Zscaler(ZS) - 2024 Q4 - Annual Results

Financial Performance - Revenue for Q4 fiscal 2024 increased by 30% year-over-year to $592.9 million[1] - Calculated billings grew 27% year-over-year to $910.8 million[1] - Deferred revenue reached $1,895.0 million, reflecting a 32% year-over-year increase[1] - Full year fiscal 2024 revenue increased by 34% year-over-year to $2,167.8 million[5] - Revenue for the three months ended July 31, 2024, was $592.868 million, a 30.3% increase from $455.006 million in the same period of 2023[24] - Gross profit for the three months ended July 31, 2024, was $462.663 million, up from $352.324 million in the same period of 2023, representing a 31.3% increase[24] - Total operating expenses increased to $489.613 million for the three months ended July 31, 2024, compared to $396.876 million in the same period of 2023, reflecting a 23.3% rise[24] - The company reported a net cash provided by operating activities of $779.846 million for the year ended July 31, 2024, compared to $462.343 million for the year ended July 31, 2023[28] - Free cash flow for the quarter was $136.318 million, compared to $101.301 million in the prior year, reflecting a 34.6% increase[35] Profitability - GAAP net loss narrowed to $14.9 million from $30.7 million in Q4 fiscal 2023[3] - Non-GAAP net income for Q4 was $140.6 million, up from $100.9 million year-over-year[3] - The net loss for the three months ended July 31, 2024, was $14.878 million, an improvement from a net loss of $30.674 million in the same period of 2023[24] - Non-GAAP net income for the quarter was $140.596 million, up from $100.857 million year-over-year, representing a 39.4% increase[33] - Non-GAAP operating margin improved to 22% for the quarter, compared to 19% in the same quarter last year[33] - Non-GAAP gross profit for the three months ended July 31, 2024, was $481.036 million, compared to $367.105 million in the same period of 2023, reflecting a 30.9% increase[29] Cash Flow and Liquidity - Cash provided by operations was $203.6 million, or 34% of revenue, compared to 30% in Q4 fiscal 2023[4] - Cash and cash equivalents at the end of the period were $1.423 billion, an increase from $1.262 billion at the end of the same period in 2023[28] - Free cash flow margin for the quarter was 23%, compared to 22% in the same quarter last year[37] Assets and Liabilities - Total assets as of July 31, 2024, were $4.705 billion, up from $3.608 billion as of July 31, 2023, indicating a 30.4% growth[26] - Total liabilities increased to $3.431 billion as of July 31, 2024, compared to $2.883 billion as of July 31, 2023, marking a 19.0% increase[26] - Deferred revenue as of July 31, 2024, was $1.895 billion, an increase from $1.440 billion as of July 31, 2023, representing a 31.5% growth[26] Future Outlook - For fiscal 2025, the company expects revenue of approximately $2.60 billion to $2.62 billion[11] - The company plans to establish a projected non-GAAP tax rate of 23% effective August 1, 2024, to enhance consistency in reporting[39] - The company plans to implement a long-term projected non-GAAP tax rate of 23% starting August 1, 2024, to enhance consistency in reporting[43] Innovations and Market Position - Zscaler's cloud platform surpassed half a trillion daily transactions, indicating strong customer adoption[7] - The company launched multiple innovations in AI Data Protection capabilities to enhance data security[8] Non-GAAP Measures - The company emphasizes that non-GAAP measures should not be viewed in isolation and are subject to limitations compared to GAAP measures[42] - Zscaler's restructuring and other charges are excluded from non-GAAP measures as they do not reflect ongoing operational performance[43] - The company aims to provide better consistency and comparability with past performance through its non-GAAP financial measures[42] - Non-GAAP net income per share, diluted, is calculated by excluding stock-based compensation and other non-recurring charges, providing a clearer view of profitability[44] - Non-GAAP operating margin is defined as non-GAAP income from operations as a percentage of revenue, highlighting operational efficiency[44] - Calculated billings reflect revenue plus changes in deferred revenue, aiming to capture amounts invoiced for subscriptions to the cloud platform[44]