Latest news with #JayChaudhry
Yahoo
2 days ago
- Business
- Yahoo
Zscaler Tops Q3 Estimates, Names New CFO
Zscaler (NASDAQ:ZS) continues to climb on Friday, surging 9% on regular trading Friday, following a Q3 fiscal 2025 beat, with revenue up 23% year-over-year to $678 million versus the $667.1 million consensus and adjusted EPS of $0.84 topping the $0.76 estimate. G Warning! GuruFocus has detected 5 Warning Sign with ZS. AAP net loss narrowed to $0.03 per share, well ahead of the $0.12 loss forecast. Looking ahead, Zscaler guided Q4 revenue of $705 million$707 million (versus $707.2 million expected) and EPS of $0.79$0.80 (vs. $0.77), and reiterated full-year revenue of $2.659 billion$2.661 billion. CEO Jay Chaudhry said surging AI adoption is driving demand for Zscaler's AI-centric security, noting investments to secure both public generative-AI apps and private models. The company also named Kevin Rubinveteran CFO of BetterUp and Alteryxas its new finance chief, aiming to propel Zscaler past $5 billion in ARR. Investors should care because strong beats, healthy guidance and Zscaler's AI security push signal durable growth in the cloud-security market as enterprises race to protect new AI deployments. 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
Yahoo
2 days ago
- Business
- Yahoo
Zscaler Tops Q3 Estimates, Names New CFO
Zscaler (NASDAQ:ZS) continues to climb on Friday, surging 9% on regular trading Friday, following a Q3 fiscal 2025 beat, with revenue up 23% year-over-year to $678 million versus the $667.1 million consensus and adjusted EPS of $0.84 topping the $0.76 estimate. G Warning! GuruFocus has detected 5 Warning Sign with ZS. AAP net loss narrowed to $0.03 per share, well ahead of the $0.12 loss forecast. Looking ahead, Zscaler guided Q4 revenue of $705 million$707 million (versus $707.2 million expected) and EPS of $0.79$0.80 (vs. $0.77), and reiterated full-year revenue of $2.659 billion$2.661 billion. CEO Jay Chaudhry said surging AI adoption is driving demand for Zscaler's AI-centric security, noting investments to secure both public generative-AI apps and private models. The company also named Kevin Rubinveteran CFO of BetterUp and Alteryxas its new finance chief, aiming to propel Zscaler past $5 billion in ARR. Investors should care because strong beats, healthy guidance and Zscaler's AI security push signal durable growth in the cloud-security market as enterprises race to protect new AI deployments. This article first appeared on GuruFocus.
CNBC
2 days ago
- Business
- CNBC
Zscaler jumps 8% on strong results fueled by AI growth
Zscaler shares jumped 8% Friday after reporting stronger-than-expected results in the third fiscal quarter driven by artificial intelligence and widespread adoption of its zero-trust security platform. "The proliferation of AI in all aspects of business is increasing the need for our AI security," said CEO Jay Chaudhry in a release. "We empower customers to securely adopt both public GenAI apps and their own private AI apps, and we are increasing our investments in this area." The cloud security software company said revenues grew 23% to $678 million from about $553 million in the year-ago period. That topped the LSEG estimate of $666 million. Zscaler reported adjusted earnings of 84 cents per share, topping the adjusted EPS of 75 cents per share expected by LSEG. Billings rose 25% to about $785 million, ahead of a $760 million estimate from StreetAccount. Zscaler's earnings come as a hopeful sign for a cybersecurity industry that has shown some pockets of weakness in a volatile macroeconomic environment. SentinelOne dropped after lowering its outlook, while Palo Alto Networks shares declined after missing on gross margin. The report "echoes the strength we noted in our preview, and begins to prove out the reacceleration story that the company has been pointing to over the past few quarters," wrote Morgan Stanley's Keith Weiss. Zscaler reported a net loss of $4.1 million, or a loss of 3 cents per share, for the quarter. Last year, net income came in at $19.1 million, or 12 cents per share. The company issued upbeat adjusted EPS guidance for the fiscal fourth quarter. Zscaler expects adjusted earnings to range between 79 cents and 80 cents a share, versus the 77 cents expected by LSEG. Along with its earnings, Zscaler appointed Kevin Rubin as its chief financial officer.
Yahoo
3 days ago
- Business
- Yahoo
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.
Yahoo
3 days ago
- Business
- Yahoo
Zscaler (NASDAQ:ZS) Exceeds Q1 Expectations
Cloud security platform Zscaler (NASDAQ:ZS) reported Q1 CY2025 results exceeding the market's revenue expectations , with sales up 22.6% year on year to $678 million. The company expects next quarter's revenue to be around $706 million, close to analysts' estimates. Its non-GAAP profit of $0.84 per share was 10.8% above analysts' consensus estimates. Is now the time to buy Zscaler? Find out in our full research report. Revenue: $678 million vs analyst estimates of $667 million (22.6% year-on-year growth, 1.6% beat) Adjusted EPS: $0.84 vs analyst estimates of $0.76 (10.8% beat) Adjusted Operating Income: $146.7 million vs analyst estimates of $141.8 million (21.6% margin, 3.4% beat) Revenue Guidance for Q2 CY2025 is $706 million at the midpoint, roughly in line with what analysts were expecting Adjusted EPS guidance for the full year is $3.19 at the midpoint, beating analyst estimates by 3.3% Operating Margin: -3.7%, down from -0.5% in the same quarter last year Free Cash Flow Margin: 17.6%, down from 22.1% in the previous quarter Billings: $784.5 million at quarter end, up 24.9% year on year Market Capitalization: $39.25 billion 'We delivered outstanding Q3 results as an increasing number of customers adopt our expanding Zero Trust Exchange platform. We enable customers to realize Zero Trust Everywhere while lowering operational cost and complexity,' said Jay Chaudhry, Chairman and CEO of Zscaler. After successfully selling all four of his previous cybersecurity companies, Jay Chaudhry's fifth venture, Zscaler (NASDAQ:ZS) offers software-as-a-service that helps companies securely connect to applications and networks in the cloud. A company's long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last three years, Zscaler grew its sales at an exceptional 38% compounded annual growth rate. Its growth surpassed the average software company and shows its offerings resonate with customers, a great starting point for our analysis. This quarter, Zscaler reported robust year-on-year revenue growth of 22.6%, and its $678 million of revenue topped Wall Street estimates by 1.6%. Company management is currently guiding for a 19.1% year-on-year increase in sales next quarter. Looking further ahead, sell-side analysts expect revenue to grow 19.3% over the next 12 months, a deceleration versus the last three years. Still, this projection is healthy and indicates the market sees success for its products and services. Unless you've been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) stock benefiting from the rise of AI. Click here to access our free report one of our favorites growth stories. Billings is a non-GAAP metric that is often called 'cash revenue' because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract. Zscaler's billings punched in at $784.5 million in Q1, and over the last four quarters, its growth was impressive as it averaged 20.8% year-on-year increases. This alternate topline metric grew slower than total sales, meaning the company recognizes revenue faster than it collects cash - a headwind for its liquidity that could also signal a slowdown in future revenue growth. The customer acquisition cost (CAC) payback period represents the months required to recover the cost of acquiring a new customer. Essentially, it's the break-even point for sales and marketing investments. A shorter CAC payback period is ideal, as it implies better returns on investment and business scalability. Zscaler is efficient at acquiring new customers, and its CAC payback period checked in at 39 months this quarter. The company's relatively fast recovery of its customer acquisition costs gives it the option to accelerate growth by increasing its sales and marketing investments. We were impressed by Zscaler's optimistic full-year EPS guidance, which blew past analysts' expectations. We were also glad its billings, revenue, EPS, and adjusted operating income outperformed Wall Street's estimates. Overall, we think this was still a solid quarter with some key areas of upside. The stock traded up 4.7% to $262.64 immediately following the results. Zscaler put up rock-solid earnings, but one quarter doesn't necessarily make the stock a buy. Let's see if this is a good investment. The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it's free.
