Q3 2024 Zscaler Inc Earnings Call Transcript

May 30, 2024 / 08:30PM GMT

Transcript 10-Q8-K

Key Points

Positve

Revenue in Q3 grew by 32% year-over-year, and billings grew by 30%.
The number of $1 million-plus ARR customers increased by 31% year-over-year to 523.
Operating profit nearly doubled year-over-year, and operating margin reached a record 22%.
First quarter of GAAP profitability on a net income basis for Q3.
Strong customer interest in emerging products, contributing nearly a quarter of new and upsell business.

Negative

Higher than expected sales attrition in the quarter.
Ongoing customer scrutiny of large deals.
Sales cycles for large deals are extending towards 12 months.
Attrition in the sales organization due to the departure of the COO.
Guidance for Q4 indicates a significant deceleration in year-over-year growth.

Operator

Hello, and thank you for standing by. Welcome to Zscaler third-quarter 2024 earnings conference call. (Operator Instructions)

I would now like to turn the call over to Ashwin Kesireddy, Vice President of Investor Relations and Strategic Finance. Sir, you may begin.

Ashwin Kesireddy

Zscaler Inc - Vice President, Investor Relations & Strategic Finance

Good afternoon, everyone, and welcome to the Zscaler third quarter fiscal year 2024 earnings conference call. On the call with me today are Jay Chaudhry, Chairman and CEO; and Remo Canessa, CFO.

Please note we have posted our earnings release and a supplemental financial schedule to our Investor Relations website. Unless otherwise noted, all numbers we talk about today will be on an adjusted non-GAAP basis. You will find the reconciliation of GAAP to the non-GAAP financial measures in our earnings release.

I'd like to remind you that today's discussion will contain forward-looking statements, including, but not limited to, the company's anticipated future revenue, calculated

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