Zscaler Reports 23% Revenue Growth to $647.9 Million in Latest Quarter

Zscaler, Inc. reported significant financial growth in its latest quarterly results, with revenue reaching $647.9 million for the three months ended January 31, 2025, a 23% increase from $525.0 million in the same period last year. For the six months ending January 31, 2025, revenue totaled $1.276 billion, up 25% from $1.022 billion in the prior year. Despite this growth, the company continues to operate at a loss, reporting a net loss of $7.7 million for the latest quarter, an improvement from a loss of $28.5 million in the same quarter of the previous year. The net loss for the six-month period was $19.8 million, compared to $62.0 million in the prior year.

The increase in revenue was primarily driven by a rise in user adoption and additional subscriptions from existing customers, contributing approximately $88.3 million to the revenue growth. Zscaler's customer base expanded by 11% year-over-year, reaching over 8,650 customers, including approximately 35% of the Forbes Global 2000. The company also noted a dollar-based net retention rate of 115% for the trailing twelve months, indicating strong customer loyalty and expansion.

Operationally, Zscaler has made strategic investments in its workforce and technology, leading to increased operating expenses. Sales and marketing expenses rose by 11% to $307.9 million, while research and development expenses surged by 40% to $170.9 million, reflecting the company's commitment to enhancing its cloud platform. The total operating expenses for the quarter were $539.5 million, up from $453.3 million a year earlier. The company also completed the acquisition of Fidenty B.V. for $1.1 million, further expanding its technological capabilities.

Zscaler's balance sheet remains strong, with cash and cash equivalents totaling $1.76 billion as of January 31, 2025, up from $1.42 billion at the end of the previous fiscal year. The company reported total assets of $5.01 billion, with total liabilities of $3.40 billion. Deferred revenue, a key indicator of future revenue, stood at $1.88 billion, reflecting the company's robust subscription model. Looking ahead, Zscaler anticipates continued investment in sales and marketing, research and development, and infrastructure to support its growth trajectory, while also navigating macroeconomic challenges that may impact customer purchasing decisions.