“I am pleased to announce that our preliminary third quarter results exceeded the high end of our guidance range. We had a strong finish to the quarter as the high ROI of adopting the Zscaler Zero Trust ExchangeTMplatform continues to resonate with customers and prospects in this challenging macro environment,” said Jay Chaudhry, Chairman and CEO of Zscaler. “Our customer engagements are strong, and our platform continues to expand with innovations that solve our customers’ real time IT challenges. We look forward to sharing more details on our upcoming earnings conference call.”
Based on our preliminary review, we expect to report the following results for the third quarter ended April 30, 2023:
Preliminary Results
Prior Guidance
Revenue
$415 million to $419 million
$396 million to $398 million
GAAP loss from operations
$59 million to $55 million
Not provided
Non-GAAP income from operations
$60 million to $64 million
$55 million to $56 million
Based on our preliminary review, we also expect to report calculated billings of approximately $478 million to $482 million, an increase of approximately 38% to 39% year-over-year.
We expect full year fiscal 2023 results to exceed prior guidance:
Updated Guidance
Prior Guidance
Revenue
$1,587 million to $1,591 million
$1,558 million to $1,563 million
Calculated billings
$1,970 million to $1,974 million
$1,935 million to $1,945 million
Non-GAAP income from operations (*)
$220 million to $224 million
$213 million to $215 million
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ZS spent 6 straight days in the $80 range - even without the prerelease, has been ridiculously cheap to keep loading up and ZS had taken up well over 50% of my portfolio weight as of Friday’s close
I’m happy this worked out for you, but this is gambling. I suggested to @WillO2028 that 30% positions were too high…50% is just…I don’t understand. Seems like you’d miss out on almost all other potential opportunities with one bet this big.
Also, I don’t see any posts from you on Zscaler in a while, Jon. …other than this one: An honest question, using DDOG as example - #15 by jonwayne235 …and that was just to note that they were down 15.5% YTD. (That didn’t sound bullish…what changed your mind in the last week or two?) Why not discuss a company you’re so concentrated in? We could all benefit…we all might learn.
To be honest, my investment strategy has been radically different since February of this year. It is very short term focused and anything I do is quite off topic for this board. It’s hard for me to talk about the company’s fundamentals when all I can mention is its valuation has become too cheap. Kind of like your prior ‘bets’ on TWLO or DOCU, PTON - there isn’t much to discuss if the reason you’re in it is a turnaround gamble or simply because they are “too cheap”.
For example I had a very large leveraged position in BILL going into its explosive earnings last week- but that was a calculated roll of the dice in the form of short puts- no long shares- betting on the option premiums melting away at 20% discount to closing price- which it did! But, clearly off topic to discuss that on the board, right?
Yes, options and levered bets are certainly off topic.
I understand this…but I still think it’s useful to know what others see as “too cheap.” That’s one reason I share my portfolio each month and love when Saul and others do the same. I can see what others are adding too. For example, @mooo added to his Zscaler in April for exactly this reason.
But I understand if your allocations change too much and are too options-heavy for a monthly portfolio update to make much sense. Again, congrats on a big win today.
This is quite encouraging after an already positive report last quarter. For those that don’t follow ZS closely, let’s recap what this means:
Quarterly revenue beat of >5% of their Q3 guide, which would put them at 46% YoY. They also raised their FY revenue guide by ~2%
Billings would stand at ~39% YoY which is higher than last quater’s reported 34% YoY. They also raised their FY billings guide by 1.5%
Quarterly non-gaap operating income margin would remain >15%. They also raised their FY guide by ~4%
Even with the 20% rise today, ZScaler is valued at <10x EV/S (NTM) and a FCF multiple in the mid-30s (NTM). While I’m admittedly trying to learn ‘what is cheap’ and ‘what isnt’, it still seems like an opportunity even for those that feel like they “missed out” as a result of today’s rise.