I also use a similar billings model, inspired by @wsm007. So, how did Zscaler do versus my expectation? (Laid out here: Ben’s Portfolio update end of July 2023)
- Reporting Fiscal Q4 2023 on 9/5/23.
- Revenue expectation: $454M (8.3% QoQ, 43% YoY), expectation from billings model and 5.5% beat.
—> They managed $455M (8.6% QoQ, 43% YoY), exceeding my expectation by a hair.
- Q1 new revenue guide: $477M (5% QoQ, 34% YoY) which I would interpret as $501M (10.3% QoQ, 41% YoY) as my expectation from billings model.
—> They guided for $473M (4% QoQ, 33% YoY), slightly below my expectation.
- I would like to see ~$711M in billings.
—> They managed $719M, exceeding my expectation.
- I would like to see >=6% large customer growth.
—> They grew large customers by 7.3% QoQ, significantly exceeding my expectation. (They also grew $1M customers by an astonishing 12.3% QoQ, adding a record 49 this Q - amazing!
- I would like to see ~20% FCF margin.
—> They managed 22%, exceeding my expectation.
- I would like to see 17-18% Operating income margin (~$79M), confirming new profitability trend hypothesis.
—> They managed 19% ($86M), exceeding my expectation and confirming what I saw coming already a few quarters ago: That they are strongly breaking out of their profitability trends as discussed here: https://discussion.fool.com/t/ben-s-portfolio-update-end-of-june-2023/93997#zscaler-7
- I would like to see a strong first FY24 guide.
—> I’ll have to think about this one a bit more, but given their expected beat and raises to come I think this is a healthy start. Need some more color though first before a final judgement.
- Detailed thoughts: Ben’s Portfolio update end of June 2023
Overall, amazing amazing numbers! I am really happy with how this company is developing!
Just FYI, here is the updated fit with the latest numbers, @wsm007 was referring to:
Ben