Summary of Zscaler (ZS) 2025 Conference Call Company Overview - **Company**: Zscaler (ZS) - **Industry**: Cybersecurity, specifically focusing on Secure Access Service Edge (SASE) and Zero Trust security models Key Points and Arguments Market Dynamics - SASE is a rapidly growing space with increasing competition and new entrants [1] - Zscaler is experiencing accelerating order bookings and growth beyond its historical markets of ZIA (Zscaler Internet Access) and ZPA (Zscaler Private Access) [1][2] Growth Opportunities - Zscaler identifies three major areas of opportunity: 1. Data security, which is becoming increasingly complex, especially with AI integration [5] 2. Agentic operations, leveraging AI to enhance security and IT operations [5] 3. Expansion into new markets beyond traditional offerings [5][12] Zero Trust Security Model - The concept of Zero Trust is evolving, with a shift from user-centric to encompassing cloud workloads, IoT, and AI agents [7][9] - Zscaler's Zero Trust Exchange is positioned as a comprehensive solution for secure communication across various entities [9] Product Development and Innovation - Zscaler has expanded its offerings to include a B2B collaboration exchange and enhanced capabilities for securing AI applications [9] - The company emphasizes the importance of a single vendor for data protection to simplify complex data protection policies [11] Customer Engagement and Sales Strategy - The sales approach has shifted from transactional to account-focused, enhancing customer relationships and sales productivity [62] - Zscaler's solutions are designed to reduce costs significantly for customers, with examples of cost reductions of 50-70% for large enterprises [33] Competitive Landscape - Zscaler faces competition from traditional firewall companies that are attempting to pivot to SASE solutions, but the company believes these offerings do not meet the true Zero Trust criteria [38][39] - The company maintains a strong brand reputation among CIOs and CISOs, focusing on ROI and value delivered rather than just pricing [44] Financial Performance and Metrics - Zscaler reported over $350 million in Annual Recurring Revenue (ARR) from data security, indicating strong growth potential in this area [75] - The company is focused on upselling existing customers, with a reported 40% increase in new logo Annual Contract Value (ACV) year-over-year [56] Data Protection Strategy - Zscaler's approach to data security emphasizes securing data rather than the network itself, positioning itself as a leader in Data Loss Prevention (DLP) [69] - The company has developed a flexible pricing model (Z Flex) to allow customers to choose and adapt their data protection modules according to their needs [78] Future Outlook - Zscaler is optimistic about the future, with plans to expand its Zero Trust offerings to branches and workloads, indicating a phased approach to market penetration [37][50] - The company is committed to continuous innovation and customer satisfaction, aiming to delight customers and win more business [86] Additional Important Insights - The transition to Zero Trust is seen as essential for modern cybersecurity, moving away from traditional firewalls and SD WANs [26] - Zscaler's focus on simplifying security operations and reducing complexity is viewed as a critical factor for resilience in enterprises [34][35] - The company acknowledges the presence of late adopters in the market but believes that its solutions will eventually become mainstream as more enterprises recognize the need for Zero Trust [36]

Core Points - CISO Global Inc. has successfully completed its SOC 2 Type II examination, validating its data privacy practices and security controls [1][2] - This marks the third consecutive year that CISO Global has achieved this certification, reflecting its commitment to security and operational excellence [3] - The SOC 2 audit assesses organizations based on five Trust Service Criteria: security, availability, processing integrity, confidentiality, and privacy [3] - A-LIGN, the auditing firm, emphasizes the importance of this achievement as a signal of trust and security for customers [4] Company Overview - CISO Global, Inc. is an industry leader in AI-powered cybersecurity software, managed cybersecurity services, and compliance solutions [5] - The company is headquartered in Scottsdale, Arizona, and focuses on protecting organizations from emerging cyber threats while ensuring compliance with regulations [5] Auditing Firm Overview - A-LIGN is recognized as a leading provider of cybersecurity compliance programs, offering services such as SOC 2, ISO 27001, HITRUST, FedRAMP, and PCI [6] - A-LIGN is noted for its expertise in conducting efficient audits and providing high-quality final reports [4][6]

Core Viewpoint - CrowdStrike is currently in its 8th Phase of the Adhishthana Cycle, and while the stock appears bullish, there are indications that recent gains may not be sustainable, warranting caution among investors [1][9]. Group 1: Current Position and Alignment - CrowdStrike has maintained an 85.71% alignment with the Adhishthana Principles, which forecast stock behavior through cyclical analysis [2]. - The stock is completing a Cakra, a curved bullish channel spanning Phases 4 through 8, which is expected to guide price movement until the end of Phase 8 [8][11]. Group 2: Key Structural Elements - In Phase 6, CrowdStrike established a Level of Nirvana at $286.11, which serves as a critical valuation anchor for future phases [5]. - The Cakra channel is currently respected, and a breakout above this channel during Phase 8 is deemed highly unlikely, with true breakouts expected in Phase 9 [11][12]. Group 3: Future Outlook - A retest of the lower boundary near the Nirvana level of $286.11 is likely before any decisive breakout occurs [13]. - Investors holding long positions should consider hedging their exposure, while new entrants may benefit from waiting for the stock to approach the Nirvana level for a more favorable entry point [13].

Core Insights - Okta, a leading cybersecurity firm specializing in identity and access management, has seen a stock decrease of approximately 10% over the last month despite reporting strong first-quarter earnings that exceeded analyst expectations [2][3] - The company's stock has increased nearly 30% year-to-date, presenting an attractive opportunity for investors [2] Financial Performance - In Q1, Okta's revenue grew 12% year-over-year to $688 million, surpassing the forecast of $678 million to $680 million [3] - Subscription revenue also rose 12% to $673 million, while adjusted EPS increased 24% year-over-year to $0.86 [3] - The company reported positive free cash flow of $238 million for the quarter, marking an 11% year-over-year growth [3] - The net dollar retention rate was 106%, down from 111% a year prior [3] Growth Forecast - Okta has maintained its fiscal 2026 revenue forecast of $2.85 billion to $2.86 billion, indicating a growth of 9-10% [4] - For Q2, the company projects revenue growth of 10% to $710-$712 million, with adjusted EPS of $0.83-$0.84 [4] Market Outlook - The overall cybersecurity market is expected to grow significantly, with investments projected to exceed $298 billion annually by 2028 [5] - Okta's identity management platform is crucial for securing access across various applications, especially as companies adopt cloud-based solutions [5] - Management has noted strong demand for new offerings, such as Identity Governance and Privileged Access [5] Valuation Analysis - Okta has a market capitalization of $17 billion and a price-to-sales (P/S) ratio of approximately 6x based on fiscal 2026 revenue estimates, which is reasonable compared to other cybersecurity stocks [6] - However, trading at 25 times its trailing free cash flow, Okta stock appears somewhat expensive given its low-teens revenue and free cash flow growth [6]

Core Viewpoint - Castellum, Inc. has successfully retired its promissory note with the Buckhout Charitable Remainder Trust 15 months ahead of schedule, marking a significant improvement in its financial position and balance sheet leverage [1][5]. Financial Performance - The retirement of the note signifies a milestone in reducing the financing burden from the acquisition of Corvus Consulting, LLC, with total long-term debt decreasing from over $12 million in December 2023 to less than $5 million [2]. Company Overview - Castellum, Inc. operates in the cybersecurity, electronic warfare, and software engineering services sectors, primarily focusing on the federal government [3].

Group 1: Stock Splits and Market Performance - Smart investors are attracted to stock splits as they often lead to market-beating returns, with stocks that split historically outperforming the S&P 500 by 13 percentage points in the year following the announcement [1] - Over the last three years, Meta Platforms and CrowdStrike have returned 255% and 185%, respectively, making them candidates for stock splits [2] Group 2: Meta Platforms - Meta Platforms owns four of the seven most popular social media platforms, providing a competitive advantage in sourcing consumer data and targeting advertising campaigns [5] - The company reported a 16% increase in revenue to $42.3 billion, with a 3 percentage point expansion in operating margin and a 37% increase in GAAP net income to $6.43 per diluted share [6] - Meta aims to automate the entire ad creation process using AI by 2026, with Wall Street expecting earnings to grow at 18% annually over the next three years [8] Group 3: CrowdStrike - CrowdStrike is a cybersecurity leader in endpoint protection, with a platform that includes 30 modules addressing various markets, including cloud security and identity threat detection [9] - The company reported a 20% increase in revenue to $1.1 billion, although non-GAAP net income fell 8% to $0.73 per diluted share due to increased spending on go-to-market capabilities [10] - CrowdStrike's addressable market is valued at $250 billion by 2029, and Wall Street estimates adjusted earnings will grow at 13% annually through fiscal 2027 [12][13]

Core Insights - Nikesh Arora, CEO of Palo Alto Networks, has joined Uber's board of directors, indicating a strategic move for the company amid executive changes [1][2] - The appointment comes during a significant executive shakeup at Uber, including the departure of head of delivery Pierre-Dimitri Gore-Coty after 13 years and the promotion of Andrew Macdonald to president and COO [2] - Arora expressed enthusiasm about joining Uber at a pivotal time for the company, particularly in the realm of autonomous mobility [3] Company Developments - Uber is undergoing a broader executive restructuring, which includes notable leadership changes [2] - The addition of Arora to the board is seen as a strategic enhancement, given his extensive experience in technology and leadership roles at major companies [3][4] - Uber's CEO, Dara Khosrowshahi, praised Arora's capabilities and expressed excitement about his contributions to the company's long-term strategy [4]

Core Insights - CrowdStrike Holdings Inc. reported its first quarter earnings, beating earnings per share estimates but falling short on revenue guidance, leading to a stock decline of over 6% [1][3][5] - The company's revenue guidance for the current quarter was between $1.145 billion and $1.152 billion, below analyst expectations of $1.23 billion [4] - Despite the short-term dip, analysts suggest this may present a buying opportunity, as the stock is not expected to decline significantly further [2][10] Financial Performance - Topline revenue for the quarter was $1.10 billion, in line with expectations of $1.11 billion, representing a 20% year-over-year increase [5] - Annual recurring revenue increased by 22% year-over-year [5] - Earnings per share (EPS) of 73 cents exceeded forecasts of 66 cents and was 265% higher year-over-year [5] Analyst Sentiment - DZ Bank downgraded CRWD stock from Strong Buy to Strong Sell with a price target of $370, reflecting concerns about the stock being priced for perfection [6] - The average 12-month price target for CrowdStrike is $445.02, with a moderate buy rating based on 46 analyst ratings [7] - Analysts are optimistic about the company's long-term outlook, with expectations of business acceleration in the second half of the year [9] Market Reaction - Following the earnings report, at least a dozen analysts have increased their price targets for the stock, with some predicting a potential price increase of 15% or more from current levels [9][11] - Early trading indicated that investors were already responding positively, with CRWD stock recovering about half of its post-earnings dip by midday [11]

Group 1 - CrowdStrike is a cybersecurity firm that faced negative headlines about a year ago due to a faulty security update impacting the airline industry among others [1] - Since the incident, the company has managed to recover and improve its standing in the market [1]

Fastly (FSLY) FY Conference Summary Company Overview - Fastly has transitioned from a content delivery network (CDN) to an edge delivery platform, focusing on delivering high-quality user experiences for applications, websites, and streaming services [6][8] - The company emphasizes partnerships with customers to provide fast, safe, and engaging web experiences [6] Key Points Business Model and Strategy - Fastly's edge platform includes content delivery, edge security (DDoS, bot mitigation, web application firewall), edge compute, and observability [7] - The transition to a full edge platform has diversified Fastly's customer base beyond media and publishing to include high-tech, retail, e-commerce, hospitality, and healthcare [8] - The company reduced revenue concentration from 40% in top 10 accounts to 32%, indicating a successful diversification strategy [10] - Fastly achieved 17% growth outside the top 10 accounts last quarter, showcasing the effectiveness of its platform expansion [10] Financial Performance and Margins - A more diversified customer base is expected to lead to improved margin potential and customer retention [12] - The exit of competitors like Edgio, StackPath, and Lumen has created a favorable pricing environment for Fastly, enhancing gross margins and customer loyalty [14] - Fastly's security portfolio is anticipated to increase customer stickiness and improve gross margins as more customers adopt multiple products [28] Cybersecurity Developments - Fastly invested heavily in R&D for cybersecurity in 2024, launching new products such as bot mitigation and a turnkey DDoS solution [16][17] - The company aims to enhance its go-to-market strategy with strong leadership in sales and marketing focused on security [17] - Fastly's web application firewall, developed from an acquisition, offers high efficacy and automatic protection, reducing total cost of ownership for customers [20] AI and Edge Compute Opportunities - Fastly is exploring opportunities in AI, particularly in AI bot detection and providing infrastructure for training datasets [30][31] - The company launched an AI accelerator to lower costs and improve response times for AI applications [32] - Fastly's edge compute market is growing, with a reported 67% growth in serverless compute using WebAssembly technology [38] Market Trends and Customer Focus - There is a growing demand for high-performance solutions that enhance user experience, which aligns with Fastly's offerings [39] - Traditional enterprises are increasingly investing in sophisticated digital experiences, driving growth in Fastly's compute services [42] Additional Insights - Fastly's focus on delivering a complete edge solution positions it well against competitors who have exited the market due to high customer concentration and reliance on CDN revenue [14] - The company's strategy to integrate security with delivery services is expected to create a more defensible business model over time [26] - Fastly's ability to provide a seamless experience for dynamic content at the edge is crucial for attracting new customers and retaining existing ones [40]