ZS Beats

Investment Analysis Clubs Saul’s Investing Discussions
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https://ir.zscaler.com/static-files/aee03fb5-0967-414c-9018-…

First Quarter Fiscal 2019 Financial Highlights

• Revenue: $63.3 million, an increase of 59% year-over-year.

• Income (loss) from operations: GAAP loss from operations was $8.7 million, or 14% of total revenue, compared to $11.3 million in the first quarter of fiscal 2018, or 28% of total revenue. Non-GAAP income from operations was $1.2
million, or 2% of total revenue, compared to loss from operations of $7.4 million in the first quarter of fiscal 2018,or 19% of total revenue.

• Net Income (Loss): GAAP net loss was $7.6 million, compared to $11.4 million in the first quarter of fiscal 2018. Non-GAAP net income was $2.0 million, compared to net loss of $7.5 million in the first quarter of fiscal 2018.

• Net Income (Loss) Per Share: GAAP net loss per share was $0.06, compared to $0.45 in the first quarter of fiscal 2018. Pro forma non-GAAP net income per share was $0.01, compared to net loss per share of $0.07 in the first
quarter of fiscal 2018.

• Cash Flow: Cash provided by operations was $11.0 million, or 17% of revenue, compared to cash used in operations of $4.4 million, or 11% of revenue, in the first quarter of fiscal 2018. Positive free cash flow was $5.2 million,
or 8% of revenue, compared to negative free cash flow of $8.9 million, or 22% of revenue, in the first quarter of fiscal 2018.

• Deferred Revenue: $165.3 million at October 31, 2018, an increase of 68% year-over-year.

Recent Business Highlights

• On November 26, 2018, Zscaler was named a leader in Gartner Secure Web Gateways Magic Quadrant for the 8th
year in a row.

• Zscaler released inline Exact Data Match (EDM) with native SSL inspection as part of its Cloud Data Loss Prevention
(DLP) service providing more precision while reducing the number of false positives. While traditional DLP-EDM solutions were designed for the “castle-and-moat” security model in a few data centers, Zscaler’s DLP-EDM service
can scale to meet the needs of large enterprises with the capacity of one billion data points per customer across 100 data centers globally to protect all users, irrespective of the location.

• Zenith Live Europe, Zscaler’s inaugural European Cloud Summit, took place in London with key industry leaders from global organizations such as Microsoft, Orange Business Services, Boehringer Ingelheim, Carlsberg Group and Thyssenkrupp sharing insights and best practices for secure cloud transformation.

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Hi freecapital,

Looks like you pasted last quarters info. Revenue grow for the current quarter was 65%! :slight_smile:

https://seekingalpha.com/pr/17429284-zscaler-reports-second-…

Here is the link for Q2.

Best,
Matt

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Anyone have any luck listening to the CC webcast? Just plays music for me. Missed the live.

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Great results… continued momentum… market reacted very well considering this has been one of the “most expensive” stock in our universe.

Personally for me, took out the sting NTNX inflicted this morning.

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It was outstanding. I added more, even at these levels. Used the projected market opportunity over next 2-3 years to help me get over the current price. I do trade in/out quite a bit, but along with TWLO, TTD, and AYX, I feel good about those as 2-3 years or more holds, and hopefully longer in some cases.

I should have been in ZS a lot earlier, as I was looking at it pre-IPO and I had $21 penciled in as a fair entry price, which it never sank that low. This goes to Saul’s point he often makes in why worry about getting in at $21 vs $25 if you feel like it has potential to go to $75 or $100 in 2-3 years?

About a year ago I wrote that (4) stocks to rule them all was: TTD, MDB, AYX, and ZS. Had I just bought and held since, that would have been outrageous gains. I still did good, but need to get out of my own way from time to time.

ZS can easily dip from here, but I can envision them doing $1b in revenues in the next couple of years fairly easily…so even if P/S was cut in half at that point to 14 or 15, the stock would still be a double. That is my penciled in expectations at least.

Dreamer

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There are few companies that can maintain a high growth rate, above 50%, by continuing to reinvest the revenue back into the business to grow.

AYX, MDB, ESTC, etc.

There are fewer companies that can maintain a high growth rate (50%+) and still improve profitability.

*Their business is strong enough they can let some of the growing revenue go down to the bottom line

  • They don’t have to invest all of it to maintain the growth.

I would say TTD, OKTA, and SQ are in this category.

Then there are the few amazing companies that can maintain the growth above 50%, accelerate the growth rate, and improve profitability. The trifecta.

Here we have TWLO and ZS.

That was a great quarter for ZS, the amount of profitability improvement to go alone with the revenue acceleration, wow.

Jim

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Jim, I like how you divide the companies up. AYX should be in the group with TWLO and ZS. THey are cash flow positive and improving, profitable and improving,. OKTA might be there too. Lets see on this new quarter.

-e

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