ZS/ OKTA earnings

Investment Analysis Clubs Saul’s Investing Discussions
1

After listening to both calls yesterday, I felt positive about the results from both companies.

ZS 61% revenue growth vs 65% last quarter. $84 million revenue beating analysts estimates of $74.92 million.
118% dollar based retention could be higher but explanation made sense to me that they are signing up larger deals initially and upselling customers within first year.

OKTA 49.8% revenue growth vs 49.8 last quarter. $125.2 million revenue beating estimates of $116.83 million
OKTA’s 53% growth of $100k customers was particularly encouraging. 119% dollar based retention

Analyst ratings today:
ZS- 4 Buys, 1 Hold:
Piper Jaffay- Buy
Robert W Baird- Buy
Neadham- Buy
Wedbush- Buy
Merril Lynch- Hold

OKTA- 3 Holds, 2 Buys:
Piper Jaffay- Buy
Robert W Baird- Hold
DA Davidson- Hold
Morgan Stanley- Hold
Concord Genuity- Buy

At 11:36am Pacific Time Zscaler is down 7% and Okta up 7%. If someone could shed some light on the disparity in the market action, that would be appreciated.

Am still confident in both stocks and would consider buying more ZS except I just sold 4% because it had grown to 24%. My theory is the market will take a breath over the weekend and big money will take advantage of the pullback to move back into ZS Monday, pushing the stock even higher.

Thanks
JT.

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2

Here’s my take:

Q3/18 revenues: 49.2 mil.
Q4/18 revenues: 56.2 mil. [14.23% increase, Q/Q]
Q1/19 revenues: 63.2 mil. [12.46% increase, Q/Q]
Q2/19 revenues: 74.3 mil. [17.56% increase, Q/Q]
Q3/19 revenues: 79.1 mil. [6.4% increase, Q/Q]
Q4/19 projected revenues: 81 mil. [2.4% increase, Q/Q] to 83 mil. [4.5% increase, Q/Q]

Maybe people see a crack in the citadel, so took some profits.

Dan

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I’m confused, he said it was 84 million this quarter, your numbers are different?

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Dan’s number was correct. Not sure where I got mine.

“Revenue for the quarter was $79.1 million, up 6% sequentially and 61% year-over-year.”

Thank you.
JT

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Is anyone concerned about such a small increase in quarter revenue growth sequentially? I was unfortunate to get into ZS much later then most of you, I only entered about a month ago and after adding into the position I am not at break even after the 7% drop. Overall I am excited to be invested in this company after Sauls deep dive I was very impressed with the data centers they have built out across the nation.