Slide 1: Fiscal Q3 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 Q3'24 Results
Fiscal Q3’24 Results Q3 Guidance Q3 Results $534M - $536M $553M Revenue 28% y/y 32% Y/Y REVENUE BY GEOGRAPHY i Calculated Billings $628M Based on Americas 30% y/y Q3'24 Revenue EMEA Calculated Current $613M Billings 29% y/y Gross Profit 80% margin 81.4% margin Operating Profit $98M - $100M eM - 116%
Slide 4: Attackers have no inertia
Attackers have no inertia 91% of organizations expressed concern about VPNs compromising their IT environment! 53% of organizations breached via VPN say that threat actors moved laterally’ YoY increase in global phishing attempts? 56% of organizations experienced one or more VPN-related attacks in t
Slide 5: Innovation highlights
Innovation highlights OUR PLATFORM EXPANSION IS ACCELERATING ACROSS MULTIPLE PILLARS Al Co-Pilot for Zscaler Data Security Posture GenAl App Securit Digital Experience (ZDX) Management (DSPM) PP Y Industry-first Al-powered co-pilot Discover, classify, and protect Provide deep visibility and granular
Slide 6: Announced this quarter: AI Copilot for ZDX
Announced this quarter: Al Copilot for ZDX What does DNS mean? Show me 50 users with the poorest user % Copiiot ‘Show me all users rom Texas Here's the high level overview for Texas users Knowledge experience in California bead = 295th percentle of page mer 210 > Umfhle Insights Page loding metrics
Slide 7: 400B+ daily transactions, 150+ third party integrations
400B+ daily transactions + 150+ third party integrations Risk360 Business Insights Unified Vulnerability Management …and more © 2024
Slide 8: Announced this quarter: GenAI App Security
Announced this quarter: GenAl App Security Employee [1] c= %) Visibility into 1000s Internal source code of Al services “Take my code and optimize it” _ Policy control by Y%) user groups for all employees Zero Trust Exchange Confidential content creation —_—=—=—=—=—=—=—=—=> (5) “Make my acquisition
Slide 9: Zero Trust Network Segmentation: Kill Switch enforces policies
1 The network is hidden from 2 the internet, eliminating the attack surface Our plug-and-play device discovers and maps all devices on the network, giving full visibility and insights from a central 3 dashboard “Kill Switch” enforces polices dynamically (e.g., based on Switch threat level) IOT 4 Ser
Slide 10: Secure IaaS/PaaS Data
Secure IaaS/PaaS Data Service & Data Discovery Data stores like S3, VMs, Containers, RDS, Mongo DB Posture Discovery Misconfigurations, excessive permissions, vulnerabilities Actionable Insights Correlate and prioritize risk. Auto-remediation © 2024
Slide 11: Quarterly trend charts Q4'22 to Q3'24
523 497 2,922 468 2,820 449 2,708 2,609 400 2,432 2,337 378 2,217 348 2,089 327 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 © 2024
Slide 12: Margin comparison Q3'23 vs Q3'24
22.3% 80.2% 81.4% 22.0% 17.6% 15.3% Q3'23 Q3'24 Q3'23 Q3'24 Q3'23 Q3'24 © 2024
Slide 13: Select Q3'24 Deal Highlights
Select Q3’24 Deal Highlights SUCCESS IN SELLING THE BROADER PLATFORM Global 100 Financial Services Upsell, 7-figure ACV ZIA >64,000 users >64,000 users >64,000 users >64,000 users Why Zscaler * Consolidating multiple security point products, including Secure Web Gateway, VPN, and VDI + Worked closel
Slide 14: Additional deal highlights across verticals
Large APJ Based Financial Services Fortune 500 Technology 7-figure ACV deal for Zscaler for Users First purchase of Zero Trust for and initial purchase of many emerging Workloads and AI Cloud solutions, products (nearly 1/3 of deal value) increasing ARR by 5x to >$10M Largest Workload deal to date M
Slide 15: Fiscal Q4'24 and FY24 guidance
Fiscal Q4’24 Initial FY24 Updated FY24 $565M - $567M $2.050B - $2.065B $2.140B - $2.142B Revenue 24%-25% y/y 27%-28% y/y Approx. 32% y/y $2.52B - $2.56B $2.603B - $2.606B Calculated Billings 24%-26% y/y Approx. 28% y/y Gross Margin 80% $330M - $340M $422M - $424M Operating Profit $107M - $109M Margi
Slide 16: Strong Q3, marching towards our goal of $5B ARR
Strong Q3, marching towards our goal of $5B ARR 4) Strong Q3 performance driven by continued demand for our Zero Trust architecture, as customers are embracing our platform for better cyber and data protection and point product consolidation. t 2) Accelerating our platform expansion with innovations
Slide 17: Financial Appendix
Slide 18: Non-GAAP to GAAP reconciliations shown on the following slides
▪ ▪ ▪ ▪ *Non-GAAP to GAAP reconciliations shown on the following slides. © 2024
Slide 19: Appendix A: Non-GAAP to GAAP Reconciliation
Appendix A: Non-GAAP to GAAP Reconciliation $ IN THOUSANDS Q3 24 Q3 23 YTD Q3'24 YTD Q3'23 Revenue $ 553,201 $ 418,800 $1,574,903 $1,161,946 Non-GAAP Gross Profit and Non-GAAP Gross Margin GAAP gross profit $ 434,870 $ 322,954 $1,227,979 $ 901,796 Add: Stock-based compensation expense and related pa
Slide 20: Appendix A: Non-GAAP to GAAP Reconciliation (cont.)
Appendix A: Non-GAAP to GAAP Reconciliation (cont.) $ IN THOUSANDS Q3 24 Q3 23 YTD Q3'24 YTD Q3'23 Non-GAAP Net Income per Share, Diluted GAAP net income (loss) $ 19124 $ (46,046) $ (42,828) $ (171,661) Stock-based compensation expense and related payroll taxes 121,465 111,386 399,730 331,540 Amorti
Slide 21: Appendix A: Non-GAAP to GAAP Reconciliation (cont.)
Appendix A: Non-GAAP to GAAP Reconciliation (cont.) $ IN THOUSANDS Q3 24 Q3 23 YTD Q3'24 YTD Q3'23 Calculated billings Revenue $ 553,201 $ 418,800 $ 1,574,903 $ 1,161,946 Add: Total deferred revenue, end of period 1,577,014 1/175,3. 4,577,014 1175/37: Less: Total deferred revenue, beginning of perio