Zscaler Sees 21% Revenue Increase in Fiscal Q4
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Sep 02 2025
0mins
Should l Buy ZS?
Source: Fool
Strong Financial Performance: Zscaler reported Q4 FY2025 results with GAAP revenue of $719.2 million, exceeding expectations, and achieved a 22% year-over-year growth in Annual Recurring Revenue (ARR), surpassing $3 billion for the first time. Despite a GAAP net loss of $17.6 million, the company showed strong demand with a 32% increase in calculated billings and a 26.1% rise in free cash flow.
Product Innovation and Strategic Growth: The company launched new AI-powered security modules and enhanced its Zero Trust Exchange platform, focusing on customer needs and technological advancements. Strategic acquisitions, such as Red Canary, and partnerships are expected to bolster Zscaler's capabilities in cybersecurity, while management provided optimistic guidance for FY2026, anticipating continued revenue growth amidst competitive pressures.
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Analyst Views on ZS
Wall Street analysts forecast ZS stock price to rise
30 Analyst Rating
24 Buy
6 Hold
0 Sell
Strong Buy
Current: 132.970
Low
260.00
Averages
325.62
High
390.00
Current: 132.970
Low
260.00
Averages
325.62
High
390.00
About ZS
Zscaler, Inc. is a cloud security company. The Company has developed a platform incorporating core security functionalities needed to enable fast and secure access to cloud resources based on identity, context and an organization’s policies. Its Zscaler Zero Trust Exchange platform protects thousands of customers from cyberattacks and data loss by securely connecting users, devices, and applications in any location. Its solution is a purpose-built, multi-tenant, distributed cloud platform that incorporates the security functionality needed to enable users, applications, and devices to safely and efficiently utilize authorized applications and services based on an organization’s business policies. It delivers its solutions using a software-as-a-service (SaaS) business model and sells subscriptions to customers to access its cloud platform, together with related support services. It offers a security platform that combines its platform with automated security operations.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Performance Outlook: While Zscaler's ZDX achieved $100 million in annual recurring revenue with an 80% year-over-year increase, analysts noted that the slow integration of Red Canary has failed to provide the expected market momentum, impacting the overall growth narrative of the platform.
- Market Reaction: Zscaler's shares dipped about 1% in premarket trading on Tuesday and have fallen over 35% year-to-date, significantly exceeding the security sector's average decline of 24%, indicating that the market has partially priced in the analysts' cautious outlook.
- Competitive Pressure: Analysts warned that as customers evaluate broader platform vendors with deeper networking capabilities, Zscaler faces increased competitive pressure in large enterprise deals, leading to elongated sales cycles that could affect its future profitability and market share.
See More
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Morgan Stanley's Strategy: Morgan Stanley has adjusted its investment strategy by cutting its overweight position in certain assets to achieve a more equal-weighted portfolio.
Market Implications: This shift indicates a response to market conditions, aiming to balance risk and return across various investments.
See More
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See More
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