ZS Earnings Prediction
The chart below shows how ZS performed 10 days before and after its earnings report, based on data from the past quarters. Typically, ZS sees a +0.01% change in stock price 10 days leading up to the earnings, and a -3.10% change 10 days following the report. On the earnings day itself, the stock moves by +1.07%. This data can give you a slight idea of what to expect for the next quarter's release.
ZS Key Earning Data
2024/Q4
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Total Revenue
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Gross Margin
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Operating Margin
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Net Margin
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EPS
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ZS Earnings Analysis
Zscaler Inc Corporation (ZS.O) Earnings Conference Call
Positive
Earnings Beat Expectations: Zscaler, Inc. beats earnings expectations with reported EPS of $0.78, exceeding expectations of $0.687.
Strong Revenue Growth: Revenue grew by 23% year-over-year, reaching $648 million, and billings accelerated, coming in above the high end of guidance.
ARR and NRR Growth: Annual recurring revenue (ARR) grew 23% year-over-year to over $2.7 billion, with a net retention rate (NRR) improving to 115%.
Operating Profit Improvement: Operating profit increased by 36%, resulting in a 2 percentage point improvement in operating margin to nearly 22%.
Record Free Cash Flow Margin: Free cash flow margin reached a record of 22%, indicating strong financial health and operational efficiency.
Zero Trust Adoption Growth: Zscaler's Zero Trust architecture is gaining traction, with over 130 enterprises adopting the 'Zero Trust Everywhere' model, aiming to triple this number in 18 months.
Data Protection Demand Surge: The company is seeing strong demand for its data protection solutions, with over 40% year-over-year growth in net new annual contract value (ACV).
ZDX Product Growth: Zscaler's AI-powered products, including ZDX Copilot, have seen significant growth, with bookings for ZDX Advance Plus growing by over 45% to nearly $50 million.
Strategic Partnerships Success: The company has established strong partnerships with global system integrators (GSIs), which are helping to close significant deals, including a 7-figure deal with a Global-2000 insurance customer.
Federal Vertical Positioning: Zscaler is well-positioned in the federal vertical, having landed in nearly all cabinet-level federal agencies, with significant upsell opportunities remaining.
Negative
Gross Margin Decline: Total gross margin decreased to 80.4% from 80.8% year-over-year, indicating a slight decline in profitability.
Rising Operating Expenses: Operating expenses increased by 19% year-over-year to $380 million, which could raise concerns about cost management.
Net Retention Rate Variability: The dollar-based net retention rate, while currently at 115%, may experience variability in the future due to increased success in selling larger bundles and faster upsells, which could impact long-term revenue stability.
Customer Scrutiny Impact: Despite strong revenue growth, there is ongoing customer scrutiny of large deals, which may affect future sales performance.
Product Launch Impact on Margins: The introduction of new products optimized for faster go-to-market rather than margins could continue to influence gross margins negatively in the short term.
