Zscaler Inc · NASDAQ:ZS
Zscaler — Investor Day (January 2021)
100 slides from Zscaler's investor day presentation, Jan 11, 2021
Slide 1: Zscaler Analyst Day 2021
Zscaler Analyst Day 2021 January 11, 2021
Slide 2: Agenda
Welcome Bill Choi, SVP of Investor Relations & Strategic Finance Vision and Strategy For Zero Trust Exchange Jay Chaudhry, CEO, Chairman and Founder Leading With Innovation and Cloud Scale Dr. Amit Sinha, CTO & President of R&D, Operations, Customer Service Patrick Foxhoven, CIO & EVP, Emerging Tech
Slide 3: Safe Harbor
Safe Harbor Forward-Looking Statements This presentation has been prepared by Zscaler, Inc. (“Zscaler”) for informational purposes only and not for any other purpose. Nothing contained in this presentation is, or should be construed as, a recommendation, promise or representation by the presenter or
Slide 4: Vision and Strategy for Zero Trust Exchange
Vision and Strategy for Zero Trust Exchange Jay Chaudhry, CEO, Chairman and Founder
Slide 5: Key Messages
Key Messages A leader in cloud security enabling new zero-trust architecture to protect the 01 hyperconnected world of users, customers, devices and workloads Big audacious goal to become the strategic business policy and security enforcement 02 platform for 200 million users, 100 million workloads
Slide 6: Leading the World of Zero Trust Cloud Security
Leading the World of Zero Trust Cloud Security Driving customer(1) value... at an unparalleled scale(2) … while delivering growth(3) >4,500 >450 >150 150B 64% 52% Customers G2K customers Data centers Transactions per day Billings growth Revenue growth globally >10x Google YoY YoY $$$ >20 million 76
Slide 7: Our Mission
Securing Any-to-Any Connectivity in Hyperconnected World of Cloud/Mobile Digital Enterprise OUR MISSION Protecting Users and Data, not the Network Zero Trust Architecture Make the cloud a safe place to do business and enjoyable for users. Internet is the new network, it can’t be secured The cloud an
Slide 8: Our Audacious Goal: Securing the Next 200M Users + 100M Workloads
Our Audacious Goal: Securing the Next… 200M Users + 100M Workloads Customers Platform New Markets New Customers Technology Innovation New Geographies New relationships New platform solutions Growing presence in in existing verticals to secure any connectivity: Japan and LatAm Users, Devices & Worklo
Slide 9: Secular Tailwinds Fueling Progress Towards Our Audacious Goal
Secular Tailwinds Fueling Progress Towards Our Audacious Goal 5G Enabling safe edge computing IoT/OT Bring zero-trust to IoT/OT IaaS/ Public Cloud Secure cloud workload, app-to-app communication (Azure / AWS) Work from Anywhere Fast and secure access to applications Direct-to-Cloud Secures local bre
Slide 10: Strategic Objectives | Continue to Win in our Markets
Strategic Objectives | Continue to Win in our Markets Market Technology Operational Attract & Leadership Differentiation Excellence Develop Talent 10 ©2021 Zscaler, Inc. All rights reserved. SECURING YOUR DIGITAL TRANSFORMATION
Slide 11: Market Leadership: Recognized Leader in Security
Market Leadership Recognized Leader in Security Industry Leader in a row Gartner MQ Leader 10 years In Secure Web Gateway SWG solutions include CASB, zero trust network access, FWaaS and remote browser isolation The Only Leader Have you seen a vendor map like this? Zscaler is now the only leader in
Slide 12: Accelerating Digital Transformation Across All Industries
Market Leadership Accelerating Digital Transformation Across All Industries Protection Locations Users Office 365 Across Countries Protected Protected Monthly Traffic 186 30,000 1.3M 2.0 PB All Traffic – All Users – All Locations1 Household & Diversified Conglomerates Personal Care Apparel Insurance
Slide 13: Trying to Adapt Legacy Network and Security for the Cloud
Technology Differentiation Trying to Adapt Legacy Network and Security for the Cloud Design Principles EAST WEST EAST WEST 1) Secure the network to protect apps. Connect your network to Build a perimeter around your network. the public network for SaaS / Internet Access 2) Extend the network to your
Slide 14: A Cloud-native Zero Trust Exchange is Designed for a Cloud-first World
Technology Differentiation A Cloud-native Zero Trust Exchange is Designed for a Cloud-first World Zero Trust Design Principles 1) Secure users and data with a Zero Trust Exchange, you do not secure the network 2) Treat apps as destinations, not network resources (SaaS) 3) Users connect to apps via a
Slide 15: The Right Purpose-Built Architecture Matters
Technology Differentiation The Right Purpose-Built Architecture Matters Internal Combustion Engine Electric Vehicle Combined Market Cap $306B1 Market Cap $692B1 1). Basic market caps of Daimler AG (DAI.DE), Honda (NYSE: HMC), Ford (NYSE: F), General Motors (NYSE: GM), Volkswagen (VOW.DE), and Tesla
Slide 16: Zscaler Innovation: Zero Trust Exchange Platform
Technology Differentiation Zscaler Innovation: Zero Trust Exchange Platform 1 Zscaler Internet Access Zscaler Private Access 2 Secure Internet and SaaS access Secure Private App Access User to Internet User to Private App ZERO TRUST IoT EXCHANGE OT 4 Zscaler Cloud Protection Zscaler Digital Experien
Slide 17: Fine-tuned Process to Drive Strategic Customer Engagement
Go-to-Market Excellence Fine-tuned Process to Drive Strategic Customer Engagement Strategic orientation Metric-based Customer Focus Customer Focus NPS 76 vs. 30 SaaS Average Consultative approach Trust based 17 ©2021 Zscaler, Inc. All rights reserved. SECURING YOUR DIGITAL TRANSFORMATION
Slide 18: 10+ Year Experience Running Multi-tenant Security Cloud at Scale
Operational Excellence 10+ Year Experience Running Multi-tenant Security Cloud at Scale • SLA: 99.999% availability • Cloud effect on security: 200,000 unique security updates per day to Oslo Stockholm Moscow deliver world-class protection. Copenhagen Manchester Amsterdam Warsaw Vancouver Toronto Lo
Slide 19: Shared Values as Foundation for Exceptional Culture and Business
Attract & Develop Talent Shared Values as Foundation for Exceptional Culture and Business Core Values Our commitment to culture creates an environment where a global and diverse workforce can contribute at a very high level Customer Obsession Open Communication to help our customers succeed. We view
Slide 20: Culture is Key Part of Business Strategy and Competitive Advantage
Attract & Develop Talent Culture is Key Part of Business Strategy and Competitive Advantage Customer Centric Diversity & Inclusion Talent Development Ushering in a world of user & data Diverse background, experience, Dedicated team for talent and career centric security that 1) eliminates gaps think
Slide 21: Becoming a Destination for Top Talent
Attract & Develop Talent Becoming a Destination for Top Talent Great Place To Work Glassdoor Employee engagement survey 90% Employees say Zscaler USA Rated one of the best cloud computing 87% overall satisfaction score(3) is a Great Place to Work(1) companies to work for(2) GLASSDOOR Glassdoor Overa
Slide 22: Global Talent Sourcing
Attract & Develop Talent Global Talent Sourcing 8 R&D/Engineering and 15 Sales offices* • Follow the sun model for R&D, customer support and sales operations • Strategically positioned in India for R&D, Finance, and Customer Support • Regional sales offices for strong local presence *San Jose and Ch
Slide 23: Why We Will Win: Well Positioned for Success
• Market moving to Zero-Trust with Digital Transformation • Trusted partner to CXOs of largest global organizations • Strategic position - handling & securing enterprise-wide traffic • Multi-tenant cloud scalability and Cloud effect Why We Will Win • GTM that can consistently sell value and drive la
Slide 24: Q&A
Q&A ©2021 Zscaler, Inc. All rights reserved. SECURING YOUR DIGITAL TRANSFORMATION
Slide 25: Leading with Innovation and Cloud Scale
Leading with Innovation and Cloud Scale Dr. Amit Sinha CTO & President of R&D, Operations, Customer Service
Slide 26: Key Messages
Key Messages 01 Zscaler has built a scalable, global platform with significant barrier to entry Zscaler has an innovation engine and an extensible platform 02 that delivers new functionality at a rapid pace Zscaler platform provides unparalleled security and visibility 03 with vast amounts of data t
Slide 27: Global Footprint Delivers Better Security & User Experience
Scale Creates Barriers to Entry Global Footprint Delivers Better Security & User Experience 150 150B+ 7B+ 200K+ Data Centers Transactions / Day Enforcements / Day Security Updates / Day Oslo Stockholm Moscow Copenhagen Manchester Amsterdam Toronto London Warsaw Brussels Seattle Rouen Frankfurt Chica
Slide 28: Zscaler Daily Transactions on Internet Scale
Scale Creates Barriers to Entry Zscaler Daily Transactions on Internet Scale Zscaler Transactions 150 Google Searches 7 YouTube Views 6.9 Tweets on Twitter 0.7 0 20 40 60 80 100 120 140 160 Daily Volume (Billions) Source: Zscaler Transactions based on December 2020 data, https://www.zscaler.com/thre
Slide 29: Proven Multi-Tenant Architecture Delivers Exponential Capacity
Scale Creates Barriers to Entry Proven Multi-Tenant Architecture Delivers Exponential Capacity Zscaler Cloud Daily Transaction Volume Peak by Month Multi-tenant Architecture 150 Scale with business demand 100 125 Global Fault Tolerance Daily Transaction Volume (Billions) Internet grade, no single pr
Slide 30: Zscaler is Destination Neutral and Built as an Edge Cloud Service
Scale Creates Barriers to Entry Zscaler is Destination Neutral and Built as an Edge Cloud Service Zscaler NGFW on Cloud 150 Compute DCs 20 Compute DCs COMPUTE DESTINATIONS VM ACCESS EDGE Service Peering ~7 Front Doors Per Compute DC USERS & DEVICES ACROSS LOCATIONS DC 30 ©2021 Zscaler, Inc. All righ
Slide 31: Customers Get Global Coverage & Reduced Carbon Footprint
Customers Get Global Coverage & Reduced Carbon Footprint Leveraging Zscaler’s Global Footprint 76% Renewable Energy Used Consistent Policy Enforcement *Actual IT administrator dashboard view. Using Local Zscaler DCs 31 ©2021 Zscaler, Inc. All rights reserved. SECURING YOUR DIGITAL TRANSFORMATION
Slide 32: Proven History of Rapid Innovations & Growth
Innovation Engine and Extensible Platform Proven History of Rapid Innovations & Growth Zscaler Cloud Protection INDUSTRY’S 1ST Multi-Tenant Cloud Browser Security Platform Isolation AI/ML API CASB Inline SSO Mobile Inline Cloud DNS Cloud Zscaler Office365 Partner Zscaler DLP Integration Security CAS
Slide 33: Extensible Platform with IP Barrier to Entry
Innovation Engine and Extensible Platform Extensible Platform with IP Barrier to Entry Comprehensive Platform Deep and Wide in Functionality 10 Extensible Platform for easy functionality increase 8 Rapid development Day one scalability 6 Millions Over 200 patents 4 granted or pending Disruptive inno
Slide 34: Comprehensive Platform to Deliver Zero-Trust Security
Innovation Engine and Extensible Platform Comprehensive Platform to Deliver Zero-Trust Security Zscaler Internet Access (ZIA) Zscaler Private Access (ZPA) Protect against threats and data leakage Protect apps/data; only allow authorized access Threat Prevention Access Control Data Protection Zero-Tr
Slide 35: Zscaler Client Connector Provides A Footprint to Expand
Innovation Engine and Extensible Platform Zscaler Client Connector Provides A Footprint to Expand Single end-point agent for ZIA/ZPA/ZDX Eliminates multiple agents (FW, VPN), simplifies IT Running on over 17 million devices Works seamlessly on Windows, MAC, Linux, iOS, Android Easy Land and Expand J
Slide 36: Zscaler Delivers Unparalleled Security & Visibility
Unparalleled Security and Visibility Zscaler Delivers Unparalleled Security & Visibility National Oilwell Varco (NOV): 35X Reduction in Infected Devices with Zscaler Pre-Zscaler 300 269 250 200 190183 150 135 136 128 100 112 102 104 85 90 84 81 81 76 77 78 70 73 67 68 73 73 69 66 70 67 66 50 66 57 5
Slide 37: AI/ML: Big Data + Domain Expertise + Data Science
Unparalleled Security and Visibility AI/ML: Big Data + Domain Expertise + Data Science Intelligent Threat Automatic Prevention Classification • Smart Quarantine • Dynamic Content Classification • Zero Day Malware • Auto-segment Workload & Apps ML Anomaly Improved User Detection Experience • User and
Slide 38: Platform Delivers Better AI/ML Models with Big Data
Unparalleled Security and Visibility Platform Delivers Better AI/ML Models with Big Data 300 Trillion Points/Day Analyzed for Anomalies 38 ©2021 Zscaler, Inc. All rights reserved. SECURING YOUR DIGITAL TRANSFORMATION
Slide 39: 1U Box to the Power of Z: Efficiency in Processing Cost
Economics of Scale 1U Box to the Power of Z: Efficiency in Processing Cost, Lower Carbon Footprint 12x throughput from 12X Zscaler highly optimized software delivers software optimizations 6X Multi-Instance higher throughput per Intel processor Load Balanced = 6X 3X Multi-Instance Load Balanced Comp
Slide 40: Support Cost Down, NPS Up as the Platform Grows
Economics of Scale Support Cost (COGS) Down, NPS Up as the Platform Grows Quarterly Transactions (Billions) Quarterly Support Tickets / Transactions Support tickets per billion transactions 2.7 support tickets per billion transactions is world-class (high NPS) 40 ©2021 Zscaler, Inc. All rights reser
Slide 41: Key Messages
Key Messages 01 Zscaler has built a scalable, global platform with significant barrier to entry Zscaler has an innovation engine and an extensible platform 02 that delivers new functionality at a rapid pace Zscaler platform provides unparalleled security and visibility 03 with vast amounts of data t
Slide 42: Zscaler Cloud Protection (ZCP)
Zscaler Cloud Protection (ZCP) Taking Zero Trust to the public cloud Patrick Foxhoven CIO & EVP, Emerging Technologies
Slide 43: Extending Zero Trust to Cloud Workloads
Extending Zero Trust to Cloud Workloads ZCP extends our reach into new markets Zero Trust Architecture • Zscaler pioneered Zero Trust in enterprises with ZIA and ZPA focused on North/South traffic flows between the users and application • New! Zscaler Cloud Protection (ZCP) solutions extend zero-tru
Slide 44: Zscaler Cloud Protection: Reduce the Risk of Embracing the Cloud
Zscaler Cloud Protection: Reduce the Risk of Embracing the Cloud Protect multi-cloud workloads 1 Cloud Security Posture Mgt (CSPM) Ensure proper configuration 2 and compliance of workloads 2 Workload Communication Secure workload and app-to-app User to cloud-cloud, cloud-internet and cloud-DC connec
Slide 45: Application Transformation is Accelerating
Application Transformation is Accelerating Google Company owned data center “ 81% of customers have multi-cloud deployments, growing to 98% by end of 2021 45 ©2021 Zscaler, Inc. All rights reserved. SECURING YOUR DIGITAL TRANSFORMATION
Slide 46: The Reality of a Multi-cloud Approach
The Reality of a Multi-cloud Approach Global Conglomerate Architecture To provide employees and partners fast and reliable access, apps need to be close to the user Multi-cloud Multi-cloud 4 Azure regions / 4 AWS regions Multi-regions 2 AZs per region → 16 locations Multi-availability zones (AZ) Dis
Slide 47: Current Approach Is Unmanageably Complex and High Risk
Securing Public Cloud with Legacy Security Current Approach Is Unmanageably Complex and High Risk AWS Availability Zone VPC 1 VPC 2 VPC 3… High management overhead hinders Pair of vNGFWs DevSecOps speed and agility protecting apps in each VPC ”DIY” network, peering and Transit Gateway security leads
Slide 48: For Multi-cloud, Complexity and Risk Grows Multi-fold
Securing Public Cloud with Legacy Security For Multi-cloud, Complexity and Risk Grows Multi-fold AWS Availability Zone VPC 1 VPC 2 VPC 3… Transit Gateway Inbound VPC Management VPC Outbound VPC Bidirectional VPC VPN VPN FW Manager Orchestrator Design Principles 1) Secure the network to protect apps.
Slide 49: Secure and Simple to Manage; Accelerates a Cloud-First Strategy
Securing Public Cloud with Zscaler Zero Trust Exchange Secure and Simple to Manage; Accelerates a Cloud-First Strategy AWS Availability Zone VPC 1 VPC 2 VPC 3… Simple to deploy and manage ZERO TRUST Accelerates the delivery SINGAPORE SF NY EXCHANGE LONDON PARIS FRANKFURT of cloud applications Secure
Slide 50: Secure and Simple For Global, Multi-cloud Deployments
Securing Public Cloud with Zscaler Zero Trust Exchange Secure and Simple For Global, Multi-cloud Deployments Zero Trust Design Principles 1) Secure users and data with a Zero Trust Exchange, DC you do not secure the network 2) Treat apps as destinations, not network resources (SaaS) 3) Users connect
Slide 51: Automating, simplifying and securing workload communications
Automating, simplifying and securing workload communications Simplified, flexible traffic forwarding within Secure cloud to data center and across clouds via Cloud Connector 2 communications (ZPA) Secure cloud to cloud 3 ZIA and ZPA policy engines enforce communications (ZPA) East easy to manage bus
Slide 52: Q&A
Q&A ©2021 Zscaler, Inc. All rights reserved. SECURING YOUR DIGITAL TRANSFORMATION
Slide 53: 5 Minute Break
5 Minute Break ©2021 Zscaler, Inc. All rights reserved. SECURING YOUR DIGITAL TRANSFORMATION
Slide 54: Scaling Go-to-Market and Customer Engagements
Scaling Go-to-Market and Customer Engagements Dali Rajic, President Go-to-Market and CRO
Slide 55: Safe Harbor
Safe Harbor Forward-Looking Statements This presentation has been prepared by Zscaler, Inc. (“Zscaler”) for informational purposes only and not for any other purpose. Nothing contained in this presentation is, or should be construed as, a recommendation, promise or representation by the presenter or
Slide 56: Key Messages
Key Messages World Class GTM model for driving hyper-growth, velocity and increased 01 predictability via formulaic productive capacity model Unique opportunity and solution to sell ‘business transformation’ while reducing 02 ‘long term costs’ and increasing agility Sell value and deliver business o
Slide 57: Differentiation: Driving Value Every Step of the Journey
VALUE EXECUTION Pipeline Gen Executive Identify Transform Briefings Problem & Goals DIFFERENTIATION Partnering at Adopt ZSCALER Driving Value every step of Through Lifecycle Engagement Architectural the journey Transformation Roadmap With Customers Demonstration Data Driven Quarterly Value Value Dri
Slide 58: Zscaler enables us to save costs and reduce threat surface area
“Zscaler enables us to save Enhance Enable M&A agility security posture costs and reduce threat surface area. It scales 2-3x Faster time to value and 35x Fewer infected reduce time to integrate systems machines beautifully…we didn’t need to build out additional infrastructure. It was the obvious sol
Slide 59: Current Hyper-growth Formula for Productivity
Current Hyper-growth Formula for Productivity Productivity Expand Routes to Revenue Pipe or Additional LIFT Built ‘Routes to Revenue’ Conversion (Partners, Renewals, Virtual Briefings, etc.) Historical to help drive velocity and Deal exceed productive capacity. Velocity PRODUCTIVE CAPACITY (VO) – Vi
Slide 60: Customer Phased Journey to Zero-Trust
Customer Phased Journey to Zero-Trust Phase 1 Phase 2 Phase 3 Phase 4 Empower & secure Protect data Enable supply chain Secure IOT and OT workforce in the cloud Secure supplier and B2B customers’ access ZIA, ZPA and ZDX ZCP ZPA and ZB2B ZCP and future products Direct-to-Internet for Accelerating Clo
Slide 61: Upsell Opportunity with Existing Customers
>6x +ZPA for all users +Data >6x Protection +High-end Bundle +ZIA Upsell Opportunity users on ZIA and ZPA alone with existing customers* 1x Adjusted Current ARR*, as Incremental ARR from all Incremental ARR from all Incremental ARR from all Incremental ARR from all Potential ARR with existing of 10/
Slide 62: New Summit Partner Program Increasing Confidence and Opportunity
New Summit Partner Program Increasing QoQ growth in Deal Registrations Confidence and Opportunity Submitted by Partners 30% • Summit Partner Program initiated in Q3’20 to engage & enable Partners. Reward them with corresponding tiered benefits 54% • Requires Partners to participate in quarterly camp
Slide 63: Technical Alliances Creating Leverage For New Logos
Technical Alliances Creating Leverage For New Logos ONLY security vendor in Microsoft’s Networking Partner Program Building new paths to revenue with AWS ISV Partner of the Year, Microsoft Security 20/20 Joint GTM efforts to accelerate and supersize cloud initiatives Broad integration across Office
Slide 64: Scaling with Majors & Large Enterprises, While Expanding To Smaller Enterprises
Scaling with Majors & Large Enterprises, While Expanding To Smaller Enterprises Targeted account-based sale with focus on enterprises WINNING WITH MAJORS & LARGE ENTERPRISES High-touch Majors Zscaler sales led, 40k+ employees SP/SI supported TAM: 1.1k orgs with 171M employees EXPANDING TO ENTERPRISE
Slide 65: Key Takeaways
Key Takeaways World Class GTM model for driving hyper-growth, velocity and increased 01 predictability via formulaic productive capacity model Unique opportunity and solution to sell ‘business transformation’ while reducing 02 ‘long term costs’ and increasing agility Sell value and deliver business
Slide 66: Marketing as a Driver for Growth
Marketing as a Driver for Growth Chris Kozup CMO
Slide 67: Investing in Marketing as a Driver for Growth
Investing in Marketing as a Driver for Growth BRAND DEMAND LOYALTY We are opening more doors We are specializing our We are building on our strong by amplifying our Secure Digital demand generation engines customer relationships to reach Transformation brand promise to focus on segments new CIOs, CT
Slide 68: Opening New Doors with Compelling Brand Promise
Opening New Doors with Compelling Brand Promise Secure Your With the Digital Transformation Zscaler Zero Trust Exchange PAID ORGANIC 86% Y/Y increase in Brand investment1 ThreatLabz security research blogs and proactive PR Targeted advertising and search engine marketing Strong engagement with 40+ G
Slide 69: 10 Years Of Leadership Culminates In Being The Only Leader
10 Years Of Leadership Culminates In Being The Only Leader 2020 Gartner MQ for Secure Web Gateways Secure Web Gateway is the foundation of SASE Most complete vision and highest ability to execute Zscaler Zero Trust Exchange accelerates secure digital transformation 69 ©2021 Zscaler, Inc. All rights
Slide 70: Customer Interest in Zscaler is Outpacing Legacy Providers
Customer Interest in Zscaler is Outpacing Legacy Providers Customer Searches on Gartner.com 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Zscaler Palo Alto FireEye CheckPoint Source: Gartner.com – 2020 Year to date as of December 20th 2020 70 ©2021 Zscaler, Inc. All rights reserved. SECURING
Slide 71: Demand Gen Efficiency Gains with Specialization by Segment
Demand Gen Efficiency Gains with Specialization by Segment Specialization Increases the ROI associated with Marketing Sourced Pipeline Message Secure Digital Transformation Momentum is Accelerating • Increase in new business Tactics Account Based Marketing meetings CXO Programs • Increase in average
Slide 72: Extending Customer Loyalty to Increase Influence
Extending Customer Loyalty to Increase Influence CXO Engagement Impact Results CXO Summits & Networking Increase Upsell G2K CXO Speakers at Zenith Live 2020 Value Creation Reduce Churn Analysis Net Retention Rate Executive Thought Leadership Insights Net Quarterly Business Peer Introductions Promote
Slide 73: Key Takeaways
Key Takeaways The amplification of our brand promise is resonating and helping to get 01 more ‘at bats’ Our demand gen execution is more sophisticated by segment resulting in 02 more productive campaigns Our strong relationships with CXOs is a competitive differentiator and is 03 opening more doors
Slide 74: Q&A
Q&A ©2021 Zscaler, Inc. All rights reserved. SECURING YOUR DIGITAL TRANSFORMATION
Slide 75: Investing for Growth In Large Serviceable Market
Investing for Growth In Large Serviceable Market Remo Canessa, CFO
Slide 76: Key Messages
Key Messages 01 A large market opportunity Proven land and expand model with a high net retention rate 02 based on growing portfolio of platform solutions Subscription revenue model based on price per user and price per 03 workload generating high recurring revenue growth Accelerating our investment
Slide 77: Annual Pricing Model Provides Significant Expansion Opportunities
Annual Pricing Model Provides Significant Expansion Opportunities Transformation Bundle: ~3x Business Bundle: ~1.5x Pro Bundle: 1x $145 User Protection ZIA (2) ZIA Add-ons (3) ZPA ZDX per user(1) $45 +$30 +$45 +$25 Workload Workload $155 Protection CSPM Workload Segmentation per Communication worklo
Slide 78: Serviceable Users of 335M and Serviceable Workloads of 150M
Serviceable Users of 335M and Serviceable Workloads of 150M Users Workloads & OT/IOT devices >600M Potential B2B Users(2) Billions of OT/IoT (3rd party vendors and customers of customers) 338M Incremental 267M Incremental Users(1) (Commercial <2k employers) Workloads(3) 335M Serviceable Users(1) 150
Slide 79: Serviceable Market of $72 Billion, plus Bigger Long-term Opportunity
Serviceable Market of $72 Billion, plus Bigger Long-term Opportunity Commercial Segment, B2B users, Incremental Workload & IoT/OT Opportunities(3) Our $72 billion core serviceable Workload SAM (2) opportunity, comprised of: ($23 B) $155 Price x 150M • $49 billion user SAM focused on enterprises with
Slide 80: Broader Platform Adoption Amongst Our $100k+ ARR customers
Broader Platform Adoption Amongst Our $100k+ ARR customers % of $100k+ ARR customers that purchased the following products1: >$100k ARR customers >$1M ARR customers 40% 42% 35% 27% 16% 1,057 FY17 FY18 FY19 FY20 FQ1'21 973 Count of customers with Transformation 21% 20% 18% 714 12% 5% 511 FY17 FY18 FY
Slide 81: Continued Addition of G2K Customers
Continued Addition of G2K Customers G2K Customers1 Average ARR per G2K Customer / YoY Growth 26% 21% 23% Over 450 $572k Over 400 $467k Over 300 $387k Over 200 $306k FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20 1) For fiscal year ending July 31. Each of our fiscal year G2K metrics are complied and calcula
Slide 82: Land and Expand with Very Strong Upsell Drives Strong NRR
Land and Expand with Very Strong Upsell Drives Strong NRR NRR(1) by Fiscal Years ARR by Cohorts 120% $ Millions FY 20 Cohort FY 19 Cohort 118% FY 18 Cohort 117% FY 17 Cohort FY 16 Cohort FY 15 Cohort 115% 115% FY 14 Cohort FY 13 Cohort FY 12 Cohort FY 11 Cohort FY 10 Cohort FY16 FY17 FY18 FY19 FY20
Slide 83: Key Metrics Tracking Favorably
Key Metrics Tracking Favorably FY18 FY19 FY20 FQ1’21 Billings Growth 65% 51% 64% % Y/Y Growth 41% New vs Upsell % of Net New ACV 40% 60% 51% 49% 46% 48% 52% New 54% Upsell Broader Platform Adoption 10% 14% 29% 27% ZPA as % of Net New ACV ZPA 90% 86% 71% 73% ZIA and others Strong International Presen
Slide 84: Investing for Growth to Capture Large Opportunity
Investing for Growth to Capture Large Opportunity Non-GAAP expenses1 as % of revenue 115% 108% 22% Key factors 100% 20% 92% 93% Scale of our multi-tenant 19% 20% COGS cloud benefits COGS 61% Sales & Accelerated investments 59% for long-term leverage Marketing 48% 49% R&D Global centers in Silicon Va
Slide 85: Medium-term Model (Non-GAAP) in FY24
Medium-term Model (Non-GAAP) in FY24 FY’21 FY’18 FY’19 FY’20 FY24 Targets Guidance Non-GAAP gross 80% 81% 80% 79% 78% – 82% margin (1) S&M (2) 59% 48% 49% 32% – 36% R&D (2) 19% 15% 15% 16% – 18% G&A (2) 11% 9% 9% 8% – 9% Non-GAAP (8%) 8% 7% 9% 20% – 22% operating margin Non-GAAP free 1% 10% 6% 22% -
Slide 86: Key Messages
Key Messages A large market opportunity with an estimated Serviceable Market of $72 billion, 01 with additional future opportunities in smaller enterprises, B2B and OT/IoT device protection Proven land and expand model with a high net retention rate 02 based on growing portfolio of platform solution
Slide 87: 5 Minute Break
5 Minute Break ©2021 Zscaler, Inc. All rights reserved. SECURING YOUR DIGITAL TRANSFORMATION
Slide 88: Q&A
Q&A ©2021 Zscaler, Inc. All rights reserved. SECURING YOUR DIGITAL TRANSFORMATION
Slide 89: Appendix
Appendix ©2021 Zscaler, Inc. All rights reserved. SECURING YOUR DIGITAL TRANSFORMATION
Slide 90: Explanation of Non-GAAP Financial Measures
Explanation of Non-GAAP Financial Measures In addition to our results determined in accordance with generally accepted accounting principles in the United States of America (“GAAP”), we believe that the presentation of non- GAAP financial information provides important supplemental information to ma
Slide 91: Appendix A: Non-GAAP to GAAP reconciliation
Appendix A: Non-GAAP to GAAP reconciliation ($ in thousands) FY'20 Q1 FY'21 Asset Amortization of Asset Amortiztion of Stock-based Amortization of Litigation- Impairment debt discount Income tax Stock-based Amortization of Litigation- Impairment debt discount Income tax comp. acquired intangible rel
Slide 92: Appendix A: Non-GAAP to GAAP reconciliation
Appendix A: Non-GAAP to GAAP reconciliation ($ in thousands) FY'20 Q1 FY'21 Free cash flow $ 27,508 $ 42,227 Revenue 431,269 142,578 Free cash flow margin 6 % 30 % Net cash provided by operating activities $ 79,317 $ 53,532 Less: Purchases of property, equipment and other assets (43,072) (8,904) Les
Slide 93: Speaker Profiles
Speaker Profiles ©2021 Zscaler, Inc. All rights reserved. SECURING YOUR DIGITAL TRANSFORMATION
Slide 94: Jay Chaudhry, CEO, Chairman and Founder
Jay Chaudhry, CEO, Chairman and Founder Jay is an accomplished entrepreneur, having founded a series of successful companies, including AirDefense, CipherTrust, CoreHarbor, SecureIT, and Zscaler, now a public company as of March 16, 2018. Jay has a history of introducing visionary innovations to mar
Slide 95: Amit Sinha, Ph.D, President of R&D, Ops & Customer Service, CTO
Amit Sinha, Ph.D, President of R&D, Ops & Customer Service, CTO Dr. Amit Sinha is a skilled entrepreneur and technology leader who has driven the research and development of disruptive security and wireless technologies at both start-ups and market-leading organizations. Prior to Zscaler, Dr. Sinha
Slide 96: Patrick Foxhoven, CIO & EVP of Emerging Technologies
Patrick Foxhoven, CIO & EVP of Emerging Technologies Patrick Foxhoven is an experienced and innovative managed security entrepreneur and technologist, having spent 20 years building secure and scalable Internet-enabled networks while co-authoring three books on information security and receiving mul
Slide 97: Dali Rajic, President Go-To-Market and Chief Revenue Officer
Dali Rajic, President Go-To-Market and Chief Revenue Officer Dali Rajic is a progressive cloud leader with nearly 25 years of experience in sales leadership and go-to-market operational roles. Mr. Rajic has worldwide responsibility for all aspects related to revenue growth and go-to-market strategy.
Slide 98: Chris Kozup, Chief Marketing Officer
Chris Kozup, Chief Marketing Officer Chris Kozup is a proven marketing executive with 20+ years of experience across all domains of enterprise technology marketing. He has held senior leadership roles at a wide range of successful companies, from multi-billion- dollar organizations to earlier-stage
Slide 99: Remo Canessa, Chief Financial Officer
Remo Canessa, Chief Financial Officer Remo Canessa is a recognized industry leader with more than 30 years of financial management experience in both public and private technology companies, including 15 years as CFO at category-leading security and network infrastructure companies. Mr. Canessa has
Slide 100: Bill Choi, SVP, Investor Relations & Strategic Finance
Bill Choi, SVP, Investor Relations & Strategic Finance Bill is a Strategic Finance and Investor Relations leader with nearly 25 years of finance experience in corporate finance and capital markets roles. Bill is responsible for IR messaging, financial communications, and long- term financial plannin