Zscaler (ZS) Q3 2023 Earnings
How Did ZS Stock React to Q3 2023 Earnings?
S&P 500 over the same 30 days: +2.74%.
Did ZS Beat Earnings? Q3 2023 Results
Yes. Zscaler reported Q3 2023 earnings of $0.48 a share on Jun 1, 2023, beating the $0.42 consensus estimate by 14.3%. Revenue was $418.8M against a $415.7M estimate.
Zscaler posted a strong fiscal third quarter, with non-GAAP earnings per share of $0.48 beating the $0.42 consensus estimate by 14.29%, while revenue of $418.80 million edged past the $415.66 million consensus and grew 46.0% year over year. The headline driver behind the profitability improvement was a significant expansion in non-GAAP operating margin, which widened to 15% from 9% in the year-ago quarter as revenue leverage outpaced growth in operating expenses, helping lift free cash flow to $73.89 million. Calculated billings rose 40% to $482.29 million and deferred revenue climbed 44% to $1.18 billion, offering visibility into future revenue momentum. The company also raised its full-year fiscal 2023 revenue outlook to approximately $1.59 billion and increased its non-GAAP EPS guidance to $1.63 to $1.64, while projecting fourth-quarter revenue of $429.00 million to $431.00 million and non-GAAP EPS of roughly $0.49, signaling that management expects the current growth trajectory to continue into the final quarter.
- 46% year-over-year revenue growth driven by customer adoption of Zero Trust security platform across all sectors globally
- 135% year-over-year non-GAAP operating profit growth
- 40% year-over-year calculated billings growth to $482.3 million
- 44% year-over-year deferred revenue growth to $1,175.4 million
“The business value delivered by our Zero Trust security platform is continuing to drive customer adoption across all sectors globally, leading to another quarter of strong growth. On a year-over-year basis, we delivered 46% revenue growth, 40% billings growth, and 135% operating profit growth, all exceeding our guidance from last quarter.”
Zscaler CEO, on the earnings call
What Was Zscaler's Outlook in Q3 2023?
For Q4 fiscal 2023, Zscaler expects revenue of $429 million to $431 million, non-GAAP income from operations of $69 million to $70 million, and non-GAAP EPS of approximately $0.49 on ~157 million diluted shares. For full-year fiscal 2023, the company expects revenue of approximately $1.591 billion to $1.593 billion, calculated billings of $1.974 billion to $1.978 billion, non-GAAP income from operations of $224 million to $225 million, and non-GAAP EPS of $1.63 to $1.64 on ~156 million diluted shares.
ZS YoY Financials
| Metric | Q3 2023 | Q3 2022 | Year over year |
|---|---|---|---|
| Revenue | $418.8M | $286.8M | +46.0% |
| Gross Profit | $323.0M | $222.5M | +45.1% |
| Operating Income | −$55.7M | −$41.1M | +35.6% |
| Net Income | −$46.0M | −$29.8M | +54.6% |
Figures from SEC filings and company reports. Not investment advice.