Fiscal Q1 2026 Earnings Call November 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 ...

Financial Performance - For the three months ended October 31, 2025, revenue was $788.1 million, a 26% increase from $628.0 million in the same period of 2024[121] - GAAP gross profit for the three months ended October 31, 2025, was $603.4 million, with a GAAP gross margin of 77%[139] - Non-GAAP income from operations for the three months ended October 31, 2025, was $171.9 million, resulting in a non-GAAP operating margin of 22%[141] - Annual Recurring Revenue (ARR) as of October 31, 2025, was $3,204 million, up from $2,553 million in 2024, indicating a strong growth in subscription contracts[145] - Free cash flow for the three months ended October 31, 2025, was $413,296 thousand, compared to $291,881 thousand in 2024, reflecting an increase of 42%[144] - The net loss for the three months ended October 31, 2025, was $11.6 million, adjusted for non-cash charges of $297.1 million, which included $188.6 million for stock-based compensation[190] Customer Growth - As of July 31, 2025, the company had over 9,400 customers, up from over 8,650 customers in 2024, representing a growth of approximately 8.6%[125] - The customer base grew by 14% from October 31, 2024, to October 31, 2025, contributing to the revenue increase[166] Operating Expenses - Operating expenses increased to $639,721 thousand in Q3 2025 from $517,160 thousand in Q3 2024, primarily driven by higher sales and marketing expenses[163] - Research and development expenses increased to $200,498 thousand in Q3 2025 from $154,254 thousand in Q3 2024, reflecting ongoing investment in product development[163] - Sales and marketing expenses increased by $67.5 million, or 22%, to $373.6 million, largely due to higher employee-related expenses and marketing costs[169] - General and administrative expenses grew by $8.8 million, or 16%, to $65.7 million, mainly from increased employee-related expenses[172] Cash Flow and Investments - Net cash provided by operating activities for the three months ended October 31, 2025, was $448.3 million, compared to $331.3 million for the same period in 2024, reflecting a year-over-year increase of 35.4%[190][191] - Net cash used in investing activities during the three months ended October 31, 2025, totaled $1,502.2 million, significantly higher than $201.7 million in the same period of 2024, primarily due to $896.4 million in short-term investments and $672.8 million for business acquisitions[192][193] - Net cash provided by financing activities was $3.1 million for the three months ended October 31, 2025, slightly up from $0.9 million in the same period of 2024, mainly from stock option exercises[194] Economic Environment and Future Outlook - The uncertain economic environment is leading to elongated approval processes for transactions, particularly for larger deals[122] - The company expects to continue incurring net losses as it invests in sales, marketing, and research and development[121] - The company expects gross profit to increase in absolute dollars and gross margin to improve slightly over the long term[152] Risk Management - The company has a foreign currency risk management program and uses foreign currency forward contracts to hedge a portion of its forecasted foreign currency-denominated expenses[203][205] - A hypothetical 100 basis point change in interest rates would have changed the fair value of the company's investments in available-for-sale securities by $27.9 million as of October 31, 2025[200] - The effect of a hypothetical 10% change in foreign currency exchange rates would not have a material impact on the company's financial statements for the three months ended October 31, 2025, and 2024[203] Other Financial Metrics - Interest income increased by $3.1 million, or 10%, to $33.2 million, attributed to a higher balance of cash equivalents and short-term investments[173] - Interest expense decreased by $1.0 million, or 32%, to $(2.1) million, primarily due to fair value hedge adjustments[174] - Other expense, net increased by $2.4 million, or 366%, to $(3.0) million, driven by fluctuations in foreign currency transactions[175] - Provision for income taxes decreased by $4.4 million, or 58%, to $3.2 million, mainly due to a tax benefit from the release of a portion of the U.S. valuation allowance[176] - As of October 31, 2025, cash, cash equivalents, and short-term investments totaled $3,321.3 million, supporting working capital and corporate purposes[182] - Deferred revenue amounted to $2,351.3 million, with $1,946.2 million expected to be recognized as revenue in the next 12 months[187] - The company issued $1,725.0 million in 2028 Notes in July 2025, which have a 0.0% interest rate, thus not exposing the company to economic interest rate risk[201][202] - Non-cash charges for the three months ended October 31, 2025, included $188.6 million for stock-based compensation and $48.1 million for amortization of deferred contract acquisition costs[190]

Exhibit 99.1 Zscaler Reports First Quarter Fiscal 2026 Financial Results First Quarter Highlights SAN JOSE, California - November 25, 2025 - Zscaler, Inc. (Nasdaq: ZS), the leader in cloud security, today announced financial results for its first quarter of fiscal year 2026, ended October 31, 2025. "Our outstanding Q1 results demonstrate the strong demand we are experiencing for our Zero Trust and AI Security platform. With over $3.2B in Annual Recurring Revenue, growing over 25% year-over-year, and Rule-of ...

Core Insights - Zscaler, Inc. reported strong financial results for Q1 FY2026, highlighting robust demand for its Zero Trust and AI Security platform, with Annual Recurring Revenue (ARR) exceeding $3.2 billion, growing over 25% year-over-year [3][6][8] - The company emphasizes the integration of recently acquired technologies to enhance its AI Security offerings, addressing emerging security challenges [3][6] Financial Performance - Revenue increased by 26% year-over-year to $788.1 million [6][7] - ARR grew by 26% year-over-year to $3.204 billion [6][7] - Deferred revenue rose by 32% year-over-year to $2.351 billion [6][7] - GAAP net loss was $11.6 million, an improvement from a loss of $12.1 million in the previous year [6][7] - Non-GAAP net income reached $159.5 million, compared to $124.3 million in the same quarter last year [6][7] Operational Highlights - Cash provided by operations was $448.3 million, representing 57% of revenue, up from 53% in the previous year [7][32] - Free cash flow was $413.3 million, or 52% of revenue, compared to 46% in the prior year [7][32] - The company completed acquisitions of Red Canary and SPLXAI for a total of $692 million, aimed at enhancing its AI security capabilities [6][7][14] Market Position and Strategy - Zscaler's Zero Trust Exchange platform is positioned as a leading solution in cloud security, with a focus on protecting enterprises from cyber threats [3][23] - The company launched new innovations in its Zscaler Digital Experience (ZDX) to improve visibility and performance for IT teams [6][7] - Zscaler has surpassed $1 billion in software sales through the AWS Marketplace, indicating strong market traction [14] Future Outlook - For Q2 FY2026, Zscaler expects revenue between $797 million and $799 million, with non-GAAP income from operations projected at $172 million to $174 million [15][10] - The full-year revenue guidance is set between $3.282 billion and $3.301 billion, with non-GAAP net income per share anticipated to be approximately $3.78 to $3.82 [15][10]

Core Viewpoint - Zscaler Inc. is experiencing a balance between stabilizing growth and aggressive innovation as it approaches its first-quarter fiscal 2026 earnings report on November 25 [1] Management's Forecast: Margins And Milestones - Zscaler projects revenue between $772 million and $774 million, indicating approximately 23% year-over-year growth [2] - The company aims to recover gross margins to 80% after a decline in the previous quarter due to a one-time, hardware-heavy government deployment [2] Growth Vectors and Acquisitions - CEO Jay Chaudhry highlights three major growth areas: AI Security, Zero Trust Everywhere, and Data Security Everywhere, which have collectively surpassed $1 billion in Annual Recurring Revenue (ARR) [3] - The acquisition of Red Canary is expected to contribute $95 million in ARR for the fiscal year [3] Market Sentiment and Strategic Positioning - Wall Street sentiment is largely positive, with Cantor Fitzgerald raising its price target to $365, driven by confidence in the Secure Access Service Edge (SASE) opportunity and anticipated synergies from the Red Canary acquisition [4]

Earnings Reports Overview - The current earnings season is nearing its end, with notable companies reporting during the holiday-shortened week [1] - Retail investors are particularly focused on earnings reports from major companies [1] Company-Specific Earnings Reports - WeRide Inc. (NASDAQ:WRD) and LexinFintech Holdings Ltd. (NASDAQ:LX) reported before the market opened on November 24, both showing better-than-expected results, leading to stock price increases [2] - Zoom Communications Inc. (NASDAQ:ZM) is expected to report third-quarter results after the market closes on November 24, with analysts predicting earnings of $1.44 per share and revenue of $1.21 billion [3] - Alibaba Group Holding Ltd. (NYSE:BABA) will release its Q2 earnings report before the market opens on November 25, with expectations of adjusted earnings of 81 cents per share and revenue of $34.43 billion [3] - Retailers Kohl's Corp. (NYSE:KSS) and Best Buy Co. Inc. (NYSE:BBY) are anticipated to provide insights into consumer behavior with their reports on November 25 [4] - Cleanspark Inc. (NASDAQ:CLSK), Dell Technologies Inc. (NYSE:DELL), and Zscaler Inc. (NASDAQ:ZS) are set to report after the market closes on November 25 [5] - Li Auto Inc. (NASDAQ:LI) and EHang Holdings Ltd. (NASDAQ:EH) will report their results before the market opens on November 26, alongside Deere & Co. (NYSE:DE), which has consistently beaten analyst expectations for 12 consecutive quarters [6] Market Schedule - U.S. stock markets will be closed on November 27 for the Thanksgiving holiday [8] - The stock market will have an early closure at 1 p.m. ET on November 28 [9]

Zscaler (ZS) shares snapped eight straight sessions of losses, as the stock was up 1.8% at $279.88 on Monday. The cloud security company fell over 7% in the preceding six sessions. The stock has fallen 6.7% so far this year, compared to a 16% rise in the ...

Group 1 - Zscaler, Inc. (NASDAQ:ZS) is highlighted as a stock worth buying, with expectations of record-breaking performance upon its upcoming earnings report [1] - The company operates in the cybersecurity sector, providing cloud-based security through its zero-trust platform and threat-defense tools [2] - Jim Cramer expressed a bullish sentiment towards Zscaler, indicating that it is performing as well, if not better, than other stocks in the same sector [2] Group 2 - Despite the positive outlook for Zscaler, there is a belief that certain AI stocks may offer greater upside potential and carry less downside risk [2] - The article suggests that Zscaler's performance could be influenced by broader market trends, including the onshoring trend and tariffs from the Trump era [2]

Core Insights - Earnings season is beginning to slow down, providing some relief after recent market volatility, with key companies like Alibaba, Zscaler, Deer & Company, and Dell Technologies set to report this week [1] Earnings Reports - This week features earnings reports from: - Alibaba (BABA) with an expected move of 7.2% - Dell Technologies (DELL) with an expected move of 9.4% - Zscaler (ZS) with an expected move of 9.9% - Deer & Company (DE) with an expected move of 5.5% [4] Implied Volatility - Implied volatility tends to be high before earnings reports due to market uncertainty, leading to increased demand for options [2] - After earnings announcements, implied volatility typically decreases to normal levels [2] Trading Strategies - Traders can utilize expected moves to structure trades: - Bearish traders may consider selling bear call spreads outside the expected range - Bullish traders might sell bull put spreads or look at naked puts for higher risk tolerance [4] - Neutral traders can explore iron condors, ensuring short strikes remain outside the expected range [5] Stock Screening - A stock screener can identify stocks with high implied volatility, using filters such as: - Total call volume greater than 5,000 - Market cap greater than 40 billion - IV Rank greater than 40% [6][7] Previous Earnings Performance - Last week's earnings move for TCOM was +2.2%, compared to an expected move of 6.2% [9]

Core Insights - Investors will have a break next week due to the market closure on November 27 for Thanksgiving, allowing time for assessment and reflection after a challenging week for Wall Street [2] - Despite the end of the U.S. government shutdown, some key economic reports are still being canceled due to insufficient survey data, impacting market expectations [3] Earnings Reports - Several companies are scheduled to report earnings next week, including Alibaba Group (BABA), Dell (DELL), Deere & Company (DE), Analog Devices (ADI), Best Buy (BBY), HP (HPQ), and DICK'S Sporting Goods (DKS) [4] - Specific earnings highlights include: - Monday: Agilent Technologies (A), Zoom Communications (ZM), Symbotic (SYM) [5] - Tuesday: Alibaba, Analog Devices (ADI), Dell Technologies, Best Buy (BBY), Autodesk (ADSK), Workday (WDAY), Zscaler (ZS), HP (HPQ), DICK'S Sporting Goods, J.M. Smucker (SJM), and NIO (NIO) [5] - Wednesday: Deere, Li Auto (LI) [5] - Thursday: Intuitive Machines (LUNR) [6] - Friday: Frontline Plc (FRO), Buckle, Inc. (BKE) [6]