Zscaler (ZS) Q3 2025 earnings summary

Executive summary

• Achieved record Q3 with revenue of $678 million, up 23% year-over-year, and TCV bookings over $1 billion, reflecting strong demand for Zero Trust and AI-driven security solutions.

• Platform secures over 50 million users, processes over 100 trillion transactions annually, and is recognized as a leader in Gartner's Magic Quadrant for 14 years.

• Announced acquisition of Red Canary for $675 million in cash and equity, expected to close in Q1 FY26, to accelerate AI-driven security operations.

• Net loss for Q3 FY25 was $4.1 million, with non-GAAP net income rising to $136.8 million; free cash flow margin was 18%.

• Appointment of Kevin Rubin as CFO and Raj Judge as Board member and EVP of Corporate Strategy & Ventures.

Financial highlights

• Q3 revenue was $678 million, up 23% year-over-year; calculated billings reached $785 million, up 25%; deferred revenue up 26%.

• Gross margin was 80% (non-GAAP), operating margin 22%, and free cash flow margin 18%.

• ARR reached $2.9 billion, up 23% year-over-year; RPO at ~$5 billion, up 30%.

• 642 customers have over $1 million in ARR; 3,363 customers exceed $100,000 in ARR.

• Ended the quarter with $3.0 billion in cash, cash equivalents, and short-term investments.

Outlook and guidance

• Q4 FY25 revenue expected between $705 million and $707 million; non-GAAP net income per share guided at $0.79–$0.80.

• Full-year FY25 revenue guidance raised to $2.659–$2.661 billion, with billings at $3.184–$3.189 billion.

• Operating profit margin guidance at 22%; free cash flow margin projected at 25.5%–26%.

• Full-year non-GAAP net income per share expected at $3.18–$3.19.

• Management anticipates continued net losses on a GAAP basis as investments in growth persist.