Zscaler Inc (0XVU.L) Q2 2025 Earnings Report

Zscaler’s QQ2 2025 results deliver solid top-line momentum with revenue of $647.9 million, up 23% year-over-year, driven by continued cloud security demand and robust intake across industries. The gross margin remained healthy at approximately 77.1%, suggesting strong product economics despite a substantial operating expense burden. The company posted an operating loss of about $40.1 million and a net loss of $7.7 million for the quarter, reflecting sustained investment in R&D, sales & marketing, and general administration, including notable stock-based compensation. Importantly, Zscaler generated meaningful free cash flow of $143.4 million and ended the period with a strong liquidity position (net cash). These dynamics yield a classic growth-at-scale profile common to high-growth SaaS names: expanding revenue and cash generation alongside ongoing investments that weigh on GAAP profitability in the near term.

Looking ahead, the balance sheet remains robust with a net cash position and a sizable deferred revenue base, which supports revenue visibility. The key questions for investors center on management’s ability to achieve operating leverage as revenue scales, potential improvements in sales efficiency, and how SBC cadence evolves as the company continues to scale. The competitive landscape remains intense in cloud security, with looming pressures from incumbents and rising entrants. The QQ2 2025 performance validates Zscaler’s growth trajectory, while execution on margin expansion and cash flow optimization will be critical to sustaining a premium valuation in a high-mmultiple software environment.