Slide 1: Fiscal Q4 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 Q4'24 Results
Fiscal Q4’24 Results Q4 Guidance $565M - $567M 24%-25% y/y Revenue Calculated Billings Calculated Current Billings Gross Margin 80% Operating Profit $107M - $109M EPS $0.69 - $0.70 Free Cash Flow All numbers presented on an adjusted, n VAP basis. See appendix of this pres: @5zscaler Experience your
Slide 4: Fiscal Year 2024 Results
Fiscal Year 2024 Results Initial FY24 Guidance FY24 Results ves Into a dance Revenue $2.05B - $2.065B $2.17B (vy) Exceeded 27%-28% y/y 34% y/y Calculated Billings $2.52 - $2.568 $2.628 @ Exceeded 24%-26% y/y 29% y/y Operating Profit $330M - $340M $442M iy) Exceeded 15.9%-16.4% margin 20.4% margin EP
Slide 5: Customer adoption of Zscaler platform is stronger than ever
Customer adoption of Zscaler platform is stronger than ever $1B+ Record 47M Record bookings in Q4 New and Upsell Users on our Platform driven by accelerating Business in Q4 across over 8,650 customers new and upsell business @zscaler’ Experience your world, secured:
Slide 6: Cyber threats continue to increase in frequency and sophistication
Cyber threats continue to increase in frequency and sophistication “| The limitations of firewall and VPN based architectures are being cM) _ exploited by threat actors ne Increasing high profile breaches and volume of sophisticated attacks Rising adoption of GenAl is exposing new gaps in organizati
Slide 7: Ransomware attacks continue to accelerate
Ransomware attacks continue to accelerate 144.. More ransomware payloads 57: More ransomware victims on data leak 4 8., sites than last year (o} YoY increase in ransomweare attacks Source: Zscaler Threatlabz Ransomware Report (April 2023-April 2024) @zscaler Experience your world, secured?
Slide 8: At the early stages of capturing our large market opportunity
At the early stages of capturing our large market opportunity $96B Serviceable Addressable Market Zero Trust for Users Zero Trust for Branch and Cloud Data Protection Al-Analytics Solutions
Slide 9: Our cloud effect continues to widen
Our continues to widen Over half a trillion Transactions processed daily in our cloud
Slide 10: Powerful cloud effect of better cyber protection
Powerful cloud effect of better cyber protection 500B+ 60+ Zscaler 9B+ 250K+ scale Daily security / Daily Threat intel Platform olicy violations Daily cloud transactions partners P prevente d updates More Data + More Customers Deeper Insights @zscaler Experience your world, secured: (©2024 Zscaer, n
Slide 11: AI-Analytics creating new avenues of growth for us
Al=-Analytics creating new avenues of growth for us New Al-Analytics Solutions... ...contributing to New and Upsell Growth Unified Vulnerability Management Q4 growth contribution Risk360 Business Insights FY24 growth contribution* (* = partial year contribution as products «and more launched during
Slide 12: Operating profit and free cash flow history
$442M $585M $241M $334M $231M $112M $144M $78M $28M $38M FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 © 2024
Slide 13: Rule-of-60 for the 4th consecutive year
Rule-of-60 for the Ath consecutive year 34% 4 27% = 61% Revenue Free Cash Rule-of-60 Growth Y/Y Flow Margin For FY24 SaaS companies aspire to achieve Rule-of-40 numbers presented on an adjusted, non-GAAP basis. See appendix of this presentation for a reconciliation of GAAP to non-GAAP financial meas
Slide 14: Quarterly customer and revenue trends
567 523 3,100 497 2,922 468 2,820 449 2,708 2,609 400 2,432 2,337 378 2,217 348 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 © 2024
Slide 15: Gross margin, operating margin and free cash flow margin
27.0% 80.6% 81.0% 80% Approx. 23.5-24% 20.4% 20.5% 20.6% 14.9% FY'23 FY'24 Q1'25 Guidance FY'23 FY'24 FY25 Guidance FY'23 FY'24 FY25 Guidance © 2024
Slide 16: Select Q4'24 Deal Highlights
Select Q4’24 Deal Highlights SUCCESS IN SELLING THE BROADER PLATFORM Top 10 Industry Machinery* New logo, 7-figure ACV deal 100,000 users 100,000 users 100,000 users 100,000 users Why Zscaler + Previously purchased a firewall— based SASE solution to consolidate firewalls, secure web gateways, and MP
Slide 17: Emerging Products % of New Business
Mid-20s Emerging Products* % of New Business 22% 18% 14% High Single Digits Low Single Digits FY'20 FY'21 FY'22 FY'23 FY'24 FY'25E © 2024
Slide 18: Fortune 500 Financial Services and Pharmaceutical deals
Fortune 500 Financial Services Top 10 Pharmaceutical Company* Upsell, 7-figure ACV deal Upsell, 7-figure ACV deal • Zero Trust for Workloads contributed • Protecting over 30 manufacturing sites, approx. 1/3 of ACV of this 7-figure ACV deal, eliminating the need for firewalls. which doubled spend of
Slide 19: Making significant progress in transforming our go-to-market engine
@zscaler Making significant progress in transforming our go-to-market engine Strong hiring quarter and lower-than- expected attrition Sales productivity was better-than- expected, driven by acceleration in new and upsell business Hired leaders experienced in building GSI programs in large enterprise
Slide 20: New, Upsell and Renewal Billings
Contracted, Non- Contracted, Non- New, Upsell and Cancellable Cancellable Renewal Billings Billings Billings © 2024
Slide 21: New and Upsell Billings, Renewal Billings definitions
Billings from new and upsell New and Upsell Billings deals closed in the quarter Billings from renewal deals Renewal Billings closed in the quarter Contracted, Non- Scheduled billings from active Cancellable Billings contracts from prior periods © 2024
Slide 22: Q1'25 and FY25 Guidance
Q1’25 Guidance FY24 Results FY25 Guidance $604M - $606M $2.17B $2.60B - $2.62B Revenue Approx. 22% y/y 34% y/y 20%-21% y/y $2.62B $3.11B - $3.135B Calculated Billings 29% y/y 19%-20% y/y Gross Margin 80% 81.0% $114M - $116M $442M $530M - $540M Operating Profit 18.8%-19.2% margin 20.4% margin 20.2%-2
Slide 23: Strong Q4, well positioned for Fiscal 2025
Strong Q4, well positioned for Fiscal 2025 4) Customer adoption of our Zero Trust platform is stronger than ever, driving strong Q4, with accelerating new/upsell ACV (2) Our cloud, sitting inline, now processes over half a trillion transactions daily. We are leveraging this to deliver new Al-Analyti
Slide 24: Financial Appendix
Slide 25: Non-GAAP to GAAP reconciliations shown on the following slides
▪ ▪ ▪ ▪ *Non-GAAP to GAAP reconciliations shown on the following slides. © 2024
Slide 26: Appendix A: Non-GAAP to GAAP Reconciliation
Appendix A: Non-GAAP to GAAP Reconciliation $ IN THOUSANDS Q4 24 Q4 23 FY 24 FY 23 Revenue $ 592,868 $ 455,006 $ 2,167,771 $ 1,616,952 Non-GAAP Gross Profit and Non-GAAP Gross Margin GAAP Gross Profit $ 462,663 $ 352,324 $ 1,690,642 $ 1,254,120 Add: Stock-based compensation expense and related payro
Slide 27: Appendix A: Non-GAAP to GAAP Reconciliation (cont.)
Appendix A: Non-GAAP to GAAP Reconciliation (cont.) $ IN THOUSANDS Q4 24 Q4 23 FY 24 FY 23 Non-GAAP Net Income per Share, Diluted GAAP net loss $ (14,878) $ (30,674) $ (57,706) $ (202,335) Stock-based compensation expense and related payroll taxes 149,370 126,275 549,100 457,815 Amortization expense
Slide 28: Appendix A: Non-GAAP to GAAP Reconciliation (cont.)
Appendix A: Non-GAAP to GAAP Reconciliation (cont.) $ IN THOUSANDS Q4 24 Q4 23 FY 24 FY 23 Calculated Billings Revenue $ 592,868 $ 455,006 $ 2,167,771 $ 1,616,952 ‘Add: Total deferred revenue, end of period 4,894,974 1,439,676 4,894,974 4,439,676 Less: Total deferred revenue, beginning of period (1,