Revenue up 32% YoY, up 5% QoQ
Guidance was for $534 -$536 million (WS estimates were at the high end of that), and they did $553.2 million.
Adjusted profits were $0.88/share, well above the guidance range of 64 to 65 cents a share, and WS expectations of 65 cents.
Billings grew 30%
2922 customers with over $100,000 in ARR
523 customers with over $1million in ARR (up 31% YoY)
50 customers with over $5 million ARR
Guidance for next quarter revenue is $565 million to $567 million, reflecting year-over-year growth of 24% to 25%. WS was at the low end of that range. Guidance for EPS is $0.69 to $0.70 per share.
Operating profit almost doubled YoY
First quarter of GAAP profitability on a net income basis.
Developing AI applications, so they get that buzzword in.
I’m still digesting the ER call, with the CEO claiming competition is years behind, noting that 285 CXOs in the Fortune 1000 have bought ZScaler for more than one company, claims a NPS of 7, NRR at 116%, etc.
The TMF transcript wasn’t up yet, so here’s Seeking Alpha’s:
Whilst I have been happy to hold both ZScaler and Crowdstrike and have held a more favourable view of ZScaler than most on this board, for my mind these results should really help close the perception gap between the two.
One additional point that was brought up in the ER remarks was the progress they are making in further penetrating US government agencies.
WRT “dissing” the competition, what I would say is that this timeline estimation of their competitive leadership is relatively gentlemanly compared to the trash talking that Cloudlflare, Crowdstrike and Palo Alto get into (whether targeting ZScaler, Sentinel One or anyone else).
Looking forward to reviewing the ER transcript too.
I’m with you. I realize it’s a red, red day for all tech, but Zscaler’s earnings bump to the $180’s only got it back to mid-May levels. After fading back to the mid 160’s, it’s actually down in May. That’s an opportunity in my eyes. After initially trimming on the bounce, I’m now adding back to this, my now second largest position. I think once the dust of today settles, the market will find a very healthy Zscaler that is not as large and maybe not quite as dominant as its partner Crowdstrike, but is very much in the same league, yet sports a multiple that’s about half of what CRWD’s is.
Yeah, sorry, I didn’t choose the appropriate word. I didn’t mean that Chaudhry was throwing shade as much as I meant that he has confidence in ZScaler’s product positioning and roadmap.
Yep and I think that is reflected in almost all the investment houses that cover ZS. I don’t usually pay much attention to analyst ratings and price targets but when I read these, I couldn’t believe how far from the targets ZS’s share price sits at - I mean really unusually so.
From an intrinsic valuation as well as Wall St buying support there seems to be substantial appreciation potential here. Then throw in a stellar growth story and it seems a very very safe growth investment opportunity.
There is another angle from which to view the relative valuations and business results of crwd and zs. Most of us tend to lump the two companies into the same “quality” bucket, and as investors our bias is to think that xds is under-appreciated, and that it’s only a question of time before its price gets back to the same relative level as crowd.
But what if the market is instead correct regarding the re-valuation of saas companies? If that is what we are looking at, then it is NOT that zs has a hole to climb out of, but that crwd has a hole it has not yet fallen into.
Maybe the grand saas period has ended, or is on a long long vacation?
My take is partially in agreement with you. Some things (CRWD mostly at this point…NET and SNOW have gotten a lot cheaper) are overpriced, while others like MNDY and ZS are too cheap.
I’m not sure why the market is “looking in the wrong places.” Maybe CRWD and SNOW just have sex appeal at present?