I have covered the technology sector for 25 years. Since 2003, I have been the managing editor of Tech-Stock Prospector, a monthly publication offering research and analysis on small- and large-cap companies. Prior to that, I analyzed the technology industry as senior writer for Louis Rukeyser's Wall Street newsletter.
are attempting to rebound after tumbling 40% from the 52-week high of $259.61 reached in early February to a low of $155.25 on May 30. Recently trading around $177.30, the stock has rallied 14% from this low, but is still off 20% YTD.
In FQ3, gross margin of 81.4% rose 120 basis points year over year. Operating margin was a record 22%. Free cash flow margin hit 22%. EPS of 88 cents beat the consensus by 33 cents. Total RPO of $3.824 billion went up against a tough year-over-year comp, but still rose 27%. Dollar-based net retention ticked down slightly to 116% from 117% in FQ2.
As one of the major players in the security space, Zscaler can easily attract top sales talent. In May, it hired about the same number of reps as in the entire April quarter. Management cautioned that it would take some time for these new reps to ramp to full productivity . Without giving formal guidance for FY’25 , Zscaler CFO Remo Canessa on the FQ3 call said these new hires would pressure billings growth next year by “a few points.
It’s encouraging that Zscaler in FQ3 saw significant deal wins across its various emerging products—including ZDX , Zscaler for Workloads, AI Cloud solutions and Zero Trust for Branch. These newer offerings contributed nearly 25% of all new and upsell business in the quarter. In an 8-figure ACV deal that included multiple emerging products, a Fortune 500 tech customer upped its total ARR by over 5x to more than $10 million.
Zscaler Stock Cybersecurity Cybersecurity Software Software Zero Trust Network Security Data Protection
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