Zscaler (ZS) The Citigroup Global TMT Conference summary

Financial and operational highlights

• Achieved Q4 revenue of $593 million, with 27% year-over-year billings growth to $911 million and free cash flow margin of 27% for the year.

• Surpassed $2.5 billion in ARR and processed over 500 trillion daily cloud transactions.

• Record bookings and new ACV, with strong performance in large enterprise accounts and ongoing sales transformation.

• Operating profitability remained above 20% for the year.

• Federal business expanded, now serving 13 of 15 cabinet-level agencies, with significant DoD opportunities.

Guidance and outlook

• Fiscal 2025 billings growth guided at 19%-20%, with first half growth lower (7%) and second half higher (23%) due to contracted billing schedules.

• Sales productivity expected to ramp in the second half as new, experienced reps focus on large enterprise accounts.

• Comps expected to ease in fiscal 2026, improving growth trajectory.

• Free cash flow margin expected to dip to 23.5%-24% in fiscal 2025 due to one-time CapEx for data center expansion.

Sales strategy and market positioning

• Transitioned sales organization to target majors (over 40,000 employees) and large enterprises, with higher quotas and deeper relationships.

• Emphasis on business value and cost reduction through Zero Trust architecture, driving strong C-level engagement.

• Significant upsell opportunity within existing customer base, with potential to 2-3X ARR.

• Federal and international government sectors identified as early-stage, high-growth opportunities.