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Zscaler 8-K Report, Financial Results (Feb 29, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed February 29, 2024
Period End
February 29, 2024
Security
ZS
In the record · 2018–202610-K910-Q258-K62

ZS filed 9 annual reports (10-K), 25 quarterly reports (10-Q) and 62 current reports (8-K) between 2018 and 2026.

  1. Leadership change8-K · Sep ’20Sep ’20
  2. Restructuring8-K · Mar ’23Mar ’23
  3. Leadership change8-K · Sep ’26Sep ’26

01—Abstract

Summary

Summary of the 8-K filed February 29, 2024. Cited figures are marked; the original filing is the authoritative source.

Zscaler, Inc. (ZS) reported financial results for its second fiscal quarter 2024, ended January 31, 2024, in a press release furnished as Exhibit 99.1 to this Form 8-K dated February 29, 2024.

Revenue grew 35% year-over-year to $525.0 milliona, and calculated billings grew 27% year-over-year to $627.6 million. Deferred revenue rose 35% year-over-year to $1,502.2 million. GAAP loss from operations was $45.5 million (9% of revenue), compared with $65.2 million (17% of revenue) a year earlier, while non-GAAP income from operations was $103.2 million (20% of revenue), up from $48.8 million (13% of revenue).

GAAP net loss narrowed to $28.5 millionb from $57.5 million, and non-GAAP net income rose to $121.1 million from $57.6 million. Cash provided by operations was $142.1 million and free cash flow was $100.8 million for the quarter, compared with $89.5 million and $62.8 million in the prior-year quarter. Cash, cash equivalents and short-term investments totaled $2,459.8 million at January 31, 2024, up $359.6 million from July 31, 2023.

Management described customer interest in the Zscaler Zero Trust Exchange platform as high and said billings, revenue and operating profit all exceeded guidance. For fiscal 2024, the company guided to revenue of approximately $2.118 billion to $2.122 billionc, calculated billings of $2.55 billion to $2.57 billion, non-GAAP income from operations of $395 million to $400 million, and non-GAAP net income per share of $2.73 to $2.77 on about 161 million fully diluted shares.

For the third quarter, it guided to revenue of $534 million to $536 milliond and non-GAAP net income per share of approximately $0.64 to $0.65. The filing also notes a change in server and networking equipment useful lives from four to five years, which the company states had an approximately 60 basis point benefit to gross margin for the quarter and six months.

02—Key points

Key Highlights

  1. Revenue of $525.0 million, up 35% year-over-year from $387.6 million in the prior-year quarter.
  2. Calculated billings of $627.6 million, up 27% year-over-year; deferred revenue of $1,502.2 million, up 35% year-over-year.
  3. GAAP net loss of $28.5 million ($0.19 per share), improved from a $57.5 million loss ($0.40 per share) a year earlier.
  4. Non-GAAP net income of $121.1 million ($0.76 per share), versus $57.6 million ($0.37 per share) in the prior-year quarter.
  5. Free cash flow of $100.8 million (19% of revenue), compared with $62.8 million (16% of revenue) a year earlier.
  6. Cash, cash equivalents and short-term investments of $2,459.8 million at January 31, 2024, up $359.6 million from July 31, 2023.
  7. Fiscal 2024 guidance: revenue of approximately $2.118 billion to $2.122 billion and non-GAAP net income per share of $2.73 to $2.77; Q3 revenue guided to $534 million to $536 million.

03—Questions

Frequently Asked Questions

  1. How did Zscaler perform in the second quarter of fiscal 2024?

    Revenue rose 35% year-over-year to $525.0 million, calculated billings rose 27% to $627.6 million, and the GAAP net loss narrowed to $28.5 million from $57.5 million. Non-GAAP net income was $121.1 million, up from $57.6 million.

  2. What is the company's full-year fiscal 2024 outlook?

    Zscaler expects revenue of approximately $2.118 billion to $2.122 billion, calculated billings of $2.55 billion to $2.57 billion, non-GAAP income from operations of $395 million to $400 million, and non-GAAP net income per share of $2.73 to $2.77 on approximately 161 million fully diluted shares.

  3. What guidance did Zscaler give for the third quarter of fiscal 2024?

    The company expects third-quarter revenue of $534 million to $536 million, non-GAAP income from operations of $98 million to $100 million, and non-GAAP net income per share of approximately $0.64 to $0.65.

  4. How much cash does Zscaler have and how did cash flow trend?

    Cash, cash equivalents and short-term investments were $2,459.8 million at January 31, 2024, up $359.6 million from July 31, 2023. Quarterly cash from operations was $142.1 million and free cash flow was $100.8 million.

  5. Did the company change any accounting estimates that affect margins?

    Yes. In August 2023 the company extended the useful lives of its servers and networking equipment from four to five years, effective fiscal 2024. The filing states this had an approximate 60 basis point benefit to gross margin for the three and six months ended January 31, 2024.

04—Continue

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