Latest news with #ZscalerInc
Associated Press
13 hours ago
- Business
- Associated Press
Zscaler Announces Proposed Offering of $1.5 Billion of Convertible Senior Notes Due 2028
SAN JOSE, Calif., June 30, 2025 (GLOBE NEWSWIRE) -- Zscaler, Inc. (Nasdaq: ZS) today announced that it intends to offer $1.5 billion aggregate principal amount of its convertible senior notes due 2028 (the 'notes') in a private offering to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the 'Securities Act'). Zscaler also intends to grant the initial purchasers of the notes a 13-day option to purchase up to an additional $225 million aggregate principal amount of notes. The offering is subject to market and other conditions, and there can be no assurance as to whether or when the offering may be completed, or as to the actual size or terms of the offering. The notes will be senior unsecured obligations of Zscaler and will accrue interest payable semiannually in arrears. The notes will mature on July 15, 2028, unless earlier converted or repurchased and will be convertible under certain circumstances into cash, shares of Zscaler's common stock or a combination of cash and shares of Zscaler's common stock, at Zscaler's election. The interest rate, initial conversion rate, repurchase rights and other terms of the notes will be determined at the time of pricing of the offering. Zscaler intends to use a portion of the net proceeds from the offering to pay the cost of the capped call transactions described below. Zscaler intends to use the remainder of the net proceeds for general corporate purposes, which may include working capital, capital expenditures, and potential acquisitions and strategic transactions. Further, in connection with the pricing of the notes, Zscaler expects to enter into privately negotiated capped call transactions with one or more of the initial purchasers and/or their respective affiliates and/or other financial institutions (the 'option counterparties'). The capped call transactions are expected to cover, subject to anti-dilution adjustments substantially similar to those applicable to the notes, the number of shares of Zscaler's common stock that will initially underlie the notes. The capped call transactions are expected generally to reduce the potential dilution to Zscaler's common stock upon any conversion of notes and/or offset any cash payments Zscaler is required to make in excess of the principal amount of converted notes, as the case may be, with such reduction and/or offset subject to a cap. If the initial purchasers exercise their option to purchase additional notes, Zscaler expects to enter into additional capped call transactions with the option counterparties. Zscaler has been advised that, in connection with establishing their initial hedges of the capped call transactions, the option counterparties or their respective affiliates may purchase shares of Zscaler's common stock and/or enter into various derivative transactions with respect to Zscaler's common stock concurrently with or shortly after the pricing of the notes. This activity could increase (or reduce the size of any decrease in) the market price of Zscaler's common stock or the notes at that time. In addition, Zscaler has been advised that the option counterparties and/or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to Zscaler's common stock and/or purchasing or selling Zscaler's common stock or other securities of Zscaler in secondary market transactions following the pricing of the notes and prior to the maturity of the notes (and are likely to do so during the observation period related to a conversion of the notes, in connection with any fundamental change repurchase of the notes, and to the extent Zscaler unwinds a corresponding portion of the capped call transactions, following any other repurchase of the notes). This activity could also cause or avoid an increase or a decrease in the market price of Zscaler's common stock or the notes, which could affect the ability of noteholders to convert the notes, and, to the extent the activity occurs during any observation period related to a conversion of notes, it could affect the number of shares and value of the consideration that a noteholder will receive upon conversion of its notes. The notes will be offered to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act. Neither the notes, nor any shares of Zscaler's common stock issuable upon conversion of the notes, have been registered under the Securities Act or any state securities laws, and unless so registered, may not be offered or sold in the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and other applicable securities laws. This press release is neither an offer to sell nor a solicitation of an offer to buy any securities, nor shall it constitute an offer, solicitation or sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally relate to future events. In some cases, you can identify forward-looking statements because they contain words such as 'believe,' 'may,' 'will,' 'potentially,' 'estimate,' 'continue,' 'anticipate,' 'intend,' 'could,' 'would,' 'project,' 'plan,' or 'expect,' or the negative of these words, or other similar terms or expressions that concern Zscaler's expectations, strategy, plans, or intentions. Forward-looking statements in this release include, but are not limited to, statements concerning the proposed terms of the notes, capped call transactions and repurchase or early conversion of the notes, exercise of the purchasers option to purchase additional notes, and the anticipated use of proceeds from the offering. Zscaler's expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. The forward-looking statements contained in this release are also subject to other risks and uncertainties, including those more fully described in Zscaler's filings with the Securities and Exchange Commission, including Zscaler's Quarterly Report on Form 10-Q filed on May 29, 2025. The forward-looking statements in this release are based on information available to Zscaler as of the date hereof, and Zscaler disclaims any obligation to update any forward-looking statements, except as required by law. Investor Relations Contact: Ashwin Kesireddy Vice President, Investor Relations & Strategic Finance [email protected] Media Contact: Nick Gonzalez, Sr. Manager, Media Relations [email protected]
Yahoo
18-06-2025
- Business
- Yahoo
BofA Raises Zscaler's (ZS) PT to $340 Amid Rising Platform Adoption
Zscaler Inc. (NASDAQ:ZS) is one of the 10 best growth stocks to buy according to billionaires. On June 9, Bank of America analyst Tal Liani raised his price target on Zscaler to $340 from $285, while maintaining a Buy rating, following the company's CEO, Jay Chaudhry's, presentation at the Bank of America's 2025 Global Technology Conference (GTC). The analyst highlighted sustained customer demand and increasing platform adoption as key factors contributing to the higher valuation. A computer engineer analyzing a server network for cyber security threats. On June 5, management highlighted several positive trends during the GTC event. In the last quarter, over 70% of new annual contract value (ACV) came from upselling to existing clients, while new logo ACV grew 40% year-over-year. Zscaler Inc. (NASDAQ:ZS) is expanding its reach beyond core secure web gateway services, with strong traction in data security and Agentic operations now representing nearly $1 billion in annual recurring revenue (ARR). Notably, data security alone accounted for $350 million in ARR last quarter. Its recent acquisition of Airgap Networks highlights a deeper investment in cybersecurity advancements. While competition and pricing pressure remain, Zscaler's product differentiation and focus on efficiency appear to be supporting its growth outlook. In Liani's view, rising demand for Zero Trust solutions justifies a higher multiple, primarily as Zscaler executes well on both innovation and customer expansion. Zscaler Inc. (NASDAQ:ZS) is a provider of cloud-based cybersecurity solutions. Its Zero Trust architecture ensures secure connections between users, devices, and applications, regardless of location. While we acknowledge the potential of ZS as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money. Disclosure: None.
Yahoo
30-05-2025
- Business
- Yahoo
Zscaler Inc (ZS) Q3 2025 Earnings Call Highlights: Strong Growth Amid Economic Challenges
Revenue: $678 million, up 23% year over year and 5% sequentially. Annual Recurring Revenue (ARR): Approximately $2.9 billion, representing 23% year-over-year growth. Remaining Performance Obligations (RPO): $4.978 billion, up 30% year over year. Calculated Billings: $785 million, up 25% year over year. Gross Margin: 80.3%, compared to 81.4% in the year-ago quarter. Operating Margin: Approximately 22%, comparable year over year. Free Cash Flow Margin: 18%, including data center CapEx at 11% of revenue. Cash and Cash Equivalents: Approximately $3 billion. Guidance for Q4 Revenue: $705 million to $707 million, reflecting approximately 19% year-over-year growth. Full-Year Fiscal 2025 Revenue Guidance: $2.659 billion to $2.661 billion, reflecting approximately 23% year-over-year growth. Full-Year Fiscal 2025 Free Cash Flow Margin Guidance: Approximately 25.5% to 26%. Warning! GuruFocus has detected 4 Warning Sign with ZS. Release Date: May 29, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Zscaler Inc (NASDAQ:ZS) achieved its best Q3 with TCV bookings of over $1 billion and remaining performance obligations nearing $5 billion. The company reported a strong year-over-year growth in new logo ACV of over 40% and total new ACV up double digits. Zscaler Inc (NASDAQ:ZS) maintained a robust annual recurring revenue (ARR) of approximately $2.9 billion, marking the third consecutive quarter of 23% year-over-year growth. The company's free cash flow margin of 28% combined with a 24% revenue growth resulted in a Rule of 52 performance, surpassing the industry benchmark of Rule of 40. Zscaler Inc (NASDAQ:ZS) continues to expand its platform with significant growth in Zero Trust Everywhere, Data Security Everywhere, and Agentic Operations, with these categories approaching $1 billion in ARR. The macroeconomic environment remains challenging, with ongoing economic uncertainty causing customers to be cautious about IT spending. Zscaler Inc (NASDAQ:ZS) faces increased scrutiny of large deals, which could impact the timing and closure of significant contracts. The company's total gross margin decreased to 80.3% from 81.4% in the year-ago quarter, influenced by the introduction of new products optimized for faster go-to-market rather than margins. There is potential variability in the dollar-based net retention rate due to the company's success in selling bigger bundles and faster upsells, which could affect future metrics. The acquisition of Red Canary, valued at $675 million, is expected to be largely neutral to FY26 consensus operating margin, indicating limited immediate financial benefit. Q: How does Zscaler manage the expanding product portfolio and ensure sales focus, especially with the introduction of Z-Flex? A: Jay Chaudhry, CEO, explained that Zscaler uses a two-tier model where the core sales team covers all products with an account-centric approach, while specialized take-off teams focus on newer product areas. Z-Flex, a flexible purchasing program, evolved from customer demand for modularity and flexibility, allowing them to try and swap modules without repeated procurement cycles. The program has already contributed over $65 million in TCV bookings in its first quarter. Q: How is the macroeconomic environment affecting Zscaler's business, and what trends are being observed? A: Jay Chaudhry noted that while the overall spending environment remains challenging with tight budgets, cybersecurity, particularly Zero Trust architecture and AI security, remains a priority. Zscaler did not experience a softer April, likely due to not selling security appliances. The company continues to work closely with customers to reduce costs and become a strategic partner, translating into ARR growth. Q: Can you explain the structure and impact of Z-Flex deals on Zscaler's financial metrics? A: Remo Canessa, CFO, stated that Z-Flex deals are structured to provide customers with flexibility in adopting and swapping modules at predetermined pricing, reducing procurement cycles. These deals are typically longer in duration, moving from three to four or five years. Zscaler plans to transition from billing to ARR as a primary metric in fiscal '26, which aligns with the flexibility offered by Z-Flex. Q: How does the acquisition of Red Canary fit into Zscaler's strategy, and what benefits does it bring? A: Jay Chaudhry highlighted that Red Canary accelerates Zscaler's vision to become a leading player in the SOC market. The acquisition brings experienced detection and threat intel engineers, sophisticated agentic AI technology, and a seasoned go-to-market team. This complements Zscaler's existing data-fabric technology and enhances its security operations solutions. Q: What role does branch connector play in new customer wins, and how is it contributing to Zscaler's growth? A: Jay Chaudhry explained that the branch connector, now a plug-and-play appliance, simplifies branch infrastructure by integrating Zero Trust Branch connectivity and device segmentation. It has been instrumental in attracting new customers, with 59% of Zero Trust Branch buyers being new logos. The solution addresses customer pain points by eliminating the need for multiple legacy network devices. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Washington Post
29-05-2025
- Business
- Washington Post
Zscaler: Fiscal Q3 Earnings Snapshot
SAN JOSE, Calif. — SAN JOSE, Calif. — Zscaler Inc. (ZS) on Thursday reported a loss of $4.1 million in its fiscal third quarter. The San Jose, California-based company said it had a loss of 3 cents per share. Earnings, adjusted for one-time gains and costs, were 84 cents per share.
Yahoo
28-05-2025
- Business
- Yahoo
Should You Invest in the Global X Cloud Computing ETF (CLOU)?
Launched on 04/12/2019, the Global X Cloud Computing ETF (CLOU) is a passively managed exchange traded fund designed to provide a broad exposure to the Technology - Cloud Computing segment of the equity market. Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors. Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Cloud Computing is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 7, placing it in top 44%. The fund is sponsored by Global X Management. It has amassed assets over $341.10 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Cloud Computing segment of the equity market. CLOU seeks to match the performance of the INDXX GLOBAL CLOUD COMPUTING INDEX before fees and expenses. The Indxx Global Cloud Computing Index provides exposure to exchange-listed companies in developed and emerging markets that are positioned to benefit from the increased adoption of cloud computing technology. Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same. Annual operating expenses for this ETF are 0.68%, making it one of the more expensive products in the space. It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis. Looking at individual holdings, Snowflake Inc-Class A (SNOW) accounts for about 5.50% of total assets, followed by Zscaler Inc (ZS) and Twilio Inc - A (TWLO). The top 10 holdings account for about 44.53% of total assets under management. The ETF has lost about -5.01% so far this year and was up about 14.20% in the last one year (as of 05/28/2025). In that past 52-week period, it has traded between $18.22 and $26.34. The ETF has a beta of 1.14 and standard deviation of 30.01% for the trailing three-year period. With about 39 holdings, it has more concentrated exposure than peers. Global X Cloud Computing ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, CLOU is an excellent option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well. WisdomTree Cloud Computing ETF (WCLD) tracks BVP NASDAQ EMERGING CLOUD INDEX and the First Trust Cloud Computing ETF (SKYY) tracks ISE Cloud Computing Index. WisdomTree Cloud Computing ETF has $396.97 million in assets, First Trust Cloud Computing ETF has $3.40 billion. WCLD has an expense ratio of 0.45% and SKYY charges 0.60%. To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Global X Cloud Computing ETF (CLOU): ETF Research Reports Snowflake Inc. (SNOW) : Free Stock Analysis Report Twilio Inc. (TWLO) : Free Stock Analysis Report First Trust Cloud Computing ETF (SKYY): ETF Research Reports Zscaler, Inc. (ZS) : Free Stock Analysis Report WisdomTree Cloud Computing ETF (WCLD): ETF Research Reports This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
