# Zscaler Inc. (ZS) — Financial Analysis

**Exchange:** NASDAQ  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-18  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/ZS/thesis · /stocks/ZS/memo

## Financial Snapshot

---
ticker: ZS
step: 04
generated: 2026-05-13
source: quick-research
---

### Zscaler, Inc. (ZS) — Financial Snapshot

#### Income Statement Summary

| Metric | FY2022 | FY2023 | FY2024 | YoY |
|--------|--------|--------|--------|-----|
| Revenue | $1.09B | $1.617B | $2.168B | +34% |
| Gross Margin | ~77% | ~78% | ~78% | |
| GAAP Operating Margin | ~-20% | ~-15% | ~-10% | improving |
| Non-GAAP Operating Margin | ~19% | ~22% | ~25% | |
| GAAP Net Income | ~-$0.4B | ~-$0.2B | ~-$0.2B | improving |

*FY2025: Revenue $2.673B (+23.3% YoY); ARR surpassed $3B. Q4 FY2025: Z-Flex bookings $175M TCV (+70% sequential); AI Security ARR $400M+; RPO growth +35%. Revenue growth decelerated from 34% (FY2024) to 23% (FY2025) — the key bear narrative.*

#### Cash Flow & Balance Sheet (FY2024)

| Metric | Value |
|--------|-------|
| Operating Cash Flow | $779.8M (36% of revenue) |
| Free Cash Flow | $585.0M (27% of revenue) |
| Capital Expenditures | ~$195M |
| Cash & Equivalents | ~$2.5B |
| Total Debt | ~$1.0B (convertible notes) |

*FCF profile is strong: margins expanded from 21% (FY2023) to 27% (FY2024). Q4 FY2025 FCF margins reportedly hit 52% in the quarter — reflecting operating leverage at scale. Net cash positive. Significant SBC (~20%+ of revenue) suppresses GAAP profitability but non-GAAP earnings are solidly positive.*

#### Key Ratios (approximate)
- P/E: ~50–70x (non-GAAP FY2026E) | EV/Sales: ~10x | FCF Yield: ~2–3%
- Revenue Growth (TTM): ~23% | Non-GAAP Operating Margin: ~25%

#### Growth Profile
Zscaler compounded revenue from $1.09B (FY2022) to $2.673B (FY2025) — 35% CAGR — but annual growth rates decelerated sharply: 62% → 48% → 34% → 23%. This deceleration narrative drove the stock from highs (~$250+) to 60% below peak by early 2026. The ARR $3B+ milestone, Z-Flex platform deals, and AI Security ARR $400M+ represent the re-acceleration thesis. FCF quality is excellent at 27%+ margins.

#### Forward Estimates
- FY2026: Revenue ~$3.2–3.4B (+20–27%); FCF margin expanding toward 28–30%
- AI Security ARR: $400M → tracking toward $600M+ as AI agent traffic monitoring scales
- Z-Flex TCV bookings: $175M Q4 FY2025 → expected to drive multi-year contract backlog
- Analyst mean PT: ~$200–220 (82% Buy consensus); bull case $366; bear case ~$118–120
- RPO growth (+35%) running well ahead of revenue — leading indicator for re-acceleration

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/ZS/fundamental

## Navigation

- Overview: /stocks/ZS
- Financials (this page): /stocks/ZS/financials
- Thesis: /stocks/ZS/thesis
- Investment Memo: /stocks/ZS/memo
- Coverage universe: /stocks