Zscaler reported a strong QQ3 2024 with robust top-line growth, meaningful operating leverage, and continued strategic expansion into AI-enabled security and Zero Trust architectures. Revenue rose 32% year over year to $553.2 million, up 5% sequentially, driven by broad demand for the Zero Trust Exchange (ZDX) platform and expanding adoption of data protection and AI-enabled security modules. Calculated billings grew 30% YoY to $628 million, while Remaining Performance Obligations (RPO) advanced 27% YoY to $3.824 billion, underscoring durable demand and visibility into future revenue streams. The company ended QQ3 with 523 customers generating more than $1 million in ARR and 50 customers above $5 million ARR, highlighting the acceleration of large, multi-pillar deployments.
Management repeatedly stressed that the platform remains mission-critical for customers amid a tougher macro environment and tighter IT budgets. Gross margin expanded to 81.4% (vs. 80.8% last quarter and 80.2% a year ago), aided by a cloud infrastructure useful life extension, while non-GAAP operating margin reached 22% as operating leverage expanded. Net income was positive for the quarter, and GAAP profitability emerged for QQ3, reflecting improved cost management and a favorable stock-based compensation dynamic. Free cash flow margin was 22% of revenue, with free cash flow of approximately $123 million, supported by a solid cash position above $2.2 billion.
Looking ahead, Zscaler raised full-year guidance for fiscal 2024: revenue guidance of $2.140–$2.142 billion (roughly +32% YoY), calculated billings of $2.603–$2.606 billion (≈ +28%), and non-GAAP operating profit of $422–$424 million. The fourth quarter guidance calls for revenue of $565–$567 million (~+24–25% YoY) with gross margins at ~80% and EPS of $0.69–$0.70. Management noted a near-term shift of data center CapEx into fiscal 2025 and acknowledged transitional challenges in the go-to-market organization as Mike Rich integrates and scales an account-centric GTM. Overall, the QQ3 print reinforces Zscaler’s strategic positioning in high-growth security segments and the durability of its multi-pillar, AI-augmented Zero Trust platform.