NASDAQ$ZS

Zscaler Inc · Q3 2020 earnings

Q3 2020 earnings · · Investor relations

Briefing

Reported strong financial results driven by sales execution and the increasing need for cloud security solutions during the COVID-19 pandemic.

Zscaler reported a strong third quarter with revenue growing 40% year-over-year to $110.5 million and calculated billings increasing 55% year-over-year to $131.3 million. The company benefited from the increased demand for secure remote access solutions due to the COVID-19 pandemic.

  • Revenue increased by 40% year-over-year, reaching $110.5 million.
  • Calculated billings grew by 55% year-over-year to $131.3 million.
  • GAAP net loss was $19.3 million, compared to a net loss of $12.2 million in the third quarter of fiscal 2019.
  • Non-GAAP net income was $9.0 million, compared to $7.4 million in the third quarter of fiscal 2019.

Headline financials

Total Revenue

$111M

Previous: $79.1M+39.7%
EPS (adj)

$0.07

Previous: $0.05+40.0%
Capital Expenditures

-$24.8M

Previous: -$16.7M-48.5%
Free Cash Flow

$22.9M

Previous: $23.5M-2.6%
Net Income

-$19.3M

Previous: -$12.2M-58.0%
Operating Income

-$20.5M

Previous: -$13.5M-51.5%
Gross Profit

$85.9M

Previous: $64.2M+33.9%
Cash & Equivalents

$125M

No prior period

Revenue & EPS history

Zscaler · Revenue · Quarterly

$111M

Q3 2020+39.7%vs Q3 2019
Beat estimate in 10 of 12 quarters(83%)
ActualEstimate

Forward guidance

For the fourth quarter of fiscal 2020, Zscaler expects total revenue of $117 million to $119 million and non-GAAP earnings per share of approximately $0.02 to $0.03.

Tailwinds

  • Total revenue of $117 million to $119 million
  • Non-GAAP income from operations of $2 million to $4 million
  • Non-GAAP earnings per share of approximately $0.02 to $0.03
  • Assuming approximately 140 million common shares outstanding
  • Full year fiscal 2020, total revenue of $422 million to $424 million

Headwinds

  • Calculated billings of $529 million to $531 million
  • Non-GAAP income from operations of $24 million to $26 million
  • Non-GAAP earnings per share of $0.20 to $0.21
  • Assuming approximately 138 million common shares outstanding
  • Forward-looking statements and actual results may differ materially

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 19 quarterly earnings reports · overlaid with Q3 2020

Historical avgQ3 2020

+2.0%

Avg return

Earnings day

+2.0%

Avg return

5 days after

+2.6%

Avg return

30 days after

41%

13 / 32 earnings

Positive

+31.6%

Q3 2020

Best reaction

-21.4%

Q4 2024

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q3 2026
Q2 2026-3.0%-6.7%-20.4%
Q1 2026-6.8%-16.0%-20.4%
Q4 2025-1.5%+2.6%+11.2%
Q3 2025+10.0%+18.2%+25.6%
Q2 2025+2.9%+1.5%-11.1%
Q1 2025-3.8%+2.6%-12.7%
Q4 2024-21.4%-21.6%-15.2%
Q3 2024+3.4%+2.9%+16.9%
Q2 2024-7.6%-13.0%-18.8%
Q1 2024+0.4%+2.6%+16.5%
Q4 2023-0.0%+1.5%-3.2%
Q3 2023+5.1%+12.9%+8.0%
Q2 2023-7.2%-8.2%-9.0%
Q1 2023-3.3%-13.1%-16.1%
Q4 2022+27.3%+22.7%+15.2%
Q3 2022+20.7%+15.5%+28.8%
Q2 2022-7.3%+3.5%-3.8%
Q1 2022-10.6%-12.0%-8.8%
Q4 2021-3.6%-1.7%-5.0%
Q3 2021+11.4%+11.4%+25.9%
Q2 2021-1.3%-2.5%-18.3%
Q1 2021+22.4%+17.4%+31.7%
Q4 2020-0.4%-2.3%+14.1%
Q3 2020+31.6%+42.5%+42.2%
Q2 2020-16.4%-22.6%-17.7%
Q1 2020-2.4%-8.6%-7.3%
Q4 2019-19.9%-23.4%-23.7%
Q3 2019-3.5%+1.1%+7.7%
Q2 2019+19.4%+13.4%+39.8%
Q1 2019+9.9%+3.2%+0.5%
Q4 2018-5.4%+3.4%-16.3%
Q3 2018+25.4%+36.9%+26.2%
Q2 2018
Q1 2018
Q4 2017
Q3 2017
Q2 2016
Q1 2016
Q4 2016
Q3 2016

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