Zscaler Inc. shows 53% revenue growth in H1, despite net losses - what's next for the cybersecurity company? #investing #cybersecurity
Mar 8th 2023, 9:20 pm
PART 1: Performance Analysis Zscaler, Inc. has reported significant growth in revenue for the six months ended January 31, 2023, amounting to $743.1 million which is a 53% increase compared to the same period in the previous fiscal year. The Company has also expanded their operations to over 6,700 customers across major industries, with users in 185 countries. Government agencies and some of the largest enterprises in the world rely on the company to support their digital transformation, including more than 600 of the Forbes Global 2000 as of July 31, 2022. Despite the period of growth, Zscaler still recorded net losses for the six months ended January 31, 2023, amounting to $125.6 million. This is due to the company continuing to invest in their sales and marketing efforts, research and development, and even as they address any legal matters and related accruals. Moreover, the impact of macroeconomic conditions such as high inflation, potential recessionary environments, and uncertainty regarding the current and future political and economic environment, may impact the future demand for subscriptions of Zscaler's cloud platform. Part 2: Forward-Looking Analysis Zscaler, Inc. is expected to continue with their investment efforts, especially in their sales and marketing organization, research and development, and compliance and other related costs as they operate as a public company. The company also faces uncertainties with the current and future political and economic environment that may impact the demand for their product. Nonetheless, with the increasing dependence on the internet, the adoption of cloud applications and infrastructure, and the shift to mobile-first computing, Zscaler's cloud platform presents a solution to the issues related to cybersecurity that comes with the use of the internet. As the company enable organizations to securely embrace digital transformation, it is expected to increase demand for their cloud platform and broaden their customer base. In addition, Zscaler continues to target new customers across different industries to further expand their operations. Furthermore, the company must remain competitive by investing in their technology, research and development efforts, and partnerships to ensure Zscaler remains a top choice for industries when it comes to cybersecurity solutions.