Zscaler Reports Above-Expectations Annual Revenue

Zscaler forecasts annual revenue above estimates. The company specializes in cloud-based security software, particularly its Zero Trust Exchange platform for securing internet networks and protecting IT infrastructures. Geographically, net sales are distributed mainly in the United States (50.4%), Europe-Middle East-Africa (31%), Asia-Pacific (15.1%), and other (3.5%).

Zscaler, Inc. (NASDAQ:ZS), a leading provider of cloud-based security solutions, has recently forecasted annual revenue above estimates for the fiscal year 2025. The company's Zero Trust Exchange platform, designed to secure internet networks and protect IT infrastructures, is a significant driver of this growth. Zscaler's strategic initiatives and market position have contributed to its robust financial performance and positive outlook.

In the most recent quarter, Zscaler reported non-GAAP earnings per share (EPS) of $0.84 on revenue of $678.0 million, representing a 23% year-over-year growth [1]. The company's billings, a key metric for software-as-a-service (SaaS) companies, grew by 25% year-over-year, signaling strong demand for its offerings. Zscaler's financial outlook for the fiscal year 2025 projects revenue between $2.659 billion and $2.661 billion, representing a 23% year-over-year growth [1].

Geographically, Zscaler's net sales are distributed mainly in the United States (50.4%), Europe-Middle East-Africa (31%), Asia-Pacific (15.1%), and other (3.5%) [1]. The company's Zero Trust Everywhere initiative aims to accelerate platform adoption and replace legacy security solutions. This initiative has already shown promising results, with over 130 enterprise customers identified as Zero Trust Everywhere accounts in a recent quarter [1].

Zscaler's acquisition of Red Canary, a managed detection and response (MDR) provider, for approximately $675 million, is expected to enhance its AI-powered security operations center (SOC) capabilities and bring valuable synergies to its existing offerings [1]. The integration of Red Canary’s technology is anticipated to contribute significantly to Zscaler’s annual recurring revenue (ARR), with conservative estimates suggesting an addition of $70 million in ARR [1].

The company's market position appears solid, with an overall Financial Health Score of "GOOD" from InvestingPro and a strong analyst consensus recommendation of 1.75 (where 1 is Strong Buy) [1]. Zscaler's focus on innovation and continuous product development has allowed it to maintain its technological leadership despite new market entrants.

Analysts project continued strong growth for Zscaler, with the company aiming to reach $5 billion in ARR by fiscal year 2027, driven by the expansion of its core products and the rapid growth of emerging solutions [1]. The shift to ARR as the primary guiding metric in fiscal year 2026 underscores Zscaler’s maturity as a SaaS company and its focus on building a sustainable, recurring revenue base.

References:
[1] https://www.investing.com/news/swot-analysis/zscalers-swot-analysis-cloud-security-leaders-stock-poised-for-growth-93CH-4218293