Core Insights - Zscaler reported strong financial performance in Q2 2025, with revenue of $647.9 million and non-GAAP EPS of $0.78, both exceeding market expectations [2][3] - The company's growth is attributed to its Zero Trust and AI strategies, which are enhancing its cloud-native security solutions [1][5] Financial Performance - Revenue increased by 23.4% year-over-year from $525 million in Q2 2024 to $647.9 million in Q2 2025 [3][6] - Non-GAAP EPS rose by 23.8% from $0.63 in Q2 2024 to $0.78 in Q2 2025 [3][6] - Calculated billings reached $742.7 million, reflecting an 18.3% increase from the previous year [3] - Free cash flow grew by 42.2% from $100.8 million to $143.4 million [3][7] - Deferred revenue increased by 25% to $1,878.5 million, indicating strong subscription interest [7] Business Strategy - Zscaler focuses on its Zero Trust Exchange platform, which enhances security by allowing users access only to necessary resources [4] - The company is integrating AI into its platform to improve security outcomes and expand its market presence, particularly in federal agencies and international markets [5] Operational Highlights - The company upgraded its Zero Trust Network Access and integrated with RISE with SAP solutions to enhance data protection for remote users [8] - Phil Tee was appointed as EVP of AI Innovations to drive AI-driven security enhancements [8] Future Projections - For Q3 2025, Zscaler projects revenue between $665 million and $667 million, with non-GAAP EPS expected to be between $0.75 and $0.76 [10] - Annual revenue projections are between $2.640 billion and $2.654 billion, reflecting confidence in the demand for Zero Trust capabilities [10]

Financial Performance - Revenue grew 23% year-over-year to $647.9 million[8] - Calculated billings increased 18% year-over-year to $742.7 million[8] - Deferred revenue rose 25% year-over-year to $1,878.5 million[8] - GAAP net loss was $7.7 million, an improvement from a loss of $28.5 million in the same quarter last year[9] - Non-GAAP net income increased to $127.1 million from $99.4 million year-over-year[9] - Cash provided by operations was $179.4 million, representing 27% of revenue[9] - Free cash flow reached $143.4 million, or 22% of revenue[9] - Revenue for the three months ended January 31, 2025, was $647.9 million, a 23.3% increase from $525.0 million in the same period of 2024[25] - Gross profit for the six months ended January 31, 2025, reached $985.9 million, up 24.3% from $793.1 million in the prior year[25] - Non-GAAP gross profit for the three months ended January 31, 2025, was $520.8 million, reflecting a non-GAAP gross margin of 80%[31] - The net loss for the three months ended January 31, 2025, was $7.7 million, compared to a net loss of $28.5 million in the same period of 2024[25] - Non-GAAP income from operations for the six months ended January 31, 2025, was $274.6 million, with a non-GAAP operating margin of 22%[31] - Non-GAAP net income for the six months ended January 31, 2025, was $251.3 million, up 35.2% from $185.8 million in the same period of 2024[36] - Non-GAAP net income per share, diluted, for the three months ended January 31, 2025, was $0.78, compared to $0.63 for the same period in 2024, reflecting a 23.8% increase[36] Cash Flow and Assets - Cash and cash equivalents increased to $1.76 billion as of January 31, 2025, from $1.42 billion at the end of July 2024[27] - Total assets grew to $5.01 billion as of January 31, 2025, compared to $4.70 billion as of July 31, 2024[27] - Net cash provided by operating activities for the six months ended January 31, 2025, was $510.8 million, compared to $402.9 million in the same period of 2024[29] - Free cash flow for the six months ended January 31, 2025, was $435.3 million, a 33.7% increase from $325.5 million in the same period of 2024[36] - Free cash flow margin for the three months ended January 31, 2025, was 22%, compared to 19% for the same period in 2024[36] Operating Expenses and Tax - Operating expenses for the three months ended January 31, 2025, totaled $539.5 million, a 19.0% increase from $453.3 million in the same period of 2024[25] - The company recognized a tax benefit of $17.2 million due to the release of a valuation allowance on U.K. deferred tax assets during the three months ended January 31, 2025[25] - The company reported a non-GAAP effective tax rate of 23% for both the three and six months ended January 31, 2025[36] - The company plans to continue assessing its non-GAAP tax rate regularly, which is currently set at 23%[40] Future Guidance - Guidance for Q3 fiscal 2025 expects revenue of $665 million to $667 million[14] - Full year fiscal 2025 revenue guidance is approximately $2.640 billion to $2.654 billion[14] Product Development - Introduced the industry's first Zero Trust Segmentation solution for branches and cloud environments[9] Deferred Revenue - Total deferred revenue at the end of the period was $1.88 billion, up from $1.50 billion at the end of the same period in 2024[36] Stock-Based Compensation - Stock-based compensation expense for the three months ended January 31, 2025, was $176.4 million, compared to $145.5 million for the same period in 2024[36]

Second Quarter Highlights Revenue grows 23% year-over-year to $647.9 millionCalculated billings grows 18% year-over-year to $742.7 millionDeferred revenue grows 25% year-over-year to $1,878.5 millionGAAP net loss of $7.7 million compared to GAAP net loss of $28.5 million on a year-over-year basis Non-GAAP net income of $127.1 million compared to non-GAAP net income of $99.4 million on a year-over-year basis SAN JOSE, Calif., March 05, 2025 (GLOBE NEWSWIRE) -- Zscaler, Inc. (Nasdaq: ZS), the leader in cloud ...

Core Viewpoint - Zscaler Inc is set to report its second-quarter earnings, with Wall Street expecting an EPS of 69 cents and revenues of $635.56 million, while the stock has experienced a decline of 7.09% over the past year but is up 5.54% year-to-date [1] Group 1: Stock Performance and Trends - The stock is currently in a strongly bearish trend, trading below its five-day, 20-day, and 50-day exponential moving averages, with a current price of $192.17 [2] - Key simple moving averages indicate downward momentum, with the eight-day at $193.62, 20-day at $203.06, and 50-day at $195.44 [2] - The Moving Average Convergence Divergence (MACD) indicator at negative 2 suggests that bearish momentum remains intact, although there are signs of buying pressure [3] Group 2: Technical Indicators - Zscaler's 200-day simple moving average at $188.51 is below the current stock price, indicating longer-term support [3] - The Relative Strength Index (RSI) at 43.06 suggests that the stock is not yet oversold but may be approaching a level where buyers could step in [3] Group 3: Analyst Ratings and Price Targets - The consensus analyst rating on Zscaler stock is currently a Buy, with a price target of $227.79 [5] - Recent analyst ratings from Rosenblatt, Barclays, and Mizuho imply a 15.59% upside for Zscaler stock, with an average price target of $221.67 [5]

Zscaler, Inc. ZS will release its second-quarter financial results, after the closing bell, on Wednesday, March 5.Analysts expect the San Jose, California-based company to report quarterly earnings at 69 cents per share, down from 76 cents per share in the year-ago period. Zscaler projects quarterly revenue of $635.35 million, compared to $525 million a year earlier, according to data from Benzinga Pro.On Dec. 2, 2024, Zscaler reported first-quarter revenue of $628 million, beating the consensus estimate of ...

Core Viewpoint - Zscaler is set to report its second-quarter fiscal 2025 results, with expectations of revenue growth and a decline in earnings per share compared to the previous year [1][2][3]. Revenue Expectations - Zscaler anticipates revenues between $633 million and $635 million for the second quarter of fiscal 2025, with a Zacks Consensus Estimate of $634.1 million, indicating a year-over-year growth of 20.78% [2]. - Revenue estimates from Channel Partners and Direct Customers are projected at $577.1 million and $56.2 million, respectively, with a remaining performance obligation of approximately $4.2 billion at the end of the quarter [10]. Earnings Projections - The company expects non-GAAP earnings per share in the range of 68-69 cents, with the Zacks Consensus Estimate also at 69 cents per share, reflecting a year-over-year decline of 9.2% [3][4]. Market Dynamics - Strong demand for Zscaler's security and networking solutions is expected to drive its second-quarter results, particularly due to the growth in the global security space and the adoption of its Zero Trust Exchange platform [7]. - The rising adoption of Software-Defined Wide Area Network (SD-WAN) solutions is projected to be a primary driver, with the market size expected to reach $80.91 billion by 2034, growing at a CAGR of 31.6% from $5.36 billion in 2024 [8]. Product and Customer Retention - Zscaler's core products, including Zscaler Internet Access and Zscaler Private Access, have been instrumental in customer retention, with new features added to its Zero Trust Exchange aiding in product portfolio expansion and customer acquisition [9]. Investment and Expenses - The company has seen a year-over-year increase of 15.6% in non-GAAP sales and marketing expenses and 31.6% in non-GAAP research and development costs, which may impact profitability in the near term [11]. - Zscaler has significantly increased its R&D expenses to enhance its cloud platform, which, while beneficial in the long run, is currently affecting margins and profit growth [19]. Stock Performance and Valuation - Over the past year, Zscaler's shares have decreased by 8.4%, underperforming the Zacks Security industry's growth of 22.3% and peers in the cloud-based security space [12]. - Zscaler's stock is currently trading at a forward 12-month price-to-sales ratio of 10.24X, which is lower than the industry's 13.71X, indicating potential undervaluation [14]. Long-term Outlook - The company is well-positioned to benefit from the increasing demand for cybersecurity solutions driven by data breaches and digital transformation strategies [16]. - A strong presence across various verticals helps mitigate the impact of macroeconomic challenges, and recent acquisitions have contributed positively to its portfolio [17].

Core Insights - Zscaler (ZS) is expected to report quarterly earnings of $0.69 per share, reflecting a year-over-year decline of 9.2% [1] - Revenue projections stand at $634.07 million, indicating a 20.8% increase from the same quarter last year [1] - There have been no revisions in the consensus EPS estimate over the past 30 days, suggesting stability in analyst projections [1] Revenue Estimates - Analysts estimate 'Revenues- Direct Customers' to be $63.60 million, representing a 43.2% increase from the prior-year quarter [4] - 'Revenues- Channel Partners' are forecasted to reach $569.57 million, indicating an 18.5% increase from the previous year [4] Other Key Metrics - 'Billings' are projected to be $728.57 million, up from $627.60 million reported in the same quarter last year [5] - 'Remaining Performance Obligations' are expected to be $4.38 billion, compared to $3.61 billion a year ago [5] - The 'Dollar-Based Net Retention Rate' is projected at 114.8%, down from 117% in the previous year [5] Stock Performance - Zscaler shares have shown a return of -5.3% over the past month, compared to a -2.4% change in the Zacks S&P 500 composite [6] - The company holds a Zacks Rank 3 (Hold), indicating expected performance in line with the overall market [6]

Core Insights - Zscaler, Inc. has launched Zscaler Asset Exposure Management, a solution aimed at improving how organizations manage their cyber asset risks, forming part of their Continuous Threat Exposure Management offerings [1][4] - The solution consolidates data from numerous sources to provide organizations with a precise inventory of assets and visibility into security gaps, thereby mitigating cyber risks [1][3] Group 1: Challenges in Asset Management - Organizations often face difficulties in maintaining an accurate inventory of their assets, leading to reliance on spreadsheets, which complicates risk assessment and remediation prioritization [2] - This challenge is particularly critical in regulated industries like healthcare and financial services, where non-compliance can incur significant fines [2] Group 2: Features of Zscaler Asset Exposure Management - Built on Zscaler's Data Fabric for Security, the new solution integrates data from hundreds of sources, including Zscaler's cloud security platform, to provide a comprehensive view of assets and associated risks [3] - The platform processes over 500 billion security transactions daily, offering extensive visibility into customer assets and risks [3] - More than 50 million devices utilize Zscaler agents to collect and share telemetry, enhancing visibility into assets across branches and factories [3] Group 3: Benefits and Expectations - Zscaler Asset Exposure Management enables organizations to create an accurate asset inventory, identify coverage gaps, enhance data accuracy, and mitigate risks through automated workflows [6] - Customers can expect significant time savings in manual work and improved asset risk management capabilities [5] - The integration of unique telemetry with third-party data enhances asset visibility and security insights, providing a competitive advantage in identifying asset risks [5][6]

Group 1 - Zscaler, Inc. has established a strong reputation due to its multi-tenant distributed cloud security platform [1] - The company has had a solid start in 2025, with its stock showing positive performance year-to-date [1]

Company Performance - Zscaler's stock closed at $214.67, reflecting a -1.01% change from the previous day, underperforming the S&P 500's gain of 0.24% [1] - Over the last month, Zscaler's shares increased by 13.06%, outperforming the Computer and Technology sector's gain of 1.76% and the S&P 500's gain of 2.37% [1] Upcoming Financial Results - Zscaler is set to announce its earnings on March 5, 2025, with analysts expecting earnings of $0.69 per share, indicating a year-over-year decline of 9.21% [2] - The consensus estimate for quarterly revenue is $634.07 million, representing a 20.78% increase from the same period last year [2] Annual Estimates - For the annual period, Zacks Consensus Estimates project earnings of $2.99 per share and revenue of $2.64 billion, reflecting changes of -6.27% and +21.58% respectively from the previous year [3] - Recent changes to analyst estimates for Zscaler may indicate shifting business dynamics, with positive revisions suggesting a favorable business outlook [3] Valuation Metrics - Zscaler currently holds a Zacks Rank of 2 (Buy), with the Zacks Consensus EPS estimate increasing by 34.4% in the past month [5] - The company has a Forward P/E ratio of 72.56, which is higher than the industry's average Forward P/E of 67.06 [5] Industry Context - Zscaler's PEG ratio stands at 5.38, compared to the average PEG ratio of 3.07 for the Security industry, indicating a premium valuation [6] - The Security industry is part of the Computer and Technology sector, which has a Zacks Industry Rank of 20, placing it in the top 8% of over 250 industries [6]