Zscalerâs QQ2 2025 results underscore sustained topâline momentum and platform expansion, driven by aggressively improving goâtoâmarket efficiency and a multiâpillar product strategy. Revenue reached $647.9 million, up 23% year over year and roughly 3% quarter over quarter, while ARR exited above $2.7 billionâup 23% YoY. Management reiterated confidence in reaching $3.0+billion+ ARR by yearâend, anchored by growing pipeline, higher sales productivity, and expanding adoption of Zero Trust Everywhere across users, workloads, and the cloud. NonâGAAP operating margin remained strong at roughly the midâteens to lowâ20s percentage range (and the company highlighted a 22% operating margin for the quarter on a nonâGAAP basis), with free cash flow margin at a record 22%. The balance sheet remains highly liquid, with roughly $2.9 billion in cash, cash equivalents and shortâterm investments, and a net cash position (net debt) of about $520 million.
Key growth catalysts cited by management include: (1) Zero Trust Everywhere as a framework driving broader platform adoption and higher ACV, (2) Zero Trust Branch as a streamlined replacement for legacy firewalls/SDâWANs at the edge, and (3) AIâenabled data protection and analytics that enhance policy enforcement, reduce risk, and unlock higherâmargin product bundles. Management also highlighted meaningful customer momentum with large, multiâpillar deployments, GSIs accelerating deal closures, and government/public sector traction. While nearâterm GAAP profitability remains pressured by ongoing investments and ânew productâ mix, the company continues to generate strong cash flow and leverage in the business model. However, investors should monitor macro headwinds, deal scrutiny on large deployments, and the tempo of new logo vs. upsell mix as important risk factors.