We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Zscaler (ZS) Q2 Earnings and Revenues Surpass Estimates
Read MoreHide Full Article
Zscaler (ZS - Free Report) reported better-than-expected second-quarter fiscal 2024 results. The company posted second-quarter fiscal 2024 non-GAAP earnings of 76 cents per share, which beat the Zacks Consensus Estimate of 58 cents. It reported non-GAAP earnings of 37 cents in the year-ago quarter.
Zscaler’s second-quarter fiscal 2024 revenues were $525 million, which surpassed the Zacks Consensus Estimate by 3.42% and increased 35% year over year.
Top-Line Details
During the second quarter, Zscaler’s calculated billings increased 27% year over year to $627.6 million.
Region-wise, the Americas accounted for 54% of revenues, while the EMEA contributed 31%. The Asia Pacific and Japan made up the remaining 15%.
In the fiscal second quarter, ZS added multiple large customers across all its offerings, including ZIA, ZPA and ZDX. Its net dollar-based retention rate was 117% in the reported quarter, driven by strong upsells.
Remaining Performance Obligations (RPO), representing Zscaler’s committed non-cancelable future revenues, were $3.61 billion as of Jan 31, which increased 29% year over year. The current RPO is approximately 51% of the total RPO.
At the end of the quarter, the company had 497 customers with $1 million or higher annualized recurring revenues (ARR). The company added 29 customers during the quarter with $1 million or more in ARR. The company’s customer count for ARR of more than $100,000 reached 2,820 at the end of the second quarter.
Operating Details
The non-GAAP gross profit increased 36% year over year to $424 million. The non-GAAP gross margin expanded 100 basis points (bps) on a year-over-year basis to 81%.
Total non-GAAP operating expenses, accounting for 61% of revenues, increased 22% year over year to $321 million. Sales & marketing, research & development, and general & administrative expenses jumped 17.2%, 42.5% and 25.4%, respectively, on a year-over-year basis.
The non-GAAP operating income was $103.2 million compared with the year-ago quarter’s $48.8 million. The non-GAAP operating margin expanded 700 bps year over year to 20%.
Balance Sheet & Cash Flow
As of Jan 31, 2024, Zscaler had $2.46 billion in cash, cash equivalents and short-term investments compared with $2.32 billion as of Oct 31, 2023.
The company generated operating and free cash flows of $142 million and $100.8 million, respectively, during the second quarter. Zscaler generated operating and free cash flows of $89.5 million and $62.8 million, respectively, in the year-ago quarter.
Guidance
Zscaler revised its outlook for fiscal 2024. The company forecasts revenues in the range of $2.118-$2.122 billion, up from the previous guidance of $2.09-$2.10 billion. The Zacks Consensus Estimate for fiscal 2024 revenues is pegged at $2.1 billion, suggesting growth of 30% from fiscal 2023.
Calculated billings are now expected in the range of $2.55-$2.57 billion, up from the earlier guidance of $2.52-$2.56 billion.
The non-GAAP operating income is now estimated in the band of $395-$400 million compared with the previous guidance of $360-$365 million.
Non-GAAP earnings per share for fiscal 2024 are expected in the band of $2.73-$2.77 compared with the previous guidance of $2.45-$2.48. The consensus mark for fiscal 2024 earnings is pegged at $2.47 per share, unchanged over the past 60 days and is at the mid-point of the management’s guidance range.
For the third quarter of fiscal 2024, Zscaler projects revenues between $534 million and $536 million. The Zacks Consensus Estimate for second-quarter fiscal 2024 revenues is pegged at $507.6 million, suggesting growth of 31% year over year.
The gross margin is expected to be 80%. The non-GAAP income from operations is estimated in the band of $98-$100 million. Non-GAAP earnings per share are projected between 64 cents and 65 cents. The Zacks Consensus Estimate is pegged at 58 cents, which has remained unchanged over the past 60 days.
Zacks Rank and Other Stocks to Consider
Currently, ZS carries a Zacks Rank #2 (Buy). ZS shares have rallied 70% in the past year.
The Zacks Consensus Estimate for BlackLine’s first-quarter 2024 earnings has remained unchanged at 47 cents per share for the past 90 days. Shares of BL have lost 17.4% in the past year.
The Zacks Consensus Estimate for Arista’s first-quarter 2024 earnings has been revised by 2 cents northward to $1.71 per share in the past seven days. Shares of ANET have rallied 107.4% in the past year.
The Zacks Consensus Estimate for DELL’s fourth-quarter 2024 earnings per share has been revised northward by a penny to $1.73 in the past 30 days. Shares of DELL have surged 196.3% in the past year.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Zscaler (ZS) Q2 Earnings and Revenues Surpass Estimates
Zscaler (ZS - Free Report) reported better-than-expected second-quarter fiscal 2024 results. The company posted second-quarter fiscal 2024 non-GAAP earnings of 76 cents per share, which beat the Zacks Consensus Estimate of 58 cents. It reported non-GAAP earnings of 37 cents in the year-ago quarter.
Zscaler’s second-quarter fiscal 2024 revenues were $525 million, which surpassed the Zacks Consensus Estimate by 3.42% and increased 35% year over year.
Top-Line Details
During the second quarter, Zscaler’s calculated billings increased 27% year over year to $627.6 million.
Region-wise, the Americas accounted for 54% of revenues, while the EMEA contributed 31%. The Asia Pacific and Japan made up the remaining 15%.
Zscaler, Inc. Price, Consensus and EPS Surprise
Zscaler, Inc. price-consensus-eps-surprise-chart | Zscaler, Inc. Quote
In the fiscal second quarter, ZS added multiple large customers across all its offerings, including ZIA, ZPA and ZDX. Its net dollar-based retention rate was 117% in the reported quarter, driven by strong upsells.
Remaining Performance Obligations (RPO), representing Zscaler’s committed non-cancelable future revenues, were $3.61 billion as of Jan 31, which increased 29% year over year. The current RPO is approximately 51% of the total RPO.
At the end of the quarter, the company had 497 customers with $1 million or higher annualized recurring revenues (ARR). The company added 29 customers during the quarter with $1 million or more in ARR. The company’s customer count for ARR of more than $100,000 reached 2,820 at the end of the second quarter.
Operating Details
The non-GAAP gross profit increased 36% year over year to $424 million. The non-GAAP gross margin expanded 100 basis points (bps) on a year-over-year basis to 81%.
Total non-GAAP operating expenses, accounting for 61% of revenues, increased 22% year over year to $321 million. Sales & marketing, research & development, and general & administrative expenses jumped 17.2%, 42.5% and 25.4%, respectively, on a year-over-year basis.
The non-GAAP operating income was $103.2 million compared with the year-ago quarter’s $48.8 million. The non-GAAP operating margin expanded 700 bps year over year to 20%.
Balance Sheet & Cash Flow
As of Jan 31, 2024, Zscaler had $2.46 billion in cash, cash equivalents and short-term investments compared with $2.32 billion as of Oct 31, 2023.
The company generated operating and free cash flows of $142 million and $100.8 million, respectively, during the second quarter. Zscaler generated operating and free cash flows of $89.5 million and $62.8 million, respectively, in the year-ago quarter.
Guidance
Zscaler revised its outlook for fiscal 2024. The company forecasts revenues in the range of $2.118-$2.122 billion, up from the previous guidance of $2.09-$2.10 billion. The Zacks Consensus Estimate for fiscal 2024 revenues is pegged at $2.1 billion, suggesting growth of 30% from fiscal 2023.
Calculated billings are now expected in the range of $2.55-$2.57 billion, up from the earlier guidance of $2.52-$2.56 billion.
The non-GAAP operating income is now estimated in the band of $395-$400 million compared with the previous guidance of $360-$365 million.
Non-GAAP earnings per share for fiscal 2024 are expected in the band of $2.73-$2.77 compared with the previous guidance of $2.45-$2.48. The consensus mark for fiscal 2024 earnings is pegged at $2.47 per share, unchanged over the past 60 days and is at the mid-point of the management’s guidance range.
For the third quarter of fiscal 2024, Zscaler projects revenues between $534 million and $536 million. The Zacks Consensus Estimate for second-quarter fiscal 2024 revenues is pegged at $507.6 million, suggesting growth of 31% year over year.
The gross margin is expected to be 80%. The non-GAAP income from operations is estimated in the band of $98-$100 million. Non-GAAP earnings per share are projected between 64 cents and 65 cents. The Zacks Consensus Estimate is pegged at 58 cents, which has remained unchanged over the past 60 days.
Zacks Rank and Other Stocks to Consider
Currently, ZS carries a Zacks Rank #2 (Buy). ZS shares have rallied 70% in the past year.
Some other top-ranked stocks from the broader technology sector are BlackLine (BL - Free Report) , Arista Networks (ANET - Free Report) and Dell Technologies (DELL - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for BlackLine’s first-quarter 2024 earnings has remained unchanged at 47 cents per share for the past 90 days. Shares of BL have lost 17.4% in the past year.
The Zacks Consensus Estimate for Arista’s first-quarter 2024 earnings has been revised by 2 cents northward to $1.71 per share in the past seven days. Shares of ANET have rallied 107.4% in the past year.
The Zacks Consensus Estimate for DELL’s fourth-quarter 2024 earnings per share has been revised northward by a penny to $1.73 in the past 30 days. Shares of DELL have surged 196.3% in the past year.