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Cloud Security Co.'s FY22 Revenue Rises 62%
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Shares of Zscaler Inc. traded 22% higher after the cloud-security platform provider reported Q4/22 financial results that included a 61% YoY increase in total revenue. The company's Zero Trust Exchange platform utilizes what the firm claims is "the largest security cloud on the planet" to make doing business easier, faster, and more productive.

After U.S. markets closed for trading yesterday, cloud-based cyber security company Zscaler Inc. (ZS:NASDAQ), announced financial results for Q4/22 and FY/22 ended July 31, 2022.

The company reported that total revenue during Q4/22 increased by 61% to $318.1 million, compared to $197.1 in Q4/21.




Zscaler's Chairman and CEO Jay Chaudhry led off the report by commenting, "We delivered outstanding results for the fourth quarter with 61% revenue growth and 57% billings growth year over year, while driving operational efficiency across the company and delivering on Rule of 80 for the quarter and for the full year … Our customers are realizing immense value from the new, innovative services and advanced capabilities being integrated into our Zero Trust security platform."

"Despite the uncertain macroeconomic landscape which continues to evolve, we continue to see favorable demand for our Zero Trust Exchange platform because it makes businesses more secure, simplifies IT, and reduces cost," Chaudhry added.

The company reported that total revenue during Q4/22 increased by 61% to $318.1 million, compared to $197.1 in Q4/21.

The firm listed that in Q4/22, it registered a GAAP loss from operations of $82.5 million versus a GAAP loss from operations of $67.4 million in Q4/21. Zscaler noted that non-GAAP income from operations in Q4/22 improved to $38.1 million, up from $20.6 million in Q4/21.

The company advised that during Q4/22, it posted a GAAP net loss of $97.7 million, or $0.69 per share, compared to a GAAP net loss of $81.0 million, or $0.59 per share in Q4/21. The firm stated that on a non-GAAP basis, it had a net income per share of $0.25 in Q4/22, which was up from $0.14 per share in Q4/21.

Zscaler mentioned that as of the end of Q4/22, it had $1,021.1 million of total deferred revenue, which represented a 62% increase over the $630.6 million level at the end of Q4/21.

The company stated that for FY/22, total revenue rose by 62% to $1,090.9 million, compared to $673.1 million in FY/21.

The firm reported that for FY/22, it recorded a GAAP net loss of $390.3 million, or $2.77 per share, versus a GAAP net loss of $262.0 million, or $1.93 per share in FY/21.

The company discussed several highlights from its operations and noted that it recently announced its Posture Control™ solution. The firm explained that this integrated product application is engineered for the purpose of giving organizations "a unified Cloud-Native Application Protection Platform (CNAPP) functionality tailor-made to secure cloud workloads, which enables DevOps and security teams to efficiently prioritize and remediate risks in cloud-native applications earlier in the development lifecycle."

The firm stated that it also released some product innovations such as CNAPP and Zero Trust for Workloads that were built on Zscaler's and Amazon Web Services' platform and additionally launched advanced artificial intelligence and machine learning innovations to protect users and monitor and improve the digital experience.

The company advised that, as it previously announced, it is working with Siemens on an all-in-one solution to accelerate secure digitalization for OT environments.

The company offered some forward guidance and stated that for Q1/23, it expects that total revenue will be in the range of $339 million to $341 million. The firm indicated that for Q1/23, it estimates that it will earn non-GAAP income from operations of $37-$38 million, or approximately $0.26 per share, based upon a projected total of around 155 million common shares outstanding.

Zscaler advised that for FY/23, it expects total revenue of $1.49-1.50 billion with calculated billings of $1.92-1.94 billion. The company estimates that for FY/23, it will post non-GAAP income from operations of $173-176 million, or approximately $1.16-1.18 per share, based upon a total of about 157 million common shares outstanding.

Zscaler is a cloud-based network security company based in San Jose, Calif. The firm helps its clients accelerate their digital transformation efforts allowing them to become more efficient and secure. The company's SSE-based Zero Trust Exchange securely connects users, devices, and applications and distributes data across over 150 data centers globally making it "the world's largest in-line cloud security platform."

Zscaler started the day with a market cap of around $21.88 billion, with approximately 141.86 million shares outstanding and a short interest of about 4.5%. ZS shares opened 13% higher today at $174.95 (+$20.70, +13.42%) over yesterday's $154.25 closing price. The stock traded today between $173.09 and $188.79 per share and closed for trading at $188.00 (+$33.75, +21.88%).

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