Latest news with #CapEx
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3 days ago
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Zscaler Inc (ZS) Q3 2025 Earnings Call Highlights: Strong Growth Amid Economic Challenges
Revenue: $678 million, up 23% year over year and 5% sequentially. Annual Recurring Revenue (ARR): Approximately $2.9 billion, representing 23% year-over-year growth. Remaining Performance Obligations (RPO): $4.978 billion, up 30% year over year. Calculated Billings: $785 million, up 25% year over year. Gross Margin: 80.3%, compared to 81.4% in the year-ago quarter. Operating Margin: Approximately 22%, comparable year over year. Free Cash Flow Margin: 18%, including data center CapEx at 11% of revenue. Cash and Cash Equivalents: Approximately $3 billion. Guidance for Q4 Revenue: $705 million to $707 million, reflecting approximately 19% year-over-year growth. Full-Year Fiscal 2025 Revenue Guidance: $2.659 billion to $2.661 billion, reflecting approximately 23% year-over-year growth. Full-Year Fiscal 2025 Free Cash Flow Margin Guidance: Approximately 25.5% to 26%. Warning! GuruFocus has detected 4 Warning Sign with ZS. Release Date: May 29, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Zscaler Inc (NASDAQ:ZS) achieved its best Q3 with TCV bookings of over $1 billion and remaining performance obligations nearing $5 billion. The company reported a strong year-over-year growth in new logo ACV of over 40% and total new ACV up double digits. Zscaler Inc (NASDAQ:ZS) maintained a robust annual recurring revenue (ARR) of approximately $2.9 billion, marking the third consecutive quarter of 23% year-over-year growth. The company's free cash flow margin of 28% combined with a 24% revenue growth resulted in a Rule of 52 performance, surpassing the industry benchmark of Rule of 40. Zscaler Inc (NASDAQ:ZS) continues to expand its platform with significant growth in Zero Trust Everywhere, Data Security Everywhere, and Agentic Operations, with these categories approaching $1 billion in ARR. The macroeconomic environment remains challenging, with ongoing economic uncertainty causing customers to be cautious about IT spending. Zscaler Inc (NASDAQ:ZS) faces increased scrutiny of large deals, which could impact the timing and closure of significant contracts. The company's total gross margin decreased to 80.3% from 81.4% in the year-ago quarter, influenced by the introduction of new products optimized for faster go-to-market rather than margins. There is potential variability in the dollar-based net retention rate due to the company's success in selling bigger bundles and faster upsells, which could affect future metrics. The acquisition of Red Canary, valued at $675 million, is expected to be largely neutral to FY26 consensus operating margin, indicating limited immediate financial benefit. Q: How does Zscaler manage the expanding product portfolio and ensure sales focus, especially with the introduction of Z-Flex? A: Jay Chaudhry, CEO, explained that Zscaler uses a two-tier model where the core sales team covers all products with an account-centric approach, while specialized take-off teams focus on newer product areas. Z-Flex, a flexible purchasing program, evolved from customer demand for modularity and flexibility, allowing them to try and swap modules without repeated procurement cycles. The program has already contributed over $65 million in TCV bookings in its first quarter. Q: How is the macroeconomic environment affecting Zscaler's business, and what trends are being observed? A: Jay Chaudhry noted that while the overall spending environment remains challenging with tight budgets, cybersecurity, particularly Zero Trust architecture and AI security, remains a priority. Zscaler did not experience a softer April, likely due to not selling security appliances. The company continues to work closely with customers to reduce costs and become a strategic partner, translating into ARR growth. Q: Can you explain the structure and impact of Z-Flex deals on Zscaler's financial metrics? A: Remo Canessa, CFO, stated that Z-Flex deals are structured to provide customers with flexibility in adopting and swapping modules at predetermined pricing, reducing procurement cycles. These deals are typically longer in duration, moving from three to four or five years. Zscaler plans to transition from billing to ARR as a primary metric in fiscal '26, which aligns with the flexibility offered by Z-Flex. Q: How does the acquisition of Red Canary fit into Zscaler's strategy, and what benefits does it bring? A: Jay Chaudhry highlighted that Red Canary accelerates Zscaler's vision to become a leading player in the SOC market. The acquisition brings experienced detection and threat intel engineers, sophisticated agentic AI technology, and a seasoned go-to-market team. This complements Zscaler's existing data-fabric technology and enhances its security operations solutions. Q: What role does branch connector play in new customer wins, and how is it contributing to Zscaler's growth? A: Jay Chaudhry explained that the branch connector, now a plug-and-play appliance, simplifies branch infrastructure by integrating Zero Trust Branch connectivity and device segmentation. It has been instrumental in attracting new customers, with 59% of Zero Trust Branch buyers being new logos. The solution addresses customer pain points by eliminating the need for multiple legacy network devices. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
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3 days ago
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Champion Iron Ltd (CIAFF) Q4 2025 Earnings Call Highlights: Record Sales Amid Operational Challenges
Production: 3.2 million tonnes produced during the quarter. Concentrates Sold: Record 3.5 million tonnes sold. Revenue: $425 million. EBITDA: $130 million. Earnings Per Share (EPS): $0.08 per share. Cash Position Increase: $24 million. Capital Expenditure: $50 million on DRPF project and $50 million in sustaining CapEx. Available Liquidities: Approximately $1 billion. Dividend: $0.10 per share, eighth semiannual dividend declared. Operating Costs: Approximately CAD80 per tonne. Provisional Price Adjustment: Positive adjustment of $3.7 million. Stockpile Reduction: Decreased by about 300,000 tonnes to 2.6 million tonnes. Strip Ratio: Increased to about 1.15. Warning! GuruFocus has detected 9 Warning Signs with CIAFF. Release Date: May 29, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Champion Iron Ltd (CIAFF) set a record by selling 3.5 million tonnes of concentrates despite challenging winter logistics. The company successfully met or exceeded 13 out of 14 sustainability targets for fiscal year 2025, showcasing strong ESG performance. Champion Iron Ltd (CIAFF) increased its cash position by $24 million, even after significant investments in projects and sustaining CapEx. The company declared its eighth semiannual dividend of $0.10 per share, reflecting a strong financial position. Champion Iron Ltd (CIAFF) has a healthy balance sheet with about $1 billion in available liquidities, supporting future growth and stability. The company faced operational challenges due to grinding difficulties with harder ore at the Bloom Lake site, impacting throughput. Champion Iron Ltd (CIAFF) experienced higher operating costs at CAD80 per tonne due to semiannual shutdowns and lower production. The company had to sell its high-grade material at a discount in China due to market conditions and lack of long-term contracts. There is ongoing uncertainty in the global economy and potential reductions in steel output, which could impact future demand. Scheduled maintenance on the rail network and at the mine could affect production and shipment volumes in the coming quarters. Q: Can you provide more details on the ore hardness issue and its impact on operations? A: David Cataford, CEO, explained that the ore hardness affects throughput and recovery due to the autogenous mills used. The issue is not new, but the current strategy involves tackling the harder ore head-on to reduce stockpiles. This approach is temporary and not expected to persist throughout the mine's 18-year life. Q: Are you still facing discounts on Canadian iron ore sales? A: Yes, according to David Cataford, CEO, there are still discounts on the spot market for Canadian iron ore, primarily due to the lack of long-term contracts. The company plans to transition to DR-grade material and secure longer-term contracts to mitigate this issue. Q: What is the strategy for destocking iron ore concentrate at Bloom Lake? A: David Cataford, CEO, stated that the goal is to reduce stockpiles as quickly as possible, working closely with rail operators to maximize efficiency. The company is aligned with the rail operator to respect contracts and reduce stockpiles swiftly. Q: How is the demand for DR-grade material evolving, particularly in Asia? A: David Cataford, CEO, noted that while there is currently less appetite for higher-grade material in China, the focus is on selling DR-grade material to Europe, North Africa, and the Middle East. The company anticipates future demand increases as China implements stricter emissions regulations. Q: What is the marketing strategy for DR-grade material, and when are contracts expected? A: The strategy is to sell a distinct 69% DR-grade product, with initial blending during the plant ramp-up. David Cataford, CEO, expects to have contracts in place by the end of the calendar year, aiming for a win-win solution with clients. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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3 days ago
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Keysight Technologies, Inc. (KEYS): A Bull Case Theory
We came across a bullish thesis on Keysight Technologies, Inc. (KEYS) on Best Anchor Stocks' Substack. In this article, we will summarize the bulls' thesis on KEYS. Keysight Technologies, Inc. (KEYS)'s share was trading at $161.74 as of 22nd May. KEYS's trailing and forward P/E were 37.97 and 23.09 respectively according to Yahoo Finance. A team of engineers analyzing electronic components in a modern laboratory. Keysight Technologies delivered a standout quarter, outperforming expectations despite macroeconomic headwinds and customer CapEx volatility. Unlike many firms, Keysight benefits from exposure to strategic rather than discretionary CapEx, allowing it to defy typical cyclicality. This quarter marked the second consecutive quarter of growth, confirming the recovery is well underway. Strength was broad-based, with both its Communications Solutions Group (CSG) and Electronic Industrial Solutions Group (EISG) growing—EISG's first revenue increase after six quarters of declines. While gross margins contracted due to a $7 million tariff impact and an unfavorable sales mix—software sales dropped as a share of revenue—operating leverage was robust, with GAAP operating income rising 17% on 7% revenue growth. The gross margin dip was purely optical, as the revenue mix naturally shifts during cyclical recoveries. GAAP net income and cash flows were boosted by non-recurring items including a $112 million other income gain and a $60 million hedging windfall from the Spirent acquisition, which are not expected to recur. Management raised full-year revenue growth guidance from 5% to 6%, with EPS growth exceeding 10%, even with tariffs—an impressive feat given Keysight's long-standing guidance conservatism. Future upside exists from the Spirent and Ansys/Synopsys acquisitions, expected to enhance gross margins and expand software exposure. Though share repurchases may slow due to acquisitions, the company's strong cash generation supports ongoing buybacks. Tariffs remain a concern but are manageable due to a diversified supply chain. Meanwhile, strength in the European defense sector offers another tailwind. Overall, Keysight remains a compelling investment with strong execution, resilient demand, and attractive long-term prospects. Keysight Technologies, Inc. (KEYS) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 51 hedge fund portfolios held KEYS at the end of the fourth quarter which was 36 in the previous quarter. While we acknowledge the risk and potential of KEYS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than KEYS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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3 days ago
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Kalyani Forge Ltd (BOM:513509) Q4 2025 Earnings Call Highlights: Record Profits and Strategic ...
Total Income (Q4): 59.34 crores, up from 58.6 crores in the previous quarter and 56.82 crores in the same quarter last year. EBITDA (Q4): 6.74 crores, maintaining growth over the last three quarters. Profit After Tax (Q4): 2.23 crores, significantly higher than 71 lakhs in the same quarter last year. EBITDA Margin (Q4): 11.4%. Annual Revenue (FY25): 239.2 crores, flat compared to 240 crores last year. Annual Profit After Tax (FY25): 8.3 crores, the highest in 10 years, up from 4.6 crores last year. Annual EBITDA (FY25): 26.5 crores, up from 17.7 crores last year. EBITDA Margin (FY25): 11.1%, improved from 7-8% in previous years. Dividend Declared (FY25): ?4 per share, the highest in the last 5 years. New Order Wins (FY25): 115 crores, up from 95 crores in the previous year. CapEx (FY25): 24.4 crores, slightly lower than 26 crores in the previous year. Fixed Assets (End of Q4): 60.4 crores, with 15 crores in Capital Work in Progress. Release Date: May 28, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Kalyani Forge Ltd (BOM:513509) achieved its highest profit after tax in 10 years, reaching 8.3 crores in FY25, a significant increase from 4.6 crores the previous year. The company declared a dividend of ?4 per share for FY25, marking its highest dividend in the last five years. Kalyani Forge Ltd secured an all-time high in new order wins, totaling 115 crores in FY25, indicating strong business development efforts. The company has initiated a comprehensive CapEx program, with 24.4 crores invested in FY25 and plans for 25 crores in FY26, focusing on modernization and capacity expansion. Exports increased by 11% in FY25, with strategic plans to grow exports to 50% of total revenues in the coming years. Despite the increase in profits, the company's revenue remained flat at 239.2 crores in FY25, similar to the previous year's 240 crores. The company is facing challenges in increasing its top line, with a focus on improving operational efficiencies and sales mix rather than significant revenue growth. Kalyani Forge Ltd's asset turnover ratio is currently high compared to industry benchmarks, indicating potential inefficiencies in asset utilization. The company has taken on term loans to fund its CapEx, which could impact its bottom line if not managed carefully. There is uncertainty regarding the timeline for achieving the targeted 15% EBITDA margin, with no specific timeframe provided for reaching this goal. Q: In the last quarter, you mentioned a 350 crore order book. Now, you present a 115 crore new order win. Is this in addition to the 350 crore? Also, what do you expect for the top line in the next two years? A: The 350 crore figure was an overall order book value, including multi-year programs. The 115 crore is a peak annual value for these programs. Regarding the top line, we expect healthy growth next year, focusing on sample development and ramping up capacities for additional revenues. Q: What is the asset turnover payback period, expected margin at optimal revenue, and post-expansion potential revenue? A: Our current asset turnover is high compared to industry benchmarks. We aim for a 2:1 ratio, typical in the forging industry. Payback periods vary from 6 months to 2 years, depending on the project. Expected margins are proprietary, but we aim to maintain or increase them with efficient machinery. Q: What is the sustainable EBITDA margin, and what contributed to the margin improvement in FY25? A: Our current EBITDA margin is around 10-12%, with a long-term goal of 15%. The increase in profit is due to operational efficiency and improved sales mix, removing low-profit businesses. Q: Are you focusing more on the defense sector? A: We have started a project with a customer in the defense sector, focusing on our existing product portfolio. As we build capacity, we will explore more allied products, which is part of our long-term growth strategy. Q: What are your plans regarding the railway sector, and will the CapEx plan affect your bottom line? A: We are already in the railway business, making niche components for railway braking systems. We plan to grow our core business to fund new product development in railways and defense. The CapEx plan is managed to avoid additional debt impacting our bottom line. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
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3 days ago
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Tiger Brands Ltd (FRA:UG5A) (Q2 2025) Earnings Call Highlights: Strategic Moves and Financial Gains
Volume Growth: 2.6% growth in core business volumes. Operating Margin: Approaching 10%. Return on Invested Capital (ROIC): Closer to 20% when excluding averaging calculations. Gross Margin: On track to reach 30% and above. Cash Position: Significant cash on the balance sheet due to operational cash generation and disposals. Special Dividend: 1.8 billion rand special dividend declared. Total Dividend: 2.4 billion rand declared, including special and normal dividends. Share Buyback: 1.2 billion rand spent on share repurchases. Continuous Improvement Savings: 200 million rand achieved in the first half. Revenue Growth: Positive revenue growth with food inflation lower than the market. Working Capital Management: Exceptional performance with reduced net working capital days. CapEx Approvals: 1.8 billion rand approved for capital projects. Net Debt Position: Significant improvement, contributing to special dividend. Warning! GuruFocus has detected 8 Warning Signs with FRA:UG5A. Release Date: May 28, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Tiger Brands Ltd (FRA:UG5A) reported a 2.6% growth in core business volumes, marking a turnaround from previous declines. The company has successfully implemented continuous improvement programs, achieving cost savings ahead of targets. Portfolio reshuffling has been effective, with successful sales of non-core operations like Karachi and baby well-being. The company has a strong cash position due to operational cash generation and disposals, enabling special dividends and share buybacks. Operating margin is approaching 10%, and return on invested capital (ROIC) is on track, indicating improved financial health. The consumer market remains under pressure due to economic challenges, impacting affordability and demand. The company faces competitive pressures in the home and personal care segment, with significant challenges in aerosol supply and competitive activity. There are concerns about stranded costs from disposals, although efforts are being made to mitigate these through continuous improvement programs. The grains business, despite recent improvements, has historically underperformed, and the company is exiting the maize and chocolate confectionery markets due to strategic misalignment. The bakery segment faces capacity constraints, and while a new super bakery is planned, it will not be operational until late next year. Q: Can you explain the strategy behind the Mega DCs and how they will impact margins and sales? A: Thushen Govender, CFO: The Mega DCs consolidate six existing warehouses into one, reducing overheads and utilizing better technology for cost reduction. This is not about competing with retailers but enhancing supply chain efficiency. The Mega DCs are not directly linked to general trade distribution, which is managed through bakeries and sub-distributors. Q: What was the rationale behind selling the wheat mill along with the maize operations in Randfontein? A: Tjaart Kruger, CEO: The wheat mill was not supplying our bakeries but was focused on retail flour. Selling the entire facility, including the maize mills, was strategic due to surplus capacity in the industry. This allows us to optimize our wheat milling footprint and reduce conversion costs. Q: Could you elaborate on the capital allocation framework, especially regarding share buybacks, special dividends, and acquisitions? A: Tjaart Kruger, CEO: Our focus has been on fixing the base business. We are open to acquisitions that make strategic sense but will not pursue bolt-ons. Surplus cash will be managed through a combination of lowering dividend cover, special dividends, and share buybacks, depending on the share price valuation. Q: Why is Tiger Brands exiting the maize and chocolate confectionery markets? A: Tjaart Kruger, CEO: The maize industry has become highly fragmented, making it difficult to build a strong brand. We haven't been profitable in maize for years. In chocolate, we lack the competitive edge against larger players, and the category itself is not attractive. Exiting these markets allows us to focus on more profitable areas. Q: How has Tiger Brands' performance in bread been relative to competitors, especially outside top-end grocers? A: Tjaart Kruger, CEO: Our performance has been strong, particularly in Gauteng, where we are nearing capacity. We've resolved issues in KZN and are making progress in Cape Town. Overall, we've seen market share growth in both general trade and top-end retail, despite the competitive bakery industry. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
