Please be advised that today’s conference is being recorded. The chart below shows up to four years of a company’s earnings history. The dark blue line represents the company’s actual earnings per share. The light blue area represents the range of Wall Street analysts’ earnings estimates for each quarter. “Businesses are digitally transforming at a pace never seen before, and this is fueling adoption of the Zscaler Zero Trust Exchange platform and our strong fourth quarter and fiscal year results,” said CEO Jay Chaudhry. He also raised his price target to $439 from $401, suggesting 37% upside.
You will find the reconciliation of GAAP to the non-GAAP financial measures in our earnings release. For historical periods, the GAAP to the non-GAAP reconciliations can be found in the supplemental financial information. Starting in fiscal ’21, we will be excluding stock-based compensation-related payroll taxes from our non-GAAP results. Guidance for non-GAAP net income per share includes the anti-dilutive impact of the capped call transactions entered into in connection with our convertible senior notes issued in June 2020. We have not reconciled our expectations to non-GAAP income from operations and non-GAAP net income per share to their most directly comparable GAAP measures because certain items are out of our control or cannot be reasonably predicted.
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- Its revenue for the quarter was up 62.7% on a year-over-year basis.
- Zscaler, Inc. shares rose more than 25% during Thursday’s session after the cloud software company reported better-than-expected fiscal first quarter financial results.
- We define free cash flow as net cash provided by operating activities less purchases of property, equipment and other and capitalized internal-use software.
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- Zscaler shares rose more than 25% during Thursday’s session after the company reported better-than-expected fiscal first quarter financial results.
In August 2015, the company announced the closing of a new round of financing, led by TPG, of $100 million. In March 2018, the company had an initial public offering in which it raised $192 million. The company is traded on the Nasdaq using the symbol ZS. Zscaler stock was added to the Nasdaq 100 on December 17, 2021. Kailash and announced the general availability of its cloud security service in August 2008. It was named one of 10 startups to watch in 2009 by Network World.
Zscaler Stock Sells Off After Earnings, Experts See 20% Upside
We come from the fact that, in this new world, there is no such thing as traditional security. Second part of your question is application protection in public cloud. We are seeing lots and lots of dynamic workflows being launched in public cloud. That’s why when people say, gee, after COVID, are things going to slow down, I say no, we are seeing actually acceleration in our business not because of a one-time event but because of accelerating trend.
It seems as though last quarter, there was a lot of — I don’t want to call it panic buying but a lot of enterprise purchases that maybe they didn’t have enough time to assess a new enterprise architecture. The question came up last call was more of your existing customers are buying basically, and that’s ZPA driven by COVID. I mean, ZPA was at 43% of our business total new and upsell business in Q3. And you mentioned that only 35% of your installed base was purchased. When you think about the guidance you gave for ’21, how are you thinking about the growth of ZPA within that context? And really, what I’m asking is any color you could give us on the distribution.
As of August, 2020 the company has a market capitalization of over US$16 billion. Compressed logs are transmitted to our Nanolog Servers over secure connections and multicast to multiple servers for redundancy. Our dashboards provide visibility into our customer’s traffic to enable troubleshooting, policy changes and other administrative actions.
We feel we’ve got, if not the world’s best sales machine, one of the world’s best sales machines with the leadership that we have in our sales organizations and the investments that we made in that in fiscal ’20 and we’ll continue to make into fiscal ’21. Having said that, basically, the foundation is in place. That foundation in the go-to-market was built in fiscal ’20. The sales productivity, as I mentioned, that we exceeded our sales productivity, being above the prior year where we thought would be below, it just speaks to what we put in place. One of the key things, I mean, when you think about Zscaler if you think about a company that built the platform for today and the future, we’re talking about a market that basically we knew was there but wasn’t coming to us as fast as we thought it would.
As of Q2 2022, ZSCALER’s revenue has grown 60.36% year over year. This is 36.51 percentage points higher than the US Software – Infrastructure industry revenue growth rate of 23.85%. ZSCALER’s revenue in the past year totalled $859.56 million. A bit more ebay problems today 2022 skeptical is Piper Sandler’s Rob Owens, who raised the price target to $365 from $285 for a modest projected climb of 5%. Owens see Zscaler executing well on key growth initiatives, which led to “the most significant revenue beat in nearly three years”.
Given our accelerated investments this year, we would like to provide an update to our long-term financial model. We expect to achieve 20% to 22% operating margin for the full year and fiscal ’24. We ended the quarter with over $1.3 billion in cash, cash equivalents, and short-term investments including net cash of approximately $1 billion raise for the June offering of convertible senior notes due in 2025. Free cash flow was positive $11 million in the quarter.
Number two, this part doesn’t really have much to do with zero trust. Just one technical question and then one on the technology side. Can you talk about whether you expect to continue to expand your sales capacity at a pace faster than sales in your ’21 guidance? And then second piece on the technology front, I’m really fascinated by your commentary around the modern application protection domain-to-domain, app-to-app environments. Can you talk a little bit about how you penetrate into the Kubernetes orchestration environments tie into Jenkins and CI/CD processing?
Zscaler’s fourth quarter revenue grew 53% to $86.1 million. GAAP net loss was $5.3 million or $0.04 per share, compared to $7 million or $0.06 per share a year ago. Non-GAAP net income per share was $0.07, compared to net loss per share of $0.01 a year ago. Analysts expected earnings of $0.01 per share on revenue of $82.8 million.
We would expect a similar distribution in fiscal 2021. Operating profit in the range of $44 million to $46 million; other income of $2 million; income taxes of $5 million; and earnings per share in the range of $0.28 to $0.30, assuming approximately 145 million common shares outstanding. Our guidance reflects the increased investments in our business, driven by two major developments.
So there’s a pretty high demand for ZDX and we just got the product out last quarter and we’re seeing a good pipeline, lots of interest, and we are evolving the product pretty rapidly. B2B is actually a little bit interesting angle, big sizable opportunity but different kind of products, a little bit different buyer. It’s the chief digital officer who is building new B2B applications. We can get there no matter how this market goes or with the product platform that we have that we started out with the ZIA, then we expanded to ZPA and you take a look at the growth in ZPA that we’ve had, it’s been pretty significant. Now, you’re adding the ZDX, the user experience, which we think is a significant market, as I mentioned.
You’re putting on board the workload segmentation and then you have the ability to bringing other products like CASB out-of-band, the Browser Isolation, B2B, CSBM. Thank you very much, gentlemen, and congrats on the great quarter. I just want to ask more of a competition-related question. Cisco acquired a company called ThousandEyes recently and which I believe is a technology aimed at providing more network visibility similar to ZDX.
The Zscaler Private Access, or ZPA cloud service, replaces virtual private networks, or VPNs, to support remote work. For fiscal 2022, which starts with the July-to-October quarter, Zscaler expects revenue of $945 million. The company says it expects earnings in a range of 52 to 56 cents a share amid higher investments in its salesforce, in line with estimates of 54 cents. For the full fiscal year, Zscaler said it sees 54 cents to 56 cents in adjusted earnings per share and revenue of $1.045 billion to $1.05 billion, which works out to almost 56% revenue growth at the middle of the range. That compares with Refinitiv consensus of 52 cents in adjusted earnings per share and $1.01 billion in revenue. Zscaler, Inc. shares rose more than 25% during Thursday’s session after the cloud software company reported better-than-expected fiscal first quarter financial results.
Amid Russia Attack, Cybersecurity Stocks Gain
Do you think about it that way and as well how should we think about the slope of that margin expansion over time on the way to the 20% to 22%? And since this new economy, you can’t be sitting on the network in your branch offices or wherever you end up working from anywhere and wherever, so you must be secure. So security becomes an important enabler of this transformation journey. In fact, I would say that security comes first before any of the network transformation or SD-WAN comes in because, without proper cloud-centric security, it can’t be done.
Other Statistics On The Topiccloud Security
We through internal innovation and highly targeted acquisitions, we have significantly increased the number of products available on our platform, further expanding our already substantial technology lead. Second, our ZPA solution which doubles our market opportunity has become the most mature zero trust solution with deep and wide functionality, including support for web and non-web applications. We ended fiscal ’20 with over 4,500 customers, including over 150 of the Fortune 500 and over 450 of the Global 2000 companies. We have over 100 customers that generate over $1 million in ARR, or annual recurring revenue. While the average NPS or net promoter score of an average hash company is 30, Zscaler’s NPS is 76, which is 2.5 times higher, a proof of the value that Zscaler delivers. These forward-looking statements apply as of today and you should not rely on them as representing our views in the future.
As we demonstrated in recent quarters, we are delivering world-class sales execution and we believe we are positioned for long-term growth. We thank you for your interest in Zscaler and look forward to reporting our progress in the future. With the mindset change and openness to transformation, I have seen an increase in CIO-level awareness and engagement with us.
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This is also considered the «top-line» of the income statement. Revenues are used for all operating expenses as well as other line items which eventually lead to the net income for the company. Revenue is an extremely important metric when analyzing a company. A company with efficient margins is able to turn revenues into the most net income. SectorIndustryMarket CapRevenue Computer and TechnologyInternet Services$29.378B$0.673B Zscaler Inc. operates as a cloud security company.
Its flagship services, Zscaler Internet Access™ and Zscaler Private Access™, create fast, secure connections between users and applications, regardless of device, location, or network. Zscaler services are 100 percent cloud-delivered and offer the simplicity, enhanced security and improved user experience that traditional appliances are unable to match. Used in more than 185 countries, Zscaler operates a multi-tenant distributed cloud security platform, protecting thousands of customers from cyberattacks and data loss.
This is a far superior approach for app segmentation without having to do network-based segmentation. What sets us apart from the many vendors who claim to have a platform is the following. But just like you can’t create Netflix by stacking thousands of DVD players in the cloud, you can’t offer an in-line, high-performance security cloud by spinning up bunch of virtual firewalls in a public cloud. To put it simply, having the right cloud-native architecture creates a significant barrier to entry cloud imitators. Building a cloud-native architecture with full security and minimal latency was a daunting challenge and running a massive in-line distributed cloud with five nines of availability is, in order of magnitude, more difficult. For large enterprises, who want network and security modernization, we believe we are the only cloud-native multi-tenant platform that meets their needs.