How did Zscaler's third-quarter fiscal 2024 revenue and profitability compare with the prior year?

Revenue rose 32% year-over-year to $553.2 million. The company reported GAAP net income of $19.1 million, compared with a GAAP net loss of $46.0 million in the third quarter of fiscal 2023. Non-GAAP net income was $139.8 million, compared with $74.6 million.

What is Zscaler's outlook for fiscal 2024?

For full-year fiscal 2024, Zscaler expects revenue of approximately $2.140 billion to $2.142 billion, calculated billings of $2.603 billion to $2.606 billion, non-GAAP income from operations of $422 million to $424 million, and non-GAAP net income per share of $2.99 to $3.01 on about 161 million fully diluted shares.

What is the fourth-quarter outlook?

Zscaler expects fourth-quarter fiscal 2024 revenue of $565 million to $567 million, non-GAAP income from operations of $107 million to $109 million, and non-GAAP net income per share of approximately $0.69 to $0.70 on about 165 million fully diluted shares.

What acquisitions did Zscaler complete recently?

Zscaler acquired Avalor Technologies in March 2024 to advance AI-driven vulnerability identification, and Airgap Networks in April 2024 to extend its Zero Trust SASE offering with agentless segmentation for IoT/OT devices. Payments for business acquisitions, net of cash acquired, were $361.8 million for the nine months ended April 30, 2024.

Who is James Beer and what does his board appointment mean for Zscaler?

James Beer was appointed a Class III director effective May 25, 2024, expanding the board from seven to eight members, and was also named to the Audit Committee. The filing states he most recently served as chief financial officer of Atlassian Corporation and currently serves on the boards of Alaska Air Group and DocuSign, Inc. He will receive standard non-employee director compensation and enter the company's standard indemnification agreement.

ZS 8-K: Earnings & Results & Leadership Changes

01—Abstract

Summary

Summary of the 8-K filed May 30, 2024. Cited figures are marked; the original filing is the authoritative source.

Zscaler, Inc. (Nasdaq: ZS) reported third quarter fiscal 2024 results for the quarter ended April 30, 2024, in a press release furnished as Exhibit 99.1.

Revenue grew 32% year-over-year to $553.2 million^a, calculated billings grew 30% to $628.0 million, and deferred revenue grew 34% to $1,577.0 million. The company swung to GAAP net income of $19.1 million from a GAAP net loss of $46.0 million a year earlier, while non-GAAP net income rose to $139.8 million from $74.6 million. GAAP loss from operations narrowed to $3.0 million, and non-GAAP income from operations was $121.8 million, or 22% of revenue.

Cash provided by operations was $173.4 million^b and free cash flow was $123.1 million for the quarter. For fiscal 2024, Zscaler guided to full-year revenue of approximately $2.140 billion to $2.142 billion, calculated billings of $2.603 billion to $2.606 billion, and non-GAAP income from operations of $422 million to $424 million. For the fourth quarter, it expects revenue of $565 million to $567 million and non-GAAP net income per share of approximately $0.69 to $0.70.

The company also completed the acquisitions of Avalor Technologies in March 2024 and Airgap Networks in April 2024. Separately, the Board expanded from seven to eight members effective May 25, 2024, appointing James Beer as a Class III director and to the Audit Committee. Beer is the former chief financial officer of Atlassian Corporation, and he will receive standard non-employee director compensation and enter the company's standard indemnification agreement.

02—Key points

Key Highlights

Q3 FY2024 revenue of $553.2 million, up 32% year-over-year; calculated billings of $628.0 million, up 30%.
GAAP net income of $19.1 million versus a GAAP net loss of $46.0 million in Q3 FY2023; non-GAAP net income of $139.8 million versus $74.6 million.
Non-GAAP income from operations of $121.8 million (22% of revenue) versus $63.9 million (15%) a year earlier; GAAP loss from operations of $3.0 million.
Free cash flow of $123.1 million (22% of revenue) in Q3, up from $73.9 million (18%) a year earlier; cash, cash equivalents and short-term investments totaled $2,240.0 million as of April 30, 2024.
FY2024 guidance: revenue of approximately $2.140 billion to $2.142 billion and non-GAAP income from operations of $422 million to $424 million.
Q4 FY2024 guidance: revenue of $565 million to $567 million and non-GAAP net income per share of approximately $0.69 to $0.70.
Acquired Avalor Technologies (March 2024) and Airgap Networks (April 2024); James Beer appointed to the Board and Audit Committee, expanding the Board to eight members.

03—Questions

Frequently Asked Questions

How did Zscaler's third-quarter fiscal 2024 revenue and profitability compare with the prior year?
Revenue rose 32% year-over-year to $553.2 million. The company reported GAAP net income of $19.1 million, compared with a GAAP net loss of $46.0 million in the third quarter of fiscal 2023. Non-GAAP net income was $139.8 million, compared with $74.6 million.
What is Zscaler's outlook for fiscal 2024?
For full-year fiscal 2024, Zscaler expects revenue of approximately $2.140 billion to $2.142 billion, calculated billings of $2.603 billion to $2.606 billion, non-GAAP income from operations of $422 million to $424 million, and non-GAAP net income per share of $2.99 to $3.01 on about 161 million fully diluted shares.
What is the fourth-quarter outlook?
Zscaler expects fourth-quarter fiscal 2024 revenue of $565 million to $567 million, non-GAAP income from operations of $107 million to $109 million, and non-GAAP net income per share of approximately $0.69 to $0.70 on about 165 million fully diluted shares.
What acquisitions did Zscaler complete recently?
Zscaler acquired Avalor Technologies in March 2024 to advance AI-driven vulnerability identification, and Airgap Networks in April 2024 to extend its Zero Trust SASE offering with agentless segmentation for IoT/OT devices. Payments for business acquisitions, net of cash acquired, were $361.8 million for the nine months ended April 30, 2024.
Who is James Beer and what does his board appointment mean for Zscaler?
James Beer was appointed a Class III director effective May 25, 2024, expanding the board from seven to eight members, and was also named to the Audit Committee. The filing states he most recently served as chief financial officer of Atlassian Corporation and currently serves on the boards of Alaska Air Group and DocuSign, Inc. He will receive standard non-employee director compensation and enter the company's standard indemnification agreement.

04—Continue

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