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 -0.22% 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
ZS Earnings Analysis
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.
ZS FAQs
How does ZS typically perform around its earnings report dates?
ZS's stock performance around earnings reports can vary, but historical data shows specific patterns, such as a -0.22% change leading up to the report and a -3.10% change in the 10 days following the release.
