The company has consistently outperformed consensus EPS estimates for the last four quarters, with a notable earnings surprise of 27.54% this quarter.

Zscaler reported strong fourth-quarter results for fiscal year 2024, achieving a 30% year-over-year revenue increase to $593 million and an adjusted earnings per share (EPS) of $0.88, surpassing analyst estimates of $0.70.

However, Zscaler's stock is currently trading at 66 times the 2024 forecast EPS, which has led to caution among investors, especially with shares down approximately 9.7% year-to-date.

The earnings call on September 3, 2024, highlighted Zscaler's strong performance and future outlook, setting the stage for continued investor interest.

Despite the positive earnings report, the company's guidance for the first quarter of fiscal 2025 includes revenue expectations of $604 million to $606 million, slightly above consensus, but an adjusted EPS forecast of $0.62 to $0.63 falls short of the anticipated $0.73.

Zscaler also reported a 27% growth in billings, totaling $911 million, and achieved a record free cash flow margin of 27% with cash flow from operations reaching $203.6 million.

The company continues to strengthen its position in the cybersecurity market, particularly with its Zero Trust Exchange platform, which has seen customer adoption grow to 47 million users across nearly 8,700 customers.

The increasing demand for Zero Trust security platforms and the integration of artificial intelligence (AI) are driving Zscaler's growth, with new applications like Risk360 and Unified Vulnerability Management enhancing its offerings.

Zscaler has successfully secured new contracts with major clients, including a Fortune 500 machinery company and a healthcare provider, which underscores the strong demand for its services.

The company's deferred revenue increased by 32% year-over-year to $1.895 billion, indicating positive future growth prospects.

Despite challenges in the macroeconomic environment affecting billings in the first half of fiscal years 2023 and 2024, Zscaler's net revenue retention rate remains robust at 115%.

Looking ahead, Zscaler aims to reach $5 billion in annual recurring revenue (ARR), more than double its current size, as part of its growth strategy.