Zscaler - All clear for growth?

Here's why.

Revenue continued to grow 52% YoY for Q2'23. Versus the preceding quarter, it was up by 9%.

Gross margins stayed stable. within the band of 77-78% for GAAP gross margins. Non-GAAP gross margins were also within the band of 80-81%.

Operating losses narrowed down from USD 83.9 million to USD 65.2 million. The latest quarter operating margin is -16.83%, an improvement from -19.43% obtained in the preceding quarter.

As tech companies scramble to reach operating profitability, the same applies to Zscaler. For FY 23, the management expects a continuous improvement in operating efficiency to achieve a full-year operating margin of 13.7%.

However, stock prices plunged as billings growth was under analyst estimates. So what do you think? Are the results good? Or is Wall Street asking too much?

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