Executive Summary
Zscaler’s QQ4 2025 results reinforce the company’s ability to grow top-line revenue in a rapidly expanding cloud security market, delivering a four-quarter trailing revenue of approximately $2.673 billion and a stable gross margin profile. Revenue for Q4 2025 reached $719.226 million, up about 21.3% year-over-year and 6.1% quarter-over-quarter, while gross profit was $547.623 million and gross margin stood at 76.14%. The firm’s EBITDA was $34.698 million (EBITDA margin ~4.82%), but net income remained negative at $17.578 million, driving a diluted EPS of -$0.11. The operating loss of $32.242 million reflects ongoing investments in R&D and go-to-market initiatives typical of a high-growth software services company. The balance of growth versus profitability continues to hinge on scale, mix, and operating leverage as Zscaler expands its addressable market and product suite at the higher end of SaaS economics.
Key takeaways for investors: (i) durable revenue growth with a stable gross margin profile supports long-term unit economics, (ii) near-term profitability remains pressured by elevated operating expenses despite EBITDA positivity, and (iii) ongoing investment in platform expansion and cross-sell opportunities could unlock margin improvement as scale increases. The absence of explicit forward-looking guidance in the provided data calls for cautious interpretation, with a focus on how efficiently Zscaler converts growth into improved operating leverage and free cash flow over the coming quarters.
Key Performance Indicators
QoQ: -43.75% | YoY:-19.64%
QoQ: -326.13% | YoY:-18.15%
QoQ: -313.53% | YoY:-10.55%
Key Insights
Revenue: Q4 2025 revenue of $719.226 million, up 21.31% YoY and 6.08% QoQ; trailing four-quarter revenue approximately $2.673 billion.
Gross Profit: $547.623 million; gross margin 76.14% (vs. 76%+ in prior periods).
Operating Income: -$32.242 million; operating margin -4.48% (improving vs. steeper losses in earlier periods but still negative).
EBITDA: $34.698 million; EBITDA margin ~4.82% (positive, signaling ongoing profitability through operating efficiency and scale).
Net Income: -$17.578 mil...
Financial Highlights
Revenue: Q4 2025 revenue of $719.226 million, up 21.31% YoY and 6.08% QoQ; trailing four-quarter revenue approximately $2.673 billion.
Gross Profit: $547.623 million; gross margin 76.14% (vs. 76%+ in prior periods).
Operating Income: -$32.242 million; operating margin -4.48% (improving vs. steeper losses in earlier periods but still negative).
EBITDA: $34.698 million; EBITDA margin ~4.82% (positive, signaling ongoing profitability through operating efficiency and scale).
Net Income: -$17.578 million; net margin -2.44% (negative due to non-operating charges and taxes despite EBITDA strength).
EPS (Diluted): -$0.11 per share; weighted average diluted shares ~156.496 million.
R&D: $177.606 million (investing in product development and platform enhancements).
SG&A (Selling, General & Administrative): $401.622 million (S&M $330.594m; G&A $71.028m).
Total Operating Expenses: $579.228 million; Cost of Revenue: $172.240 million; Revenue minus cost yields gross profit of $547.623 million.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
719.23M |
21.31% |
6.08% |
| Gross Profit |
547.62M |
18.36% |
4.87% |
| Operating Income |
-32.24M |
-19.64% |
-43.75% |
| Net Income |
-17.58M |
-18.15% |
-326.13% |
| EPS |
-0.11 |
-10.55% |
-313.53% |
Management Commentary
No earnings call transcript highlights were provided in the data. Management quotes from the QQ4 2025 call are not available in the supplied materials. If you provide the transcript, I can extract and categorize quotes by theme (strategy, operations, market conditions) with context and significance.
Forward Guidance
Explicit forward guidance for QQ1 2026 or beyond is not included in the provided data. Given the quarterly trajectory and the underlying dynamics of the cloud security market, investors should monitor: (1) progression toward positive operating cash flow and margin expansion as scale effects accrue, (2) cross-sell and upsell traction across Zscaler’s security modules (ZIA, ZPA, Digital Experience, and Cloud Security Posture Management offerings), and (3) customer concentration and multi-year ARR retention metrics as the business matures. Industry drivers such as ongoing cloud adoption, secure remote work trends, and the need for zero-trust access continue to support long-term growth, but near-term profitability will depend on the company’s ability to optimize operating expenses relative to growing revenue.