Cloud stock Zscaler Inc (NASDAQ:ZS) was last seen up 7.6% at $270.32, after the company posted strong fiscal third-quarter results and raised its full-year forecast once again. Separately, the firm also announced the appointment of Kevin Rubin as the new Chief Financial Officer. The positive momentum has ZS brushing off a downgrade from Piper Sandler to "neutral" from "overweight," though no fewer than 18 analysts also lifted their price targets on the stock. Today's pop has ZS trading at three-year highs a ...

Zscaler (ZS) reported third-quarter fiscal 2025 non-GAAP earnings of 84 cents per share, which beat the Zacks Consensus Estimate by 12%. Moreover, the bottom line increased 18.3% year over year, driven by higher revenues and efficient cost management.ZS’ earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 18.7%.Zscaler’s third-quarter fiscal 2025 revenues of $678 million beat the Zacks Consensus Estimate by 1.8% and exceeded management’s guidance of $ ...

Zscaler Inc ZS reported better-than-expected third-quarter financial results after the market close on Thursday.Zscaler reported third-quarter revenue of $678.03 million, beating the consensus estimate of $666.86 million. The cybersecurity company reported adjusted earnings of 84 cents per share, beating analyst estimates of 75 cents per share, according to Benzinga Pro."We delivered outstanding third quarter results as an increasing number of customers adopt our expanding Zero Trust Exchange platform. We e ...

Zscaler (ZS) reported $678.03 million in revenue for the quarter ended April 2025, representing a year-over-year increase of 22.6%. EPS of $0.84 for the same period compares to $0.88 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $666.39 million, representing a surprise of +1.75%. The company delivered an EPS surprise of +12.00%, with the consensus EPS estimate being $0.75.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Stree ...

Zscaler (ZS) came out with quarterly earnings of $0.84 per share, beating the Zacks Consensus Estimate of $0.75 per share. This compares to earnings of $0.88 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 12%. A quarter ago, it was expected that this cloud-based information security provider would post earnings of $0.69 per share when it actually produced earnings of $0.78, delivering a surprise of 13.04%.Over the last four q ...

Zscaler (ZS) Q3 2025 Earnings Call May 29, 2025 04:30 PM ET Company Participants Ashwin Kesireddy - Vice President of Investor Relations & Strategic FinanceJay Chaudhry - CEO, Chairman & FounderRemo Canessa - CFOKevin Rubin - CFOBrad Zelnick - Managing DirectorSaket Kalia - Managing DirectorRoger Boyd - Executive DirectorShaul Eyal - Managing Director - Equity ResearchMichael Richards - Equity Research Senior AssociateGray Powell - Managing Director Conference Call Participants Ittai Kidron - MD & Senior An ...

Financial Data and Key Metrics Changes - Revenue for Q3 was $678 million, representing a 23% year-over-year increase and a 5% sequential increase [29] - Annual recurring revenue (ARR) was approximately $2.9 billion, with a year-over-year growth of 23% [29] - Remaining performance obligations (RPO) grew 30% year-over-year to $4.978 billion [30] - Total calculated billings increased 25% year-over-year to $785 million [30] - Free cash flow margin was 18%, including data center CapEx at 11% of revenue [32] Business Line Data and Key Metrics Changes - New logo annual contract value (ACV) grew over 40% year-over-year [7] - Zero Trust Everywhere, Data Security Everywhere, and AgenTic Operations are significant growth drivers, with combined ARR approaching $1 billion [18] - ZDX CoPilot bookings grew over 70% year-over-year to nearly $75 million [24] - SecOps solutions saw over 120% year-over-year growth in ACV [26] Market Data and Key Metrics Changes - Americas represented 54% of revenue, EMEA was 30%, and APJ was 16% [29] - The dollar-based net retention rate was 114% [31] Company Strategy and Development Direction - The company aims to reach $5 billion or more in ARR, focusing on Zero Trust and AI security [28] - The Z Flex program allows customers to flexibly scale their adoption of the platform, contributing over $65 million in TCV bookings [16] - The acquisition of Red Canary is expected to enhance capabilities in Managed Detection and Response (MDR) and Threat Intelligence [26][66] Management's Comments on Operating Environment and Future Outlook - Customers remain cautious about IT spending due to economic uncertainty, but prioritize cyber and data protection [15] - The company is seeing strong demand for its platform despite macroeconomic challenges [50] - Management is optimistic about the growth potential in federal business, although it is not a significant revenue contributor currently [88] Other Important Information - The company appointed Kevin Rubin as the new Chief Financial Officer [36] - The acquisition of Red Canary is valued at $675 million and is expected to close in August 2025 [66] Q&A Session Summary Question: How does the company ensure customer focus amidst rapid product expansion? - The company has implemented a two-tier sales model with takeoff teams for new product areas, allowing for focused expertise [43][44] Question: What is the outlook on macro trends affecting the business? - The spending environment remains challenging, but cybersecurity projects are prioritized, especially those involving Zero Trust and AI [50][51] Question: Can you elaborate on the Z Flex program? - Z Flex provides customers with flexibility in purchasing and deploying modules without lengthy procurement cycles, starting with larger customers [46][47] Question: What are the growth drivers in the new product categories? - The company is seeing significant growth in Zero Trust Everywhere, Data Security Everywhere, and AgenTic Operations, with impressive growth rates in each category [18][94] Question: What attracted the company to acquire Red Canary? - The acquisition was driven by the need to accelerate the vision of becoming a leading player in the security market, leveraging Red Canary's technology and expertise [64][66]

Fiscal Q3 2025 Earnings Call May 2025 Safe Harbor Forward-Looking Statements Unless otherwise noted, all numbers presented will be on an adjusted, non-GAAP basis. Reconciliation of GAAP to non-GAAP financial measures is in the appendix of this presentation. This presentation has been prepared by Zscaler, Inc. ("Zscaler") for informational purposes only and not for any other purpose. Nothing contained in this presentation is, or should be construed as, a recommendation, promise or representation by the prese ...

Revenue Growth - For the nine months ended April 30, 2025, revenue was $1,953.9 million, a 24% increase from $1,574.9 million in the same period of 2024[119] - Revenue for the three months ended April 30, 2025, was $678,034,000, up from $553,201,000 in the same period of 2024, marking a growth of 22.6%[143] - Revenue increased by $378.986 million, or 24%, for the nine months ended April 30, 2025, compared to the same period in 2024, driven by a 10% increase in the customer base and additional subscriptions contributing $294.8 million[179] Customer Base Expansion - As of July 31, 2024, the company had over 8,650 customers, up from over 7,700 customers in 2023, representing a growth of approximately 12.3%[122] - The company is focused on expanding its customer base, particularly among the Forbes Global 2000, where it currently serves approximately 35%[122] - The company increased its customer base by 10% from April 30, 2024, to April 30, 2025, contributing to revenue growth[163] Financial Performance - GAAP gross profit for the nine months ended April 30, 2025, was $1,507.951 million, compared to $1,227.979 million for the same period in 2024, reflecting a growth of 22.8%[136] - The company incurred a net loss of $23.9 million for the nine months ended April 30, 2025, an improvement from a net loss of $42.8 million in the same period of 2024[119] - Net loss for the three months ended April 30, 2025, was $(4.1) million compared to a net income of $19.1 million for the same period in 2024[161] Cash Flow and Liquidity - Free cash flow for the period is calculated as net cash provided by operating activities less capital expenditures, indicating liquidity for strategic initiatives[139] - Net cash provided by operating activities for the nine months ended April 30, 2025, was $721.8 million, compared to $576.3 million for the same period in 2024, reflecting an increase of 25.2%[201][203] - As of April 30, 2025, the company had cash, cash equivalents, and short-term investments totaling $3,005.6 million, available for working capital and general corporate purposes[194] Operating Expenses - Operating expenses are expected to increase in absolute dollars as the company invests in sales and marketing, research and development, and general and administrative functions[153][154][155] - Sales and marketing expenses rose by $52.2 million or 20% to $314.6 million for the three months ended April 30, 2025, driven by higher employee-related costs[166] - Research and development expenses increased by $134.201 million, or 37%, for the nine months ended April 30, 2025, primarily due to higher employee-related expenses and costs associated with facility and software[184] Deferred Revenue - Total deferred revenue at the end of the period for April 30, 2025, was $1,984,985,000, compared to $1,577,014,000 at the end of the same period in 2024[143] - As of April 30, 2025, the company had deferred revenue of $1,985.0 million, with $1,677.9 million expected to be recognized as revenue in the next 12 months[199] - The company strategically entered into multi-year advance billing agreements, significantly contributing to its deferred revenue[199] Market Risks - The company’s investments are exposed to market risk, with a hypothetical 100 basis point change in interest rates potentially affecting the fair value of investments by $9.6 million[212] - The company has a foreign currency risk management program, utilizing forward contracts to hedge forecasted foreign currency-denominated expenses[218] Future Outlook - The company expects to continue incurring net losses in the foreseeable future due to ongoing investments in sales, marketing, and research and development[119] - The company anticipates that gross profit will increase in absolute dollars and gross margin will slightly improve over the long term[150] - The company expects calculated billings growth rate to trend down over time due to seasonality and the mix of billings[142]

Exhibit 99.1 Zscaler Reports Third Quarter Fiscal 2025 Financial Results Third Quarter Highlights SAN JOSE, California - May 29, 2025 - Zscaler, Inc. (Nasdaq: ZS), the leader in cloud security, today announced financial results for its third quarter of fiscal year 2025, ended April 30, 2025. "We delivered outstanding Q3 results as an increasing number of customers adopt our expanding Zero Trust Exchange platform. We enable customers to realize Zero Trust Everywhere while lowering operational cost and comple ...