Core Insights - Zscaler, Inc. is a prominent player in the cloud security sector, providing solutions that facilitate secure connections between users and applications [1][2] - The company is positioned in a competitive landscape, contending with major firms like Palo Alto Networks and Fortinet [1] - A recent analysis set a price target of $340 for Zscaler, indicating a potential upside of 25.66% from its trading price of $270.58 [1] Market Performance - Zscaler participated in Citi's 2025 Global Technology, Media, and Telecommunications Conference, showcasing its strategic initiatives [2] - The company's market capitalization is approximately $41.77 billion, with a trading volume of 2,084,784 shares on NASDAQ [2] - Zscaler's stock has experienced significant volatility over the past year, with a high of $318.46 and a low of $153.45 [2] Investor Interest - The ongoing engagement in industry events and analyst attention positions Zscaler as a focal point for investors interested in the growth of cloud security solutions [3]

PresentationFatima BoolaniDirector & Co-Head of Software Research Welcome to Day 2 of Citi's Global TMT Conference. Very delighted to have you all here. I'm Fatima Boolani. I jointly head up our software equity research effort here at Citi, and I am so thrilled to be kicking off day 2 with the management team at Zscaler. So to my left is Founder, CEO, Jay Chaudhry; and to his left is brand new CFO, just coming to the seat, Kevin Rubin. Thank you so much. I think this is one of your first tours of duty as CF ...

Core Insights - Zscaler, Inc. (NASDAQ: ZS) reported a strong close to FY25 with a "Rule Of" 51%, indicating robust revenue growth and free cash flow margin [1] Company Performance - The company is experiencing a growing opportunity for Zero Trust Everywhere, which is a significant trend in cybersecurity [1] Analyst Background - Michael Del Monte, an analyst with over 5 years of experience, emphasizes that investment recommendations should consider the entire investment ecosystem rather than evaluating a company in isolation [1]

Summary of Zscaler (ZS) 2025 Conference Call Company Overview - **Company**: Zscaler (ZS) - **Event**: Citi's Global TMT Conference - **Date**: September 04, 2025 Key Points Financial Performance - Zscaler achieved a significant milestone by crossing **$3 billion** in Annual Recurring Revenue (ARR), becoming one of only two pure-play SaaS security companies to do so [5][6] - The company reported **22% ARR growth**, **32% billings growth**, and **27% cash flow growth** for the fourth fiscal quarter [5][6] - The guidance for fiscal 2026 is set at **22% to 23% growth**, which includes the recent acquisition of Red Canary contributing approximately **$95 million** or **2.5%** to growth [18][19] Shift in Metrics - Zscaler has shifted its growth metric focus from billings to ARR, aligning management compensation with ARR growth rather than billings [12][13] - The new definition of ARR reflects the next twelve months of revenue, which is more aligned with revenue recognition practices [14][16] - The company reported a **114% net retention rate** for Q4 but does not intend to use this metric going forward, emphasizing ARR growth as a more representative metric [27] Market Dynamics - The market for Zscaler's services is still considered to be in early stages, with significant opportunities for growth in the zero trust security space [34][42] - Zscaler has expanded its offerings from secure web gateways to a comprehensive zero trust architecture, which includes zero trust for users, branches, and cloud workloads [35][40] - The company has captured **45%** of the Fortune 500 companies, indicating substantial upsell opportunities [42] Data Security and AI Integration - Zscaler's data security business is projected to reach **$400 million** in ARR, with a focus on inline cloud data loss prevention (DLP) [48] - The acquisition of Red Canary aims to enhance Zscaler's capabilities in AI-driven security operations, providing managed services and technology solutions [66][68] - Zscaler's approach to data security is evolving to include data security posture management (DSPM) and endpoint DLP, creating a comprehensive solution for customers [54][56] ZFlex Initiative - ZFlex, introduced recently, generated over **$100 million** in bookings in Q4 and is designed to facilitate customer flexibility in consuming Zscaler's modules [75][76] - The initiative aims to reduce friction in the buying process and support ARR growth, although it is not a consumption-oriented model [80] Capital Allocation and M&A Strategy - Zscaler maintains a focus on innovation and efficient financial models, continuing to invest in engineering and product development [84][85] - The company is selective in its M&A strategy, seeking disruptive technologies that can enhance its platform rather than acquiring for revenue [85][87] Additional Insights - The competitive landscape is evolving, with Zscaler positioned to lead in the AI SecOps movement due to its extensive data capabilities and innovative architecture [71][72] - The company emphasizes the importance of understanding customer needs and providing comprehensive solutions rather than relying on traditional metrics like customer count [24][25] This summary encapsulates the key discussions and insights from the Zscaler conference call, highlighting the company's financial performance, strategic shifts, market opportunities, and future growth prospects.

Core Insights - Zscaler Inc. (ZS) experienced a significant trading signal known as Power Inflow at a price of $263.74, indicating a potential uptrend and a possible entry point for traders [1][4] - The Power Inflow is interpreted as a bullish signal by active traders, suggesting that institutional activity is influencing the stock's direction [2][3] Trading Signals - The Power Inflow typically occurs within the first two hours of market open and helps gauge the stock's overall direction for the remainder of the day [3] - Following the Power Inflow, Zscaler's stock reached a high price of $274.50, resulting in returns of 4.1%, and a close price of $270.58, yielding returns of 2.6% [6] Order Flow Analytics - Order flow analytics involves analyzing the flow of buy and sell orders to gain insights and make informed trading decisions, separating retail and institutional volume rates [2][5] - Incorporating order flow analytics can help market participants identify trading opportunities and improve trading performance [5]

Core Insights - The market has high expectations for cybersecurity companies, but Zscaler's solid fourth-quarter earnings did not meet these expectations, resulting in a 1.4% decline in share price despite a positive S&P 500 performance [1] Financial Performance - Zscaler reported a 21% year-over-year revenue growth, reaching slightly over $719 million, supported by a 22% increase in annual recurring revenue (ARR) to nearly $3.02 billion [2] - Non-GAAP adjusted net income rose by 27% to nearly $147 million, equating to $0.89 per share, surpassing analyst estimates of $707 million in revenue and $0.80 per share adjusted profitability [4] Market Dynamics - The company attributes its growth to rising concerns about cybersecurity threats and increased adoption of cybersecurity solutions, particularly as clients scale up with artificial intelligence (AI) [5] - The current environment is favorable for cybersecurity companies that embrace AI, which may have led to inflated expectations for Zscaler's fourth-quarter results [5] Future Guidance - Zscaler's guidance for fiscal year 2026 anticipates ARR to be between almost $3.68 billion and almost $3.70 billion [6] - Revenue is expected to be just under $3.27 billion to a bit over $3.28 billion, with adjusted net income forecasted at $3.64 to $3.68 per share for the year [7]

About this content About Sean Mason Sean Mason is a Senior Journalist at Proactive, having researched and written about Canadian and US equities for 20 years. Sean graduated from the University of Toronto with a BA in history and economics and has also passed the Canadian Securities Course. He previously worked at Investors Digest of Canada, Stockhouse, and SmallCapPower.com. Read more About the publisher Proactive financial news and online broadcast teams provide fast, accessible, informative and action ...

Financial Performance - Zscaler's ARR growth year-over-year is 22% [2] - Zscaler is one of two pure-play SaaS security companies that have crossed $3 billion in ARR [3] - Zscaler's free cash flow is 27% [3] - Data security products exceeded $425 million ARR [6] - AI portfolio crossed a quarter of a billion dollars in ARR [12] Business Strategy & Market Focus - Zscaler is shifting focus from Billings to ARR, aligning with investor preference for SaaS security companies [4] - Zscaler is focused on solving customer problems and believes its guidance is good, with positive feedback from investors and analysts [5] - Zscaler's customer base is expanding, with Fortune 500 companies increasing from 40% to 45% and Global 2000 companies from 35% to 40% [6] - Zscaler's solutions help customers save money, addressing pressure on IT leaders to reduce costs [7] - Zscaler emphasizes a fully integrated comprehensive platform, eliminating legacy products rather than building on top of them [8][9][10] AI Security - AI security is becoming a bigger piece of Zscaler's business, with a portfolio including securing Gen AI public applications and private AI models [11][12] - Zscaler expects its AI portfolio to grow at a much faster pace [12]

Core Insights - Zscaler Inc reported strong fiscal fourth-quarter results, with annual recurring revenues (ARR) increasing by 22% and initial guidance for fiscal 2026 indicating 19% growth [1][7][8] Financial Performance - Billings reached $1,202 million, a 32% year-on-year increase, surpassing the consensus estimate of $1,145 million [3][8] - Revenue for the quarter was $719 million, exceeding expectations of $708 million [3] - ARR for the fourth quarter was $3.015 billion, remaining flat sequentially, but net new ARR growth accelerated to 16% year-on-year from 6% in the previous quarter [3][11] Guidance and Future Outlook - Management guided for an operating margin expansion of approximately 65 basis points for fiscal 2026, indicating potential for upside [2] - The ARR guidance for fiscal 2026 is set at $3.676-$3.698 billion, reflecting a growth rate of 22%-23% [8] - The guidance does not include contributions from Red Canary contracts, which are up for renewal in fiscal 2026 [9] Market Position and Growth Areas - Zscaler is experiencing strong momentum in the Secure Access Service Edge (SASE) market, with a robust portfolio of emerging products [4][6] - The company's emerging growth categories, including AI Security, Zero Trust Everywhere, and Data Security Everywhere, now represent over $1 billion in combined ARR and are growing faster than the overall business [11] - Customers contributing $1 million in ARR grew by 18% year-on-year, while those spending over $100,000 increased by 13% [11] Analyst Sentiment - Analysts have noted that Zscaler's results substantially exceeded expectations across growth and profitability metrics [4][10] - The company is well-positioned to maintain a 22% year-on-year revenue growth trajectory [5]

Core Insights - Zscaler's shares are down 2.9% to $266.49 despite surpassing earnings and revenue estimates with $0.89 per share and $719.23 million in revenue, indicating strong fourth-quarter performance driven by its AI-powered model, although a recent data breach may be affecting post-earnings momentum [1] Group 1: Stock Performance - If the current dip persists, it would mark three consecutive sessions of decline and the third post-earnings slump in the last five reports, representing the worst single-day performance in nearly a month, with an overall decline of 11% over the past three months [2] - The stock is currently facing a downtrend that began in early July, but the 120-day moving average and the $260 level may help contain losses as the stock attempts to regain earlier optimism [2] Group 2: Analyst Sentiment - Despite the decline, Zscaler received upgrades and price-target increases from at least nine firms, including JP Morgan and Barclays Securities, while Scotiabank Securities was among the few to issue a price cut; prior to the recent dip, 32 out of 43 analysts were bullish on the stock [3] Group 3: Options Market Activity - Options traders appear skeptical about a rebound, as the equity's 10-day and 50-day put/call volume ratios rank in the 83rd and 96th percentiles, respectively [4] - There has been significant activity in the options market, with 19,000 puts traded today, which is 14 times the usual amount, indicating heightened bearish sentiment; the most popular contract is the weekly 9/5 250-strike put [5]