Slide 1: Q4 Fiscal Year 2023 Earnings Call
Q4 Fiscal Year 2023 Earnings Call September 5, 2023 © 2023 Zscaler, Inc. All rights reserved.
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 Q4'23 Results
Fiscal Q4’23 Results Revenue By Region Q4 Guidance Q4 Results APJ 15% of Revenue $69M $429M - $431M $455M Revenue 35%-36% y/y 43% y/y $719M Calculated Billings EMEA $242M 38% y/y 32% of Revenue $144M Americas Calculated Current $677M 53% of Revenue Billings 33% y/y $367M Gross Profit Approx. 80% mar
Slide 4: Fiscal Year 2023 Results
Fiscal Year 2023 Results Initial FY Guidance FY Results $1.49B - $1.50B $1.617B Revenue 37% y/y 48% y/y $1.92B - $1.94B $2.036B Calculated Billings 30%-31% y/y 37% y/y $1.974B Calculated Current Billings 37% y/y $1.304B Gross Profit 80.6% margin $173M - $176M $241M Operating Profit 11.5%-11.8% margi
Slide 5: Multiple new records set during the quarter
Multiple new records set during the quarter $2B+ $2B 320B+ ARR Calculated Billings Daily Transactions Continues to double 2x in 7 quarters FY Fiscal 2023 every 18 months 37% y/y growth 49 18.9% Record $1M+ $1M+ ARR ACV Deals Operating Margin Broad strength Customers Highest margin to date across key
Slide 6: Surpassed $2B ARR… Onwards to $5B ARR
Surpassed $2B ARR… Onwards to $5B ARR Take Zero Trust security everywhere $5B ARR 0" Users Workloads B2B IoT / OT 2x in 7 Build upon our market leading position quarters • Go-to platform for vendor consolidation, cost savings, increased $2B ARR business agility, and better cyber and data loss protec
Slide 7: Large customer momentum
Large customer momentum $1M+ ARR Customers $100K+ ARR Customers 40%+ Fortune 500 Customers 87% 85% 77% 62% 55% 51% 39% 37% 53% 48% 44% 41% 37% 33% 29% 25% 449 2,609 2,432 30%+ 400 2,337 378 2,217 348 2,089 327 1,891 288 1,751 Global 2000 Customers 1,616 251 224 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3
Slide 8: Comments on the business environment
Comments on the business environment Complex macro environment Our strategy to navigate it Cyber attacks rapidly growing and evolving Leveraging our maturity and scale • Cyber is the #1 IT priority • Our proven experience at scale makes us the partner of choice for Zero Trust • Generational shift fr
Slide 9: Improving operating efficiency
Improving operating efficiency Gross Margin Operating Margin Free Cash Flow Margin 80.8% 80.6% 80% 610 bps 16.3%* 21.2% 20.6% 14.9% 20%+ 10.2% FY'22 FY'23 Q1'24 Guidance FY'22 FY'23 FY'24 Guidance FY'22 FY'23 FY'24 Guidance * Represents mid-point of FY24 operating margin guidance of 16.0-16.5% © 202
Slide 10: Select Q4'23 Deal Highlights
Select Q4’23 Deal Highlights Global IT Services in Asia Large Telecom Operator Fortune 50 Insurance Fed Cabinet-Level Agency New logo, purchased all product pillars New logo, led by data protection Upsell, emerging products Multi-year, mid-7-figure ACV task order ZIA 300,000 users ZIA 80,000 users Z
Slide 11: Data Protection: An Emerging Pillar of Growth
Data Protection: An Emerging Pillar of Growth Private Key Components Email Internet Apps Approaching Data Loss Prevention (DLP) IaaS & • Cloud DLP $250M SaaS PaaS • Email DLP • Private App DLP • Endpoint DLP in ARR Cloud Access Security Broker (CASB) Unified Policy Engine • Inline and out-of-band CA
Slide 12: Strong customer adoption of emerging products continues
Strong customer adoption of emerging products continues Emerging Products % of New Business >20% 18% High 14% Single Digits Low Single Digits FY'20 FY'21 FY'22 FY'23 FY'24E * Emerging products contains newer pillars, including: ZDX, Workload Protection and Business Analytics. © 2023 Zscaler, Inc. Al
Slide 13: Breaches continue to drive enterprises to Zero Trust
Breaches continue to drive enterprises to Zero Trust Zscaler 2023 VPN Risk Report – Based on survey of 382 IT professionals and cybersecurity experts Nearly half of enterprises reported that they have been targeted by cyber attackers who were able to exploit a VPN vulnerability, with 33% falling vic
Slide 14: Breaches continue to drive enterprises to Zero Trust
Breaches continue to drive enterprises to Zero Trust Firewall / VPN Zero Trust AWS AWS Policy enforcement across 150+ data centers worldwide Attack Surface Firewalls and VPNs – whether as appliances or VMs – Connects one-to-one, not the connect users to the network network – a core principle of Pass
Slide 15: AI: Strengthening Our Network Effect
AI: Strengthening Our Network Effect Leveraging our unique architecture, big data, and strategic position as the security policy enforcement engine Zscaler’s Advantage: Key Elements for Enterprise AI Available Today Future Roadmap • 320B+ daily transactions, 2x in 18 months, World’s Largest Cyber Pr
Slide 16: Financial Guidance
Financial Guidance Actual Guidance Fiscal Q1 2024 Fiscal Year 2023 Fiscal Year 2024 $472M - $474M $1.617B $2.05B - $2.065B Revenue Approx. 33% y/y 48% y/y 27%-28% y/y $2.036B $2.52B - $2.56B Billings Approx. 30% y/y growth 37% y/y 24%-26% y/y Gross Margins 80% 80.6% $241M $330M - $340M Operating Pro
Slide 17: Financial Appendix
Financial Appendix © 2023 Zscaler, Inc. All rights reserved.
Slide 18: Explanation of Non-GAAP Financial Measures
Explanation of Non-GAAP Financial Measures In addition to our results determined in accordance with generally accepted accounting principles in the United States of America (“GAAP”), we believe that the presentation of non-GAAP financial information provides important supplemental information to man
Slide 19: Appendix A: Non-GAAP to GAAP Reconciliation
Appendix A: Non-GAAP to GAAP Reconciliation ($ in thousands) © 2023 Zscaler, Inc. All rights reserved.
Slide 20: Appendix A: Non-GAAP to GAAP Reconciliation (cont.)
Appendix A: Non-GAAP to GAAP Reconciliation (cont.) ($ in thousands) © 2023 Zscaler, Inc. All rights reserved.
Slide 21: Appendix A: Non-GAAP to GAAP Reconciliation (cont.)
Appendix A: Non-GAAP to GAAP Reconciliation (cont.) ($ in thousands) © 2023 Zscaler, Inc. All rights reserved.
Slide 22: Appendix A: Non-GAAP to GAAP Reconciliation (cont.)
Appendix A: Non-GAAP to GAAP Reconciliation (cont.) ($ in thousands) © 2023 Zscaler, Inc. All rights reserved.