Zscaler (ZS) Q4 2024 earnings summary

Executive summary

• Q4 and full-year results exceeded guidance, with revenue up 30% year-over-year in Q4 to $593 million and 34% for the year to $2.17 billion, and record profitability metrics achieved.

• Bookings surpassed $1 billion in Q4, ARR crossed $2.5 billion, and strong customer demand for the Zero Trust Exchange platform with 47 million users across nearly 8,700 customers.

• Emerging products contributed 22% of new and upsell business in Fiscal 2024, expected to rise to mid-20s% in Fiscal 2025.

• Surpassed half a trillion daily transactions, leveraging cloud scale for AI analytics and data protection.

• Large enterprise and public sector wins, including 13 of 15 U.S. cabinet-level agencies and major GSIs.

Financial highlights

• Q4 revenue was $593 million, up 30% year-over-year; full-year revenue reached $2.17 billion, up 34%.

• Q4 billings grew 27% year-over-year to $911 million; deferred revenue increased 32% to $1.90 billion.

• Q4 gross margin was 81.1%, up 60 bps year-over-year; Q4 operating margin reached 22%; free cash flow margin was 23% in Q4 and 27% for the year.

• Q4 non-GAAP net income was $140.6 million, up from $100.9 million; Q4 GAAP net loss was $14.9 million.

• Ended Q4 with over $2.4 billion in cash, cash equivalents, and short-term investments.

Outlook and guidance

• Fiscal 2025 revenue guidance: $2.6–$2.62 billion, up 20–21% year-over-year; billings guidance: $3.11–$3.135 billion, up 19–20%.

• Q1 2025 revenue expected at $604–$606 million, up 22% year-over-year.

• Fiscal 2025 operating profit guidance: $530–$540 million; EPS: $2.81–$2.87; free cash flow margin: 23.5–24%.

• Data center CapEx to increase by three points as a percent of revenue in Fiscal 2025.

• Q1 non-GAAP net income per share expected at $0.62–$0.63, assuming 164 million diluted shares.