Slide 1: Fiscal Q1 2024 Earnings Call
Slide 2: Safe Harbor
Safe Harbor FORWARD-LOOKING STATEMENTS Unless otherwise noted, all numbers presented will be on an adjusted, non-GAAP basis. Reconciliation of GAAP to non-GAAP financial measures is in the appendix of this presentation. This presentation has been prepared by Zscaler, Inc. (“Zscaler”) for information
Slide 3: Fiscal Q1'24 Results
Fiscal Q1’24 Results REVENUE BY GEOGRAPHY Based on Americas Q1'24 Revenue EMEA 120% Dollar-based net retention rate High 90% Gross retention rate Q1 Guidance Q1 Results $472M - $474M $497M Revenue Approx. 33% y/y 40% y/y Calculated Billings Approx. 30% y/y $457M 34% y/y Calculated Current $460M Bill
Slide 4: Leading growth and profitability, beyond $2B ARR
Leading growth and profitability, beyond $2B ARR Qi Q2 Q3 Q4 Qi Q2 Q3 Q4 Qi Q2 Q3 Q4 Qi 2021 2022 2023 2024 SaaS companies aspire to achieve Rule-of-40 Rule-of-40 Revenue Growth Y/Y + Free Cash Flow Margin Rule-of-80 In@i (©2028 Zscaler, nc. Al rights reserved. 4
Slide 5: Three factors that drove our Q1 performance
Three factors that drove our Q1 performance CUSTOMERS ARE EMBRACING OUR PLATFORM VISION OF ZERO TRUST SECURITY New Logo Multi-Pillar Record New Wins Platform Purchases ACV in Fed 14 Nearly 50% >90% New logo >$1M ARR deals Of new logo customers New ACV Y/Y in Spanned across many verticals purchased Z
Slide 6: Why enterprises are selecting Zscaler over legacy solutions
Why enterprises are selecting Zscaler over legacy solutions Network & Firewall- centric Architectures Expands the attack surface Minimizes the attack surface Aa) @zscaler’ Experience your world, secured? Struggles to inspect Allows lateral Allows encrypted traffic threat movement data exfiltration E
Slide 7: Select Q1'24 Deal Highlights
Select Q1’24 Deal Highlights Fa) IU [—s} Fed Cabinet-Level Agency Upsell from initial deployment ZIA 100,000 users 100,000 users ZDX 100,000 users Why Zscaler + Standardizing on Zscaler to meet President's Executive Order to adopt Zero Trust security + Expanded from 25K users to 100K users, while cr
Slide 8: Large customer momentum
Large customer momentum $1M+ ARR Customers $100K+ ARR Customers 2,708| 2,337 2,217 2,089 1,891 4,751 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 +: Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 (©2028 Zscaler, Inc. Allrightsreserved. 8
Slide 9: Improving operating efficiency
Improving operating efficiency Gross Margin Operating Margin Free Cash Flow Margin _ 622 bps 18.1% Q1'23 Q1'24 Q1'23 Q1'24 Q1'23 Q1'24 Key factors Key factors Key factors Scale of our purpose-built, multi-tenant cloud Leverage in our financial model, including 60%+ contribution Strong collections fr
Slide 10: Enterprises are rushing to Gen AI
Enterprises are rushing to Gen Al, SURVEY OF >900 IT DECISION MAKERS ON GEN Al 95% of organizations are using Gen AI tools... —— 38% 0, are approaching 57% Gen Al use with allow Gen Al caution use without restriction \— 5% are holding back adoption or have blocked Gen Al entirely Zscaler research “A
Slide 11: Zscaler secures Gen AI traffic
Zscaler secures Gen AI traffic LIKE THE EARLY DAYS OF SAAS ADOPTION, GEN Al IS A TAILWIND >2B Al transactions secured per month on average 20% ASP uplift of premium bundles with Al-driven features Data Protection Secure unstructured data with automated classification Cyber Protection Faster time to
Slide 12: Our platform architecture creates a unique AI opportunity
Our platform architecture creates a unique Al opportunity C2) e e 500T+ daily signals Al-Powered Inline Proxy Architecture Driving Customer Value The world’s largest security cloud Sitting in the natural path of traffic Monetize directly through separate SKUs between all users, apps, and devices and
Slide 13: Risk360: Generating strong customer interest
Risk360: Generating strong customer interest AI-POWERED HOLISTIC RISK QUANTIFICATION AND MITIGATION After recent launch: 1 OO+ enterprises in active evaluation Dashboard ‘Organization Risk Score $ Risk Score Tieng : | — 1 O+ deals closed ° ° 1 DataLoss © 93 ° 6-fig UF average ACV in early-stage deal
Slide 14: >1/3 of our customers have made initial purchases for workload protection
>1/3 of our customers have made initial purchases for workload protection Workload Communication often starts with small land deals With customers already securing user-to-app with our platform, natural for them to extend it to secure their workloads GovCloud FedRAMP China Region © 2023
Slide 15: Fiscal Q2'24 and FY24 guidance
Initial Updated Fiscal Q2’24 Fiscal FY24 Fiscal FY24 $505M - $507M $2.05B - $2.065B $2.09B - $2.10B Revenue 30%-31% y/y 27%-28% y/y 29%-30% y/y $2.52B - $2.56B $2.52B - $2.56B Calculated Billings 24%-26% y/y 24%-26% y/y Gross Margin 80% $330M - $340M $360M - $365M Operating Profit $84M - $86M Margin
Slide 16: Financial Appendix
Slide 17: Non-GAAP to GAAP reconciliations shown on the following slides
▪ ▪ ▪ ▪ *Non-GAAP to GAAP reconciliations shown on the following slides. © 2023
Slide 18: Appendix A: Non-GAAP to GAAP Reconciliation
Appendix A: Non-GAAP to GAAP Reconciliation $ IN THOUSANDS Q1 23 Q124 Revenue $ 355,548 $ 496,703 Non-GAAP Gross Profit and Non-GAAP Gross Margin GAAP Gross Profit $ 278,851 $ 385,309 Add: Stock-based compensation expense and related payroll taxes 8,661 12,955 Add: Amortization expense of acquired i
Slide 19: Appendix A: Non-GAAP to GAAP Reconciliation (cont.)
Appendix A: Non-GAAP to GAAP Reconciliation (cont.) $ IN THOUSANDS Q1 23 Q124 Non-GAAP Net Income per Share, Diluted GAAP net loss $ (68,162) $ (33,483) Stock-based compensation expense and related payroll taxes 108,636 132,729 Amortization expense of acquired intangible assets 2,552 3,036 Amortizat
Slide 20: Appendix A: Non-GAAP to GAAP Reconciliation (cont.)
Appendix A: Non-GAAP to GAAP Reconciliation (cont.) $ IN THOUSANDS Q1 23 Q124 Calculated Billings Revenue $ 355,548 $ 496,703 Add: Total deferred revenue, end of period 41,005,713 1,399,544 Less: Total deferred revenue, beginning of period (1,021,123) (1,439,676) Calculated Billings $ 340,138 $ 456,