & Canada) Dec 02, 2024
First Quarter Highlights
• Revenue grows 26% year-over-year to $628.0 million
• Calculated billings grows 13% year-over-year to $516.7 million
• Deferred revenue grows 27% year-over-year to $1,783.7 million
• GAAP net loss of $12.1 million compared to GAAP net loss of $33.5 million on a year-over-year basis
• Non-GAAP net income of $124.3 million compared to non-GAAP net income of $86.4 million on a year-over-year basis
SAN JOSE, Calif., Dec. 02, 2024 (GLOBE NEWSWIRE) -- Zscaler, Inc. (Nasdaq: ZS), the leader in cloud security, today announced financial results for its first quarter of fiscal year 2025, ended October 31, 2024.
“Growing customer engagements and strong sales execution drove a solid Q1 with all metrics exceeding our guidance. The combination of Zero Trust and AI is creating exciting new opportunities, which we are well positioned to capture with our large and expanding platform,” said Jay Chaudhry, Chairman and CEO of Zscaler. “With our customer obsession, the world’s largest cybersecurity cloud, and an upleveled go-to-market machine, we are driving strong growth.”
First Quarter Fiscal 2025 Financial Highlights
• Revenue: $628.0 million, an increase of 26% year-over-year.
• Income (loss) from operations: GAAP loss from operations was $30.7 million, or 5% of revenue, compared to $46.1 million, or 9% of revenue, in the first quarter of fiscal 2024. Non-GAAP income from operations was $134.1 million, or 21% of revenue, compared to $89.7 million, or 18% of revenue, in the first quarter of fiscal 2024.
• Net income (loss): GAAP net loss was $12.1 million, compared to $33.5 million in the first quarter of fiscal 2024. Non-GAAP net income was $124.3 million, compared to $86.4 million in the first quarter of fiscal 2024.
• Net income (loss) per share, diluted: GAAP net loss per share was $0.08, compared to $0.23 in the first quarter of fiscal 2024. Non-GAAP net income per share was $0.77, compared to $0.55 in the first quarter of fiscal 2024.
• Cash flows: Cash provided by operations was $331.3 million, or 53% of revenue, compared to $260.8 million, or 53% of revenue, in the first quarter of fiscal 2024. Free cash flow was $291.9 million, or 46% of revenue, compared to $224.7 million, or 45% of revenue, in the first quarter of fiscal 2024.
• Deferred revenue: $1,783.7 million as of October 31, 2024, an increase of 27% year-over-year.
• Cash, cash equivalents and short-term investments: $2,707.9 million as of October 31, 2024, an increase of $298.2 million from July 31, 2024.
Recent Business Highlights
• Zscaler’s cloud security platform reached a new scalability milestone, surpassing half a trillion daily transactions, which is nearly 60 times greater than the total number of Google searches per day. This milestone underscores the unparalleled scalability, resilience, and trust customers have placed in the Zscaler platform, which enables organizations to secure users, applications, and devices, while simplifying operations and consolidating costs.
• Appointed Adam Geller as Chief Product Officer to accelerate Zscaler’s next phase of innovation and growth. Geller’s proven security product and engineering experience will be invaluable to the development of Zscaler’s AI-driven security operations platform.
• Announced a set of AI and Zero Trust integrations with the CrowdStrike Falcon® cybersecurity platform to advance security operations by providing advanced threat detection, response, and risk management.
• Announced four new integrations with Okta designed to accelerate joint customers' Zero Trust transformation by delivering end-to-end, context-aware security. Together, Okta and Zscaler are helping customers reduce risk, improve the user experience, and enable cross-domain response through shared telemetry and threat intelligence.
• Published the Zscaler ThreatLabz 2024 Mobile, IoT, and OT Threat Report, which provides detailed insights covering mobile and IoT/OT cyber threat landscape from June 2023 through May 2024. ThreatLabz found that the Zscaler cloud blocked 45% more IoT malware transactions than last year–indicating botnets continue to proliferate across IoT devices.
Change in Non-GAAP Measures Presentation
Effective August 1, 2024, the beginning of our fiscal year ending July 31, 2025, we are using a long-term projected non-GAAP tax rate of 23% for the purpose of determining our non-GAAP net income and non-GAAP net income per share to provide better consistency across interim reporting periods in fiscal 2025 and beyond. Given the significant growth of our business and non-GAAP operating income, we believe this change is necessary to better reflect the performance of our business. We will continue to assess the appropriate non-GAAP tax rate on a regular basis, which could be subject to changes for a variety of reasons, including the rapidly evolving global tax environment, significant changes in our geographic earnings mix, or other changes to our strategy or business operations. Prior period amounts have been recast to reflect this change.
Financial Outlook
For the second quarter of fiscal 2025, we expect:
• Revenue of $633 million to $635 million
• Non-GAAP income from operations of $126 million to $128 million
• Non-GAAP net income per share of approximately $0.68 to $0.69, assuming approximately 163 million fully diluted shares outstanding and a non-GAAP tax rate of 23%
For the full year of fiscal 2025, we expect:
• Revenue of approximately $2.623 billion to $2.643 billion
• Calculated billings of $3.124 billion to $3.149 billion
• Non-GAAP income from operations of $549 million to $559 million
• Non-GAAP net income per share of $2.94 to $2.99, assuming approximately 164 million fully diluted shares outstanding and a non-GAAP tax rate of 23%
These statements are forward-looking and actual results may differ materially. Refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.
Guidance for non-GAAP income from operations excludes stock-based compensation expense and related employer payroll taxes, amortization of debt issuance costs, and amortization expense of acquired intangible assets. We have not reconciled our expectations of non-GAAP income from operations and non-GAAP net income per share to their most directly comparable GAAP measures because certain items are out of our control or cannot be reasonably predicted. For those reasons, we are also unable to address the probable significance of the unavailable information, the variability of which may have a significant impact on future results. Accordingly, a reconciliation for the guidance for non-GAAP income from operations and non-GAAP net income per share is not available without unreasonable effort.
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