How Does This Cloud Security Platform Work?
Zscaler provides cloud security software that helps organizations control and protect access to applications and data. Its platform is built to secure users and devices as they connect to internal systems and the internet. The company sells its services to enterprises through subscription-
Are Margins and Cash Flow Showing Progress?
FundamentalsZscaler ended fiscal 2025 (reported in USD) with USD 2.67 billion of revenue, up 23.3% year over year. Profitability remained negative on a trailing basis, with a -4.73% operating margin and a -2.44% net profit margin, while gross margin held at 76.68%.
On the balance sheet, cash was USD 2.4 billion at period end, and depreciation and amortization totaled USD 104.4 million. ROE over the trailing period was -3.71%, consistent with the current loss profile.
Is The Market Overlooking Negative DCF Results?
DCF / MultiplesAt USD 135.26 per share, the stock trades well above the discounted cash flow outcomes, which are negative under all modeled scenarios. The pricing also corresponds to a price-to-sales multiple of about 6.85.
Profitability Must Follow Scale
TakeawayThe cash balance buys time, but losses shorten the runway. Durability depends on turning high gross margin into operating profit. The current price assumes a much better outcome than the DCF implies. If losses persist, resilience becomes a balance-sheet question again.