Zscaler Reports Fourth Quarter and Fiscal 2025 Financial Results

Core Insights - Zscaler achieved a significant milestone with over $3 billion in Annual Recurring Revenue (ARR) and the highest operating margin in a quarter, driven by demand for its Zero Trust and AI security solutions [3][6][11] - The company reported a 21% year-over-year revenue growth to $719.2 million for Q4 fiscal 2025, with a 22% increase in ARR to $3.015 billion [6][7] - Zscaler's calculated billings grew by 32% year-over-year to $1.202 billion, and deferred revenue increased by 30% to $2.468 billion [6][7] Financial Highlights for Q4 Fiscal 2025 - Revenue reached $719.2 million, a 21% increase from the previous year [6][7] - GAAP net loss was $17.6 million, compared to a loss of $14.9 million in Q4 fiscal 2024, while non-GAAP net income was $146.7 million, up from $115.8 million [6][7] - Cash provided by operations was $250.6 million, representing 35% of revenue, with free cash flow of $171.9 million, or 24% of revenue [7][8] Full Year Fiscal 2025 Financial Highlights - Total revenue for the fiscal year was $2.673 billion, a 23% increase year-over-year [6][8] - GAAP net loss for the year was $41.5 million, an improvement from a loss of $57.7 million in fiscal 2024, while non-GAAP net income rose to $534.8 million from $414.6 million [6][8] - Cash provided by operations for the year was $972.5 million, or 36% of revenue, with free cash flow of $726.7 million, also 27% of revenue [8] Recent Business Developments - Zscaler acquired Red Canary to enhance its AI-driven threat intelligence and automation capabilities, aiming to improve cyber risk management [11] - The company launched AI-powered security innovations, including Zscaler AI Guard, to protect sensitive data and ensure regulatory compliance [11] - Zscaler published a report indicating a 146% increase in ransomware attacks, highlighting the need for a comprehensive Zero Trust strategy [11] Financial Outlook - For Q1 fiscal 2026, Zscaler expects revenue between $772 million and $774 million, with non-GAAP income from operations projected at $166 million to $168 million [10] - For the full year fiscal 2026, revenue is anticipated to be approximately $3.265 billion to $3.284 billion, with non-GAAP income from operations expected to be between $728 million and $736 million [10]