Zscaler’s QQ3 2024 results reflect a solid top-line performance amid a challenging profitability backdrop, underpinned by robust cash generation and a strong balance sheet. Revenue reached $553.2 million, up 32.1% year over year and 5.4% quarter over quarter, supported by a gross margin of approximately 78.5%. Despite a small GAAP operating loss of about $4.4 million, the company delivered positive net income of $19.1 million driven by other income and a favorable tax line, resulting in EPS of $0.13 (diluted $0.12).
Operating cash flow was healthy at $173.4 million for the quarter, with free cash flow of $123.1 million, highlighting durable cash generation even as the company continued strategic investments. The balance sheet remains strong with cash and cash equivalents of $1.26 billion and total cash plus short-term investments of roughly $2.24 billion, modest net debt of about $24 million (net cash), and a long-term debt load of $1.184 billion. Notably, acquisitions had a meaningful cash outflow (net acquisitions cash effect of approximately $357 million), contributing to a more assertive growth strategy.
The quarterly results are accompanied by a high-valuation backdrop typical of cloud-native software peers: elevated price-to-sales and price-to-free-cash-flow multiples, reflecting investors’ expectations for sustained ARR growth and expanding margins over time. Management commentary (where available in the dataset) is limited here; no transcript content is provided, so the forward-looking narrative leans on industry dynamics and the company’s product roadmap. Investors should monitor ARR growth, dollar-based net retention, mix shifts toward higher-margin SaaS modules, and the efficiency of acquisitions as growth accelerants.