Zscaler Financials
Financial Health Signals
Based on FY2025 annual data. Scores normalized against common benchmarks. How we calculate these scores
Zscaler has an operating margin of -4.8%, meaning the company retains $-5 of operating profit per $100 of revenue. This below-average margin results in a low score of 0/100, suggesting thin profitability after operating expenses. This is up from -5.6% the prior year.
Zscaler's revenue surged 23.3% year-over-year to $2.7B, reflecting rapid business expansion. This strong growth earns a score of 95/100.
Zscaler has elevated debt relative to equity (D/E of 2.28), meaning the company relies heavily on borrowed funds. This high leverage results in a low score of 27/100, reflecting increased financial risk.
Zscaler's current ratio of 1.82 indicates adequate short-term liquidity, earning a score of 53/100. The company can meet its near-term obligations, though with limited headroom.
Zscaler converts 30.2% of revenue into free cash flow ($808.2M). This strong cash generation earns a score of 100/100.
Zscaler passes 5 of 9 financial strength tests. 3 of 4 profitability signals pass, 2 of 3 leverage/liquidity signals pass, neither operating efficiency signal passes.
For every $1 of reported earnings, Zscaler generates $-23.45 in operating cash flow ($972.5M OCF vs -$41.5M net income). This mixed ratio suggests some earnings may rely on non-cash accounting items.
Zscaler earns $-13.5 in operating income for every $1 of interest expense (-$128.5M vs $9.5M). This narrow margin raises concern about the company's ability to service its debt if operating income declines.
This page shows Zscaler (ZS) financial statements, including the income statement, balance sheet, cash flow statement, and key financial ratios. View 10 years of annual fundamentals and quarterly data, with year-over-year growth rates and compound annual growth rates (CAGR). All figures are derived from SEC filings (10-K and 10-Q reports).
Key Financial Metrics
Zscaler generated $2.7B in revenue in fiscal year 2025. This represents an increase of 23.3% from the prior year.
Zscaler generated $808.2M in free cash flow in fiscal year 2025, representing cash available after capex. This represents an increase of 27.2% from the prior year.
Zscaler reported -$41.5M in net income in fiscal year 2025. This represents an increase of 28.1% from the prior year.
Zscaler earned $-0.27 per diluted share (EPS) in fiscal year 2025. This represents an increase of 30.8% from the prior year.
Zscaler held $1.3B in cash against $0 in long-term debt as of fiscal year 2025.
Zscaler had 158M shares outstanding in fiscal year 2025. This represents an increase of 3.8% from the prior year.
Zscaler's gross margin was 76.9% in fiscal year 2025, indicating the percentage of revenue retained after direct costs. This is down 1.1 percentage points from the prior year.
Zscaler's operating margin was -4.8% in fiscal year 2025, reflecting core business profitability. This is up 0.8 percentage points from the prior year.
Zscaler's net profit margin was -1.6% in fiscal year 2025, showing the share of revenue converted to profit. This is up 1.1 percentage points from the prior year.
Zscaler invested $672.5M in research and development in fiscal year 2025. This represents an increase of 34.5% from the prior year.
Zscaler invested $164.3M in capex in fiscal year 2025, funding long-term assets and infrastructure. This represents an increase of 13.6% from the prior year.
ZS Income Statement
| Metric | Q1'25 | Q3'25 | Q2'25 | Q1'24 | Q2'24 | Q3'24 | Q1'23 | Q2'23 |
|---|---|---|---|---|---|---|---|---|
| Revenue | $788.1M+16.2% | $678.0M+4.7% | $647.9M+3.2% | $628.0M+19.6% | $525.0M-5.1% | $553.2M+11.4% | $496.7M+28.1% | $387.6M |
| Cost of Revenue | $184.8M+18.4% | $156.0M+5.0% | $148.5M+5.0% | $141.5M+20.7% | $117.2M-1.0% | $118.3M+6.2% | $111.4M+27.2% | $87.6M |
| Gross Profit | $603.4M+15.6% | $522.1M+4.5% | $499.4M+2.7% | $486.5M+19.3% | $407.8M-6.2% | $434.9M+12.9% | $385.3M+28.4% | $300.0M |
| R&D Expenses | $200.5M+18.1% | $169.8M-0.6% | $170.9M+10.8% | $154.3M+26.3% | $122.2M-2.2% | $125.0M+10.1% | $113.5M+32.4% | $85.8M |
| SG&A Expenses | $65.7M+4.1% | $63.1M+3.8% | $60.8M+7.0% | $56.8M+4.1% | $54.6M+8.2% | $50.5M-0.5% | $50.7M+16.5% | $43.5M |
| Operating Income | -$36.4M-43.1% | -$25.4M+36.7% | -$40.1M-30.9% | -$30.7M+32.5% | -$45.5M-1408.7% | -$3.0M+93.5% | -$46.1M+29.4% | -$65.2M |
| Interest Expense | $2.1M+58.4% | $1.3M+0.1% | $1.3M+0.1% | $1.3M-62.8% | $3.6M+30.4% | $2.8M-12.5% | $3.2M+137.0% | $1.3M |
| Income Tax | $3.2M-62.7% | $8.7M+198.6% | -$8.8M-215.4% | $7.6M-4.1% | $8.0M+357.2% | $1.7M-80.6% | $9.0M+143.7% | $3.7M |
| Net Income | -$11.6M-181.6% | -$4.1M+46.6% | -$7.7M+35.9% | -$12.1M+57.7% | -$28.5M-248.9% | $19.1M+157.1% | -$33.5M+41.7% | -$57.5M |
| EPS (Diluted) | $-0.07-133.3% | $-0.03+40.0% | $-0.05+37.5% | $-0.08+57.9% | $-0.19-258.3% | $0.12+152.2% | $-0.23+42.5% | $-0.40 |
ZS Balance Sheet
| Metric | Q1'25 | Q3'25 | Q2'25 | Q1'24 | Q2'24 | Q3'24 | Q1'23 | Q2'23 |
|---|---|---|---|---|---|---|---|---|
| Total Assets | $6.5B+21.8% | $5.3B+6.7% | $5.0B+6.3% | $4.7B+0.1% | $4.7B+12.1% | $4.2B+15.5% | $3.6B+0.8% | $3.6B |
| Current Assets | $4.2B+7.4% | $3.9B+6.8% | $3.7B+8.0% | $3.4B-0.1% | $3.4B+14.4% | $3.0B+2.7% | $2.9B0.0% | $2.9B |
| Cash & Equivalents | $1.3B-32.8% | $2.0B+13.2% | $1.8B+13.2% | $1.6B+9.2% | $1.4B+13.0% | $1.3B-7.5% | $1.4B+7.9% | $1.3B |
| Inventory | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| Accounts Receivable | $530.5M-13.9% | $615.8M+19.7% | $514.3M+21.1% | $424.6M-42.4% | $736.5M+45.5% | $506.3M+38.0% | $366.8M-37.0% | $582.6M |
| Goodwill | $994.5M+138.1% | $417.7M0.0% | $417.7M+0.2% | $417.0M0.0% | $417.0M0.0% | $417.0M+351.3% | $92.4M+3.6% | $89.2M |
| Total Liabilities | $4.5B+27.9% | $3.5B+4.0% | $3.4B+3.6% | $3.3B-4.4% | $3.4B+10.5% | $3.1B+9.8% | $2.8B-1.9% | $2.9B |
| Current Liabilities | $2.3B-27.2% | $3.2B+3.9% | $3.0B+2.9% | $3.0B-4.8% | $3.1B+83.0% | $1.7B+15.4% | $1.5B-4.0% | $1.5B |
| Long-Term Debt | N/A | $1.1B+0.1% | $1.1B+0.1% | $1.1B+0.3% | $1.1B+0.4% | $1.1B+0.3% | $1.1B0.0% | $1.1B |
| Total Equity | $2.0B+9.8% | $1.8B+12.3% | $1.6B+12.5% | $1.4B+12.1% | $1.3B+16.6% | $1.1B+35.4% | $807.5M+11.4% | $725.1M |
| Retained Earnings | -$1.2B-2.5% | -$1.2B-0.4% | -$1.2B-0.7% | -$1.2B-1.0% | -$1.1B-1.3% | -$1.1B-0.8% | -$1.1B-3.1% | -$1.1B |
ZS Cash Flow Statement
| Metric | Q1'25 | Q3'25 | Q2'25 | Q1'24 | Q2'24 | Q3'24 | Q1'23 | Q2'23 |
|---|---|---|---|---|---|---|---|---|
| Operating Cash Flow | $448.3M+112.4% | $211.1M+17.6% | $179.4M-45.8% | $331.3M+62.8% | $203.6M+17.4% | $173.4M-33.5% | $260.8M+91.9% | $135.9M |
| Capital Expenditures | $17.3M-76.0% | $72.2M+380.5% | $15.0M-11.8% | $17.0M-65.5% | $49.4M+38.5% | $35.7M+24.4% | $28.7M+5.9% | $27.1M |
| Free Cash Flow | $431.0M+210.2% | $138.9M-15.5% | $164.4M-47.7% | $314.3M+103.9% | $154.2M+11.9% | $137.8M-40.7% | $232.1M+113.2% | $108.9M |
| Investing Cash Flow | -$1.5B-7022.0% | $21.7M+4089.6% | $518K+100.3% | -$201.7M-171.8% | -$74.2M+79.4% | -$360.2M-121.6% | -$162.5M+9.9% | -$180.4M |
| Financing Cash Flow | $3.1M+877.7% | -$399K-101.6% | $24.9M+2698.9% | $890K-97.4% | $34.5M+364.0% | $7.4M+492.3% | $1.3M-96.0% | $31.4M |
| Dividends Paid | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| Share Buybacks | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
ZS Financial Ratios
| Metric | Q1'25 | Q3'25 | Q2'25 | Q1'24 | Q2'24 | Q3'24 | Q1'23 | Q2'23 |
|---|---|---|---|---|---|---|---|---|
| Gross Margin | 76.6%-0.4pp | 77.0%-0.1pp | 77.1%-0.4pp | 77.5%-0.2pp | 77.7%-0.9pp | 78.6%+1.0pp | 77.6%+0.2pp | 77.4% |
| Operating Margin | -4.6%-0.9pp | -3.8%+2.5pp | -6.2%-1.3pp | -4.9%+3.8pp | -8.7%-8.1pp | -0.5%+8.7pp | -9.3%+7.6pp | -16.8% |
| Net Margin | -1.5%-0.9pp | -0.6%+0.6pp | -1.2%+0.7pp | -1.9%+3.5pp | -5.4%-8.9pp | 3.5%+10.2pp | -6.7%+8.1pp | -14.8% |
| Return on Equity | N/A | N/A | N/A | N/A | N/A | 1.8% | N/A | N/A |
| Return on Assets | -0.2%-0.1pp | -0.1%+0.1pp | -0.1%+0.1pp | -0.3%+0.5pp | -0.7%-1.2pp | 0.5%+1.4pp | -0.9%+1.0pp | -1.9% |
| Current Ratio | 1.82+0.6 | 1.24+0.0 | 1.20+0.1 | 1.15+0.1 | 1.09-0.7 | 1.75-0.2 | 1.96+0.1 | 1.88 |
| Debt-to-Equity | 2.28+1.6 | 0.64-0.1 | 0.71-0.1 | 0.80-0.1 | 0.90-0.1 | 1.04-0.4 | 1.40-0.2 | 1.56 |
| FCF Margin | 54.7%+34.2pp | 20.5%-4.9pp | 25.4%-24.7pp | 50.0%+28.9pp | 21.2%-3.7pp | 24.9%-21.8pp | 46.7%+28.5pp | 18.3% |
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Frequently Asked Questions
What is Zscaler's annual revenue?
Zscaler (ZS) reported $2.7B in total revenue for fiscal year 2025. This represents a 23.3% change compared to the previous fiscal year. Revenue measures the total income earned from the company's primary business operations before any expenses are deducted.
How fast is Zscaler's revenue growing?
Zscaler (ZS) revenue grew by 23.3% year-over-year, from $2.2B to $2.7B in fiscal year 2025.
Is Zscaler profitable?
No, Zscaler (ZS) reported a net income of -$41.5M in fiscal year 2025, with a net profit margin of -1.6%.
What is Zscaler's earnings per share (EPS)?
Zscaler (ZS) reported diluted earnings per share of $-0.27 for fiscal year 2025. This represents a 30.8% change compared to the previous fiscal year. EPS represents the portion of a company's net income allocated to each outstanding share of common stock and is widely used to evaluate profitability on a per-share basis.
What is Zscaler's gross margin?
Zscaler (ZS) had a gross margin of 76.9% in fiscal year 2025, indicating the percentage of revenue retained after direct costs of goods sold.
What is Zscaler's operating margin?
Zscaler (ZS) had an operating margin of -4.8% in fiscal year 2025, reflecting the profitability of core business operations before interest and taxes.
What is Zscaler's net profit margin?
Zscaler (ZS) had a net profit margin of -1.6% in fiscal year 2025, representing the share of revenue converted into profit after all expenses.
What is Zscaler's free cash flow?
Zscaler (ZS) generated $808.2M in free cash flow during fiscal year 2025. This represents a 27.2% change compared to the previous fiscal year. Free cash flow represents the cash a company generates after accounting for capital expenditures, and is widely used to assess financial flexibility and shareholder value.
What is Zscaler's operating cash flow?
Zscaler (ZS) generated $972.5M in operating cash flow during fiscal year 2025, representing cash generated from core business activities.
What are Zscaler's total assets?
Zscaler (ZS) had $6.5B in total assets as of fiscal year 2025, including both current and long-term assets.
What are Zscaler's capital expenditures?
Zscaler (ZS) invested $164.3M in capital expenditures during fiscal year 2025, funding long-term assets and infrastructure.
How much does Zscaler spend on research and development?
Zscaler (ZS) invested $672.5M in research and development during fiscal year 2025.
How many shares does Zscaler have outstanding?
Zscaler (ZS) had 158M shares outstanding as of fiscal year 2025.
What is Zscaler's current ratio?
Zscaler (ZS) had a current ratio of 1.82 as of fiscal year 2025, which is generally considered healthy.
What is Zscaler's debt-to-equity ratio?
Zscaler (ZS) had a debt-to-equity ratio of 2.28 as of fiscal year 2025, measuring the company's financial leverage by comparing total debt to shareholder equity.
What is Zscaler's return on assets (ROA)?
Zscaler (ZS) had a return on assets of -0.6% for fiscal year 2025, measuring how efficiently the company uses its assets to generate profit.
What is Zscaler's Piotroski F-Score?
Zscaler (ZS) has a Piotroski F-Score of 5 out of 9, indicating neutral financial health. The F-Score evaluates nine binary signals across profitability (positive ROA, positive cash flow, improving ROA, earnings quality), leverage (decreasing debt, improving liquidity, no share dilution), and operating efficiency (improving gross margin, improving asset turnover). Scores of 7–9 indicate strong and improving fundamentals. Learn more in our complete guide to financial health indicators.
Are Zscaler's earnings high quality?
Zscaler (ZS) has an earnings quality ratio of -23.45x, considered mixed quality. This ratio compares operating cash flow to net income. A ratio above 1.0x means the company generates more cash than its reported earnings, indicating sustainable, cash-backed profits. Ratios below 1.0x suggest earnings rely on accounting accruals rather than actual cash generation. Learn more in our complete guide to financial health indicators.
Can Zscaler cover its interest payments?
Zscaler (ZS) has an interest coverage ratio of -13.5x, meaning it can struggle to cover its interest obligations. This ratio divides operating income by interest expense. Ratios above 5x indicate strong debt-servicing ability, while ratios below 2x suggest the company may face difficulty meeting interest payments if earnings decline. Learn more in our complete guide to financial health indicators.
How financially healthy is Zscaler?
Zscaler (ZS) scores 55 out of 100 on our Financial Profile, indicating moderate overall financial health. This composite score evaluates six dimensions: profitability (operating margin), revenue growth, leverage (debt-to-equity), liquidity (current ratio), cash flow quality (free cash flow margin), and shareholder returns (return on equity). Each dimension is normalized against standard financial benchmarks. Learn more in our complete guide to financial health indicators.