Zscaler (ZS) Earnings: Complete Live Coverage Today

Zscaler (ZS) posted strong fiscal Q2 2025 results, with revenue climbing 23% year-over-year to $678.0 million, driven by robust demand for its Zero Trust Exchange platform. The company reported non-GAAP earnings per share of $0.84, beating its prior year figure of $0.71 and surpassing consensus expectations. Calculated billings rose 25% to $784.5 million, a key forward-looking metric that signals continued customer expansion and momentum.

Non-GAAP operating income came in at $146.7 million, maintaining a 22% margin, while GAAP results reflected continued investment mode: the company posted a GAAP operating loss of $25.4 million and a GAAP net loss of $4.1 million. Free cash flow was $119.5 million, or 18% of revenue, slightly down from 22% a year earlier, but still solid.

Management emphasized rapid adoption of AI and Zero Trust architectures as enterprise security needs shift. CEO Jay Chaudhry noted that “the proliferation of AI in all aspects of business is increasing the need for our AI security” and that customers are looking to Zscaler to enable secure usage of both public GenAI tools and private AI apps.

The company’s acquisition of Red Canary, a managed detection and response firm, was highlighted as a move to boost AI-powered security operations. In addition, Zscaler was once again named a Leader in Gartner’s 2025 Magic Quadrant for Security Service Edge, reinforcing its competitive edge.

Zscaler also raised its full-year revenue guidance to $2.659–$2.661 billion and expects Q4 revenue between $705–$707 million. The company guided Q4 EPS to $0.79–$0.80, continuing its strong beat-and-raise cadence.

With earnings being released when the market closes, ZS is down 1.10% on the day. Consensus EPS estimate is $0.69.

1. Federal Pipeline Conversion

   • Zscaler’s recent earnings highlighted strong momentum in U.S. federal contracts. Execution and expansion here are central to sustaining top-line growth at current rates.

2. Operating Leverage vs. Growth Investment

   • The company has been able to deliver margin expansion while growing rapidly. Any shift in R&D or GTM spend ratios could affect that dynamic and signal changes in efficiency.

3. Large Deal Quality and Duration

   • With increasing average contract values, investors will want clarity on how much of the growth is sticky, multi-year revenue versus short-term uplift from one-off deals.

Zscaler stock is up 25% year-to-date and +18% in May alone, reflecting bullish sentiment on zero-trust architecture and large federal wins. At its current price near $205, the stock is approaching its previous highs and appears technically extended heading into earnings.

Valuation is elevated: the stock trades at ~13x forward sales and a P/E above 80x, placing ZS in the high-growth, high-expectation category. Bulls argue that revenue retention, operating leverage, and federal wins justify the premium — but any shortfall or margin compression could lead to swift downside given how much is already priced in.

Zscaler’s recent commentary focused on success with federal accounts and growing contract sizes in large enterprise segments. However, the company also flagged FX headwinds and some softness in EMEA as watchpoints. Guidance was bullish, but implied that execution across regions and verticals would need to remain near flawless to support growth at scale.

One forward risk: if federal contracts see any delay or slippage — either from procurement bottlenecks or broader political budget debates — it could show up in deferred revenue or NRR. Given that much of the bullish thesis is priced in, anything less than clean performance on this front could compress the multiple quickly.

Zscaler has beaten EPS estimates for 10 consecutive quarters, and with investor sentiment running hot, the expectation bar is high.

• Current Quarter (FQ3 2025)

  • EPS Estimate: $0.6

  • Revenue Estimate: $635M

• Previous Quarter (FQ2 2025)

  • EPS Actual: $0.60

  • EPS Surprise: +$0.06

  • Revenue: $525M

• Full-Year Outlook (FY2025)

  • EPS Estimate: $2.68

  • Revenue Estimate: $2.20B