On November 27, 2023, Zscaler Inc (ZS, Financial) released its 8-K filing, detailing the financial results for the first quarter of fiscal year 2024, which ended on October 31, 2023. The company, a leader in cloud security, delivered a strong performance with significant year-over-year growth in revenue, calculated billings, and deferred revenue. Additionally, Zscaler Inc (ZS) demonstrated improved profitability with a notable reduction in GAAP net loss and a substantial increase in non-GAAP net income.
Financial Performance Overview
Zscaler Inc (ZS, Financial) achieved a 40% increase in revenue, amounting to $496.7 million for the quarter. The company's calculated billings grew by 34% to $456.6 million, while deferred revenue expanded by 39% to $1.399.5 billion. The GAAP net loss was significantly reduced to $33.5 million from a loss of $68.2 million in the first quarter of the previous fiscal year. Highlighting the company's profitability, non-GAAP net income reached $106.5 million, more than doubling from $44.0 million year-over-year.
Income Statement and Cash Flow Analysis
From an operational standpoint, Zscaler Inc (ZS, Financial) reported a GAAP loss from operations of $46.1 million, which is an improvement from a loss of $69.1 million in the prior year. The non-GAAP income from operations stood at $89.7 million, or 18% of revenue, up from $42.1 million, or 12% of revenue, in the first quarter of fiscal 2023. The company's cash flow also reflected strong performance, with cash provided by operations at $260.8 million, or 53% of revenue. Free cash flow was reported at $224.7 million, or 45% of revenue, marking a significant increase from the previous year's $95.6 million, or 27% of revenue.
Strategic Developments and Future Outlook
During the quarter, Zscaler Inc (ZS, Financial) made key appointments to scale its cloud security business and announced a joint solution with partners to enhance security for healthcare organizations. The company was also recognized as one of Fortune’s Best Workplaces in Technology for 2023 and released a report highlighting a 400% increase in IoT malware attacks year-over-year.
Looking ahead, Zscaler Inc (ZS, Financial) provided a financial outlook for the second quarter of fiscal 2024, expecting revenue between $505 million to $507 million and non-GAAP income from operations of $84 million to $86 million. For the full fiscal year 2024, the company anticipates revenue of approximately $2.09 billion to $2.10 billion and calculated billings of $2.52 billion to $2.56 billion.
Balance Sheet Highlights
As of October 31, 2023, Zscaler Inc (ZS, Financial) reported cash, cash equivalents, and short-term investments totaling $2.324.4 million, an increase from the previous quarter. The company's strong balance sheet positions it well to continue investing in growth and innovation.
Expert Commentary
Chairman and CEO Jay Chaudhry commented on the results, stating,
We had a strong start to our fiscal year with all key metrics coming above our guidance. We are enabling enterprises to move forward with their key transformative initiatives - Zero Trust and AI - which is driving demand for our Zero Trust Exchange."He also emphasized the company's commitment to scaling its go-to-market and R&D organizations to meet growing demand and support long-term growth.
Conclusion
Zscaler Inc (ZS, Financial)'s first-quarter fiscal 2024 results reflect a company that is not only growing rapidly but also improving its profitability metrics. With a solid financial outlook and strategic initiatives in place, Zscaler Inc (ZS) is well-positioned to capitalize on the increasing demand for cloud security solutions.
Explore the complete 8-K earnings release (here) from Zscaler Inc for further details.
