Zscaler has announced financial results for its third quarter of fiscal year 2025, ended April 30, 2025.
“We delivered outstanding Q3 results as an increasing number of customers adopt our expanding Zero Trust Exchange platform. We enable customers to realize Zero Trust Everywhere while lowering operational cost and complexity,” said Jay Chaudhry, Chairman and CEO of Zscaler. “The proliferation of AI in all aspects of business is increasing the need for our AI security. We empower customers to securely adopt both public GenAI apps and their own private AI apps, and we are increasing our investments in this area.”
Third Quarter Fiscal 2025 Financial Highlights
- Revenue: $678.0 million, an increase of 23% year-over-year.
- Income (loss) from operations: GAAP loss from operations was $25.4 million, or 4% of revenue, compared to $3.0 million, or 1% of revenue, in the third quarter of fiscal 2024. Non-GAAP income from operations was $146.7 million, or 22% of revenue, compared to $121.8 million, or 22% of revenue, in the third quarter of fiscal 2024.
- Net income (loss): GAAP net loss was $4.1 million, compared to GAAP net income of $19.1 million in the third quarter of fiscal 2024. Non-GAAP net income was $136.8 million, compared to $113.0 million in the third quarter of fiscal 2024.
- Net income (loss) per share, diluted: GAAP net loss per share was $0.03, compared to GAAP net income per share of $0.12 in the third quarter of fiscal 2024. Non-GAAP net income per share was $0.84, compared to $0.71 in the third quarter of fiscal 2024.
- Cash flows: Cash provided by operations was $211.1 million, or 31% of revenue, compared to $173.4 million, or 31% of revenue, in the third quarter of fiscal 2024. Free cash flow was $119.5 million, or 18% of revenue, compared to $123.1 million, or 22% of revenue, in the third quarter of fiscal 2024.
- Deferred revenue: $1,985.0 million as of April 30, 2025, an increase of 26% year-over-year.
- Cash, cash equivalents and short-term investments: $3,005.6 million as of April 30, 2025, an increase of $595.9 million from July 31, 2024.
Recent Business Highlights
- Announced the appointment of Kevin Rubin as Chief Financial Officer. Rubin brings over two decades of experience leading finance organizations at high-growth public and private companies.
- Announced the appointment of Raj Judge to the Board of Directors, and as EVP of Corporate Strategy & Ventures. Judge brings over 25 years of experience in the tech legal and venture capital space.
- In May 2025, signed a definitive agreement to acquire Red Canary, a leading managed detection and response (MDR) vendor. By combining Zscaler’s high-volume and high-quality data with Red Canary’s domain expertise in MDR, Zscaler will accelerate its vision to deliver AI-powered security operations.
- Recognized as a Leader in the 2025 Gartner Magic Quadrant™ for Security Service Edge (SSE) for the fourth year in a row.
- Positioned as a Leader in the IDC MarketScape: Worldwide Data Loss Prevention (DLP) 2025 Vendor Assessment, which offers a comprehensive evaluation of nine companies in the competitive DLP space based on detailed analysis of vendor capabilities and performance and market trajectories.
- Introduced Zscaler Asset Exposure Management, a critical foundation of the company’s broader Continuous Threat Exposure Management (CTEM) offerings. Asset Exposure Management provides organizations with a comprehensive and accurate inventory of their assets and their risk.
- Zscaler’s ThreatLabz published several research reports, including the 2025 AI Security Report, the 2025 VPN Risk Report, and the 2025 Phishing Report.
- The 2025 AI Security Report found that enterprises’ usage of AI/ML tools increased by over 3,000% in the past year, reinforcing the need to deploy Zero Trust Everywhere to stay ahead of rapidly evolving cyberthreats.
- The 2025 VPN Risk Report found that 92% of organizations are concerned about ransomware attacks due to VPN vulnerabilities, and 81% of organizations are planning to implement a zero trust everywhere strategy.
- The 2025 Phishing Report found that attackers are using GenAI to launch targeted attacks against high-impact business functions like HR and finance, making a Zero Trust + AI defense strategy mission critical for organizations.
- Announced T-Mobile modernized its infrastructure with Zscaler’s Zero Trust Exchange to provide Zero Trust security to its employees and team members whether they are in the office, at home or on the go.
- Announced the inclusion of Zscaler solutions in the AWS Marketplace for the U.S. Intelligence Community (ICMP), a curated digital catalog from Amazon Web Services (AWS) that makes it easy to discover, purchase, and deploy software packages and applications from vendors that specialize in supporting government customers.
Financial Outlook
For the fourth quarter of fiscal 2025, we expect:
- Revenue of $705 million to $707 million
- Non-GAAP income from operations of $152 million to $154 million
- Non-GAAP net income per share of approximately $0.79 to $0.80, assuming approximately 164 million fully diluted shares outstanding and a non-GAAP tax rate of 23%
For the full year of fiscal 2025, we expect:
- Revenue of approximately $2.659 billion to $2.661 billion
- Calculated billings of $3.184 billion to $3.189 billion
- Non-GAAP income from operations of $573 million to $575 million
- Non-GAAP net income per share of $3.18 to $3.19, assuming approximately 163 million fully diluted shares outstanding and a non-GAAP tax rate of 23%