Company Overview: Zscaler, Inc.
Zscaler, Inc. (NASDAQ: ZS) is a global leader in cloud-native cybersecurity solutions, offering secure access to applications and data regardless of location. Founded in 2007, Zscaler has pioneered the concept of the Zero Trust Exchange — a security platform designed to replace traditional network security by securely connecting users, devices, and applications through the cloud.
The company’s flagship products include Zscaler Internet Access (ZIA) and Zscaler Private Access (ZPA), which help enterprises protect against cyber threats, eliminate attack surfaces, and enforce zero trust policies. These solutions are critical for organizations embracing digital transformation, remote work, and cloud migration.
Headquartered in San Jose, California, USA, Zscaler serves thousands of enterprise customers, including a significant portion of the Fortune 500. The company operates a large, distributed cloud platform with over 150 data centers globally, ensuring fast and secure access for users around the world.
Zscaler’s business model is primarily subscription-based, offering high recurring revenue and strong customer retention. It continues to invest in AI-powered threat detection, zero trust architecture, and platform expansion to capture the growing demand for cybersecurity in the cloud-first era.
Zscaler is well-positioned to benefit from the secular shift toward cloud computing and zero trust security models. With strong top-line growth, a scalable business model, and increasing global cybersecurity spending, Zscaler represents a compelling growth investment opportunity in the tech sector.
Financial Summary (2022–2024)
Zscaler has shown solid top-line growth over the past three years, with revenue climbing steadily despite continued net losses. The company maintains a high valuation due to its strong positioning in the cloud cybersecurity market. The following table summarizes its key financial indicators.
| Metric | 2022 (Jul 31, 2022) | 2023 (Jul 31, 2023) | 2024 (Jul 31, 2024) |
|---|---|---|---|
| Revenue (Million USD) | 1,090.95 | 1,616.95 | 2,167.77 |
| PER | – | – | 24.79 |
| PBR | 39.52 | 40.59 | – |
| EBITDA (Million USD) | -277.92 | -160.16 | -40.54 |
| EBIT (Million USD) | -327.44 | -227.02 | -121.48 |
| Pre-tax Profit (Million USD) | -383.63 | -182.56 | -29.23 |
| Net Income (Million USD) | -390.28 | -202.34 | -57.71 |
| EPS (USD) | -0.10 | -1.36 | -0.39 |
| ROA (%) | -15.33 | -6.28 | -1.39 |
| ROE (%) | -70.82 | -31.17 | -5.77 |
※ Source: Naver Finance – Zscaler, Inc.
Recent Performance Highlights
- Strong Revenue Momentum: Annual revenue climbed from $1.09 billion in 2022 to $2.17 billion in 2024, showcasing robust enterprise demand for cloud security solutions.
- Narrowing Losses: Although Zscaler remains unprofitable, net losses decreased significantly from $390.3 million in 2022 to $57.7 million in 2024, reflecting improved operating leverage.
- EBITDA Improvement: EBITDA losses reduced dramatically from -$277.9 million to -$40.5 million, indicating better cost efficiency and scaling success.
- ROE Recovery: Return on Equity improved from -70.8% in 2022 to -5.8% in 2024, suggesting a gradual path toward profitability and shareholder value recovery.
- Valuation Normalization: PBR remains high (40.6x in 2023), but falling losses and rising top-line growth have improved investor sentiment, reflected in a PER of 24.8x in 2024.
- Cloud-First Market Leadership: Zscaler strengthened its position as a leading Zero Trust platform provider, serving over 40% of Fortune 500 companies and expanding its global footprint.
Global Competitor Comparison
Zscaler operates in the competitive cybersecurity landscape alongside major global players such as Palo Alto Networks, Fortinet, and CrowdStrike. The following table outlines key metrics comparing Zscaler to its top peers.
| Category | Zscaler | Palo Alto Networks | Fortinet | CrowdStrike |
|---|---|---|---|---|
| Core Focus | Zero Trust Cloud Security | Network & Cloud Security Platforms | Unified Threat Management | Endpoint & Threat Intelligence |
| Recent Revenue (Billion USD) | 2.17 | 7.75 | 5.33 | 3.20 |
| Operating Margin (%) | -5.6 | 18.1 | 21.4 | 12.7 |
| PER (TTM) | 24.8 | 44.6 | 36.2 | 61.3 |
| ROE (%) | -5.8 | 28.9 | 32.5 | 17.4 |
| Strategic Edge | Cloud-native Zero Trust Exchange | Platform consolidation across IT/OT | Efficient hardware-software integration | AI-based breach protection at scale |
※ Source: Company Reports, Statista, SeekingAlpha, Yahoo Finance (as of 2024–2025)
Key Strengths of Zscaler
- Cloud-Native Architecture: Zscaler is built from the ground up for the cloud, enabling scalable, flexible, and secure digital transformations for enterprise clients.
- Zero Trust Leadership: A pioneer in Zero Trust security models, Zscaler is well-aligned with evolving cybersecurity frameworks and regulatory trends.
- High Recurring Revenue: Over 90% of revenue is subscription-based, providing strong visibility and customer retention.
- Global Customer Base: Trusted by over 40% of the Fortune 500, Zscaler has a broad and diversified enterprise footprint.
- Platform Expansion: Ongoing investments in AI, workload protection, and cloud workload segmentation support long-term product growth.
- Security Tailwinds: Rising global cyber threats and hybrid work models create persistent demand for cloud-first security solutions.
Investment Attractiveness of Zscaler
Zscaler represents a high-growth opportunity in the evolving cloud security sector. Its recurring revenue model, innovation leadership, and customer base provide strong fundamentals for long-term growth investors.
| Category | Score | Explanation |
|---|---|---|
| Valuation | 65 | PER remains high but has normalized with narrowing losses and improving fundamentals. |
| Growth | 90 | Revenue has doubled in just two years amid strong market demand and client expansion. |
| Profitability | 60 | Losses persist but EBITDA and net margins have significantly improved. |
| Stability | 75 | Long-term contracts and renewals ensure stable and predictable cash flows. |
| Innovation | 85 | Continuous platform upgrades and AI integrations strengthen competitive edge. |
※ Source: Zscaler IR Reports, Analyst Estimates, and Market Research.
Key Risks of Zscaler
- Profitability Pressure: Despite growth, Zscaler is still not consistently profitable, which may concern value-focused investors.
- Valuation Risk: A historically high P/S and PBR ratio could lead to price volatility during market corrections.
- Intense Competition: Competes with established players like Palo Alto Networks and Fortinet, requiring constant innovation.
- Execution Risk: Rapid scaling and global expansion may lead to integration or service quality challenges.
- Geopolitical and Regulatory Risks: Operating globally means compliance burdens and cross-border data security concerns.
Overall Opinion on the Company
This innovative cybersecurity player is a disruptive force in enterprise security, riding the wave of cloud adoption and zero trust architecture. Its strong product portfolio, growth metrics, and recurring revenue base are compelling for long-term investors.
- Strategic Leadership: A first-mover advantage in zero trust security positions the firm at the center of next-gen security frameworks.
- Resilient Growth Profile: Even amid tech volatility, the company’s sticky business model and long-term contracts reduce downside risk.
- Future-Proof Vision: Investments in AI, secure workloads, and threat detection make it a cloud security innovator to watch.
Conclusion: This high-growth, cloud-native cybersecurity leader offers long-term upside potential. While not without risk, its fundamentals and sector trends make it an attractive investment for forward-looking tech investors.
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※ This content is for informational purposes only. Final investment decisions are solely the responsibility of the investor.
