Zscaler (ZS) 3 Sep 24 2024 Q4 Earnings call transcript
1min read Zscaler, a leading cybersecurity company, recently held its fourth quarter earnings call for fiscal year 2024, revealing a strong financial performance and a robust outlook for the future. The call, led by executives Jay Chaudhry, Ashwin Kesireddy, and Remo Canessa, provided insights into the company's strategic initiatives, market position, and financial health.
Strong Financial Performance and Growth
Zscaler reported a 30% year-over-year revenue growth in Q4, reaching $593 million, and exceeding the high end of its guidance. The company's billings grew 27% year-over-year and 45% sequentially to $911 million, reflecting the strong demand for its zero-trust security solutions. For the full year, Zscaler's revenue grew 34%, marking the fourth consecutive year of exceeding the "rule of 60" for revenue and free cash flow growth.
Strategic Initiatives and Market Position
Zscaler's strategic initiatives, including the expansion of its platform beyond user security to cover applications, workloads, and IoT/OT devices, have shown impressive results. The company's emerging products, such as ZPA and ZDX, contributed 22% of new and upsell business in fiscal 2024, and are expected to grow further in fiscal 2025. Zscaler's zero-trust platform, securing 47 million users across nearly 8,700 customers, is a significant differentiator in the market.
Investments and Future Outlook
Zscaler's investments in its cloud platform and AI analytics have yielded positive results, with a massive data lake generated from over 0.5 trillion daily transactions. The company's AI analytics solution, including ZIA transformation and data protection advanced, contributed 3 points to new and upsell business growth in Q4 and 2 points for the entire fiscal year, despite being only available for a part of the year. Looking ahead, Zscaler expects to achieve a new milestone of $3 billion or more in ARR in fiscal 2025, signaling strong growth prospects.
Challenges and Competition
Despite the strong performance, Zscaler acknowledged challenges, including the ongoing go-to-market transition and the need to maintain a competitive edge in the rapidly evolving cybersecurity landscape. The company's go-to-market strategy, including the hiring of experienced leaders for global system integrators and the expansion of its platform, is expected to address these challenges and drive growth in fiscal 2025.
In conclusion, Zscaler's fourth quarter earnings call highlighted a company in a strong financial position, with a robust product portfolio and a clear vision for the future. The company's strategic initiatives, market position, and financial health position it well for continued growth and innovation in the cybersecurity sector. With a focus on zero-trust security and AI analytics, Zscaler is well-positioned to capitalize on the opportunities in the evolving cybersecurity landscape.