Overview

• Cloud security firm's Q2 revenue rose 26% yr/yr, beating analyst expectations

• Adjusted EPS for Q2 was $1.01, exceeding analyst estimates

Outlook

• Zscaler expects Q3 revenue between $834 mln and $836 mln, growth of 23%

• Company raises full-year ARR guidance to $3.730 bln to $3.745 bln

Result Drivers

• AI AND ZERO TRUST DEMAND - Robust demand across AI Security, Zero Trust Everywhere, and Data Security drove results

• ACQUISITIONS BOOST ARR - Red Canary acquisition contributed significantly to ARR growth, with 21% growth excluding its impact

• HIGH OPERATING MARGIN - Innovation and disciplined execution led to a non-GAAP operating margin over 22%

Company press release: ID:nGNX3YMVsP

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q2 Revenue	Beat	$815.75 mln	$798.82 mln (41 Analysts)
Q2 Adjusted EPS	Beat	$1.01	$0.90 (42 Analysts)
Q2 EPS		-$0.21
Q2 Adjusted Net Income	Beat	$168.70 mln	$152.56 mln (39 Analysts)
Q2 Net Income		-$34.31 mln

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 41 "strong buy" or "buy", 8 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the software peer group is "buy"

• Wall Street's median 12-month price target for Zscaler Inc is $302.50, about 94.3% above its February 25 closing price of $155.70

• The stock recently traded at 37 times the next 12-month earnings vs. a P/E of 86 three months ago

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.