Zscaler, Inc. Revenue & Financials

Zscaler generated $2.673 billion in total revenue for fiscal year 2025, a 23% increase from the $2.168 billion reported in fiscal 2024, with subscription revenue representing nearly 100% of total revenue. Operating loss was $128.5 million, or 5% of revenue, compared to $121.5 million, or 6% of revenue, in fiscal 2024. Non-GAAP operating income, which excludes stock-based compensation, amortization of acquired intangible assets, and other non-cash charges, was $580.1 million, or 22% of revenue, up from $442.2 million, or 20% of revenue, in fiscal 2024. This margin expansion demonstrates the operating leverage inherent in the cloud security model as fixed infrastructure costs are spread across a growing revenue base. Net loss for fiscal 2025 was $41.5 million, compared to $57.7 million in fiscal 2024, with diluted net loss per share of $0.27 compared to $0.39 in the prior year. Non-GAAP diluted net income per share was $3.28, compared to $2.60 in fiscal 2024, reflecting the company's underlying profitability when excluding stock-based compensation and other non-cash charges. The company's cash position is robust: cash, cash equivalents, and short-term investments totaled $3.572 billion as of July 31, 2025, an increase of $1.163 billion from July 31, 2024. In July 2025, the company issued $1.725 billion in convertible senior notes due 2028, receiving net cash proceeds of $1.7 billion, and fully repaid the $1.15 billion convertible senior notes due 2025. Operating cash flows were $972.5 million, or 36% of revenue, consistent with fiscal 2024, while free cash flows reached $726.7 million, or 27% of revenue, also consistent with the prior year. This cash generation funds the company's acquisition strategy, including the Red Canary acquisition in August 2025, the $350 million Avalor acquisition in 2024, and the Airgap Networks acquisition in 2024. The balance sheet carries $1.701 billion in noncurrent convertible senior notes and total liabilities of $4.621 billion against total assets of $6.420 billion, with stockholders' equity of $1.799 billion. Deferred revenue totaled $2.468 billion as of July 31, 2025, an increase of 30% year-over-year, with $2.054 billion classified as current and $414 million as noncurrent. This deferred revenue visibility is a critical financial strength, providing near-certainty for approximately 77% of the next year's revenue. The company's stock-based compensation expense was $685.5 million in fiscal 2025, up from $549.1 million in fiscal 2024, reflecting the competitive talent market in cybersecurity and the company's reliance on equity compensation to attract and retain employees. The effective tax rate was negative in fiscal 2025 due to the net loss position, with a provision for income taxes of $23.2 million on a pre-tax loss of $18.3 million. The company's return on assets and return on equity are not meaningful due to the net loss position, but the strong cash flow generation and deferred revenue growth indicate underlying business health. The price-to-sales ratio of approximately 8–10x and enterprise value-to-revenue ratio reflect the market's premium valuation of Zscaler's growth and recurring revenue model, while the forward P/E on a non-GAAP basis suggests expectations of significant earnings growth as margins expand. For fiscal 2026, the company guides to revenue of approximately $3.265–$3.284 billion, representing growth of 22–23%, with non-GAAP operating income of $728–$736 million and non-GAAP net income per share of $3.64–$3.68. The ARR guidance of $3.676–$3.698 billion indicates continued strong subscription momentum.