ZS Quarterly Earnings

ZScaler Third Quarter Highlights
• Revenue grows 60% year-over-year to $176.4 million
• Calculated billings grows 71% year-over-year to $225.0 million
• Deferred revenue grows 65% year-over-year to $495.4 million
• GAAP net loss of $58.5 million compared to GAAP net loss of $19.3 million on a year-over-year basis
• Non-GAAP net income of $21.4 million compared to non-GAAP net income of $10.3 million on a year-over-year basis


  • Our results exceeded our expectations, and we are again increasing our guidance for fiscal 21. Our business is firing on all cylinders: our superior architecture and optimized go-to-market engine is elevating us above the competitive noise.
  • 126% dollar-based net retention rate in the quarter
  • we closed a record number of seven-figure ACV deals across a broad range of industries. Most of these wins are 3-year commitments to provide our customers the foundation for application, network and security transformation.
  • As we look forward to a post-pandemic world, in which employees unwittingly bring infected laptops back to the office… (!!)
  • Non-GAAP Gross Margin is 81%, consistent with previous quarters

In summary, we are making tremendous progress across all three areas – sales organization, marketing and
channel partners – and delivering strong results quarter after quarter. I believe we are on track to capture a material share of our $72 billion serviceable market.

Stock up 8% after hours.

-apt21 (long ZS)


Great quarter!

Growth rate back to 60%, and calculated billing up to 71%.
Besides these numbers, I’ll look Deferred numbers more. That’s 65% yoy.
And big FCF positive. I couldn’t argue anything about their valuation because they truly doing so good. But I’m only hold ZS around 9% now(added 1% AH)just because I was bitten at 2019 XD and couldn’t forgot. That’s why ZS still on my second tier portfolio.
Growth rate ONLY 50%’s NET(13%)at my first tier and so do DDOG(20%)

Will expect next Q reach 200M and still keeping 60% growther.



Yes, this was one of their best ever quarters from a growth perspective. A reaccelerating growth rate, growing portfolio, high DBNER, masses of cash, and significant Non-GAAP FCF.

We only get 2 see customer counts next quarter, but everything seems on track and accelerating.

They called out their partnership with CrowdStrike several times during the call, basically saying the CRWD is tops with endpoint security and they’re tops with network.

They also mention CRWD became a customer of ZS in the quarter, which must be a pretty good endorsement of the technology.

Some of the anecdotes of upsells talk about doubling of ARR which is impressive.

Interestingly, during NETs talk at the JP Morgan Tech conference (https://seekingalpha.com/article/4431221-cloudflares-net-ceo…), Matthew Prince mentioned security a bunch of times, really positioning NET as a zero-trust security company, which as far as I knew, it really isn’t.

So security is hot, everyone wants to jump on the bandwagon, and ZS is performing particularly well.



Agreed - totally outstanding results on every metric: revenue, margin, net inc, cash flow, billings, deferred revenues, DBNER, new products and guidance and the Q&A was exceptionally positive and assuring.

If I had had fresh capital I would have been loading up going into these results for sure. If the SP doesn’t react so much today I think it would be worth a top up if I had capital.

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Great results…

just something to keep in mind - last year, their growth had fallen off from 60%s and 50%s in 2018 to 40%s and lower in 2019… so for last three quarters, their comp has been easier… and there was a good covid related acceleration due to work from home… alll in n all they delivered very strong accelerating growth over last three quarters… however, this quarter 60% y/y growth may become near term maxima…
still growth in 50%s is fair to expect for next few quarters.


Yes,I do remember.
That’s why I only have 9% ZS in my position.
But look at their ER transcript you will understand their customers are all big solid guys. Their upsell seems very easy and they do recruit lots of best sales teams in their company. But they still got very very healthy bottom line.

According to their CRPO and RPO growth rate, I see rarely chance their growth rate will drop to 40’s in foreseeable future.

Next Q I believe 200M not a unreachable number and which means 60% yoy.

My 2 cents


Their guidance with a similar 7.3% beat as this quarter puts them right around 60% YoY next quarter as well. Its interesting to note that this quarter’s QoQ annualizes to 58% YoY. With a similar beat, next q’s will be 67%. Continuing to accelerate.

No position but watching.