The following is a summary of the Zscaler, Inc. (ZS) Q3 2024 Earnings Call Transcript:
Financial Performance:
Zscaler reported a 32% year-over-year increase in revenue, amounting to $553 million in Q3, with billings also growing by 30%.
Operating margin reached a record 22%, showing approximately 680 basis points increase year-over-year, and operating profit nearly doubled compared to the same period last year.
Guidance for Q4 includes expected revenue between $565 million and $567 million, indicating year-over-year growth of 24-25%.
Full-year fiscal 2024 revenue projection increased to $2.140 billion to $2.142 billion, reflecting a year-over-year growth of about 32%.
Business Progress:
Zscaler's disciplined growth strategy was highlighted by the expansion of its $1 million-plus ARR customer base by 31% year-over-year.
The company made strategic acquisitions of Avalor and Airgap Networks, aimed at extending its platform into new markets including vulnerability management, security operations, and branch security.
Innovation in AI-powered solutions and Zero Trust architecture has solidified, with significant product advancements and expansions, including the introduction of Zero Trust Network Segmentation, Unified Vulnerability Management, and AI Cloud solutions.
Opportunities:
Continued emphasis on Zero Trust architecture, highlighted by the development and expansion of new services around Zero Trust segmentation and vulnerability management, presents opportunities for market growth and client acquisition.
Strategic acquisitions such as Avalor and Airgap Networks are set to enhance Zscaler's offerings in data security and network management, targeting new verticals and expanding market reach.
Risks:
Higher than expected sales attrition rates observed during Q3 could impact near-term growth and scalability, as new hires may take time to reach full productivity.
More details: Zscaler IR
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