Billion Dollar Unicorns: Zscaler Is The Top US Tech IPO Of 2018

In March, Billion Dollar Unicorn and enterprise cloud security firm Zscaler listed successfully on NASDAQ under the ticker ZS. Last week, its first earnings report as a public company blew past all analyst projections, and the stock jumped by 38%, making it the best performing US tech IPO of the year.

Zscaler’s Financials

Zscaler’s third quarter revenue grew 49% to $49.2 million driven by 73% jump in calculated billings. GAAP net loss was $8.8 million or $0.14 per share, compared to $7.6 million or $0.34 per share a year ago. Pro forma non-GAAP net loss per share was $0.02, compared to $0.05 a year ago. Analysts expected loss of $0.08 per share on revenue of $46 million.

Cash and cash equivalents were $287.4 million as of April 30, 2018.

For the fourth quarter, the company expects revenue of $50 to $51 million, non-GAAP loss of $6 to $7 million, and pro forma non-GAAP net loss per share of $0.05 to $0.06 using shares outstanding of about 120 million. Analysts forecast sales of $48.4 million on adjusted loss of $0.09 per share.

For the fiscal year 2018, Zscaler expects revenue of $184 to $185 million, non-GAAP loss of $19 to $20 million, and pro forma non-GAAP net loss per share of $0.17 to $0.18.

As per its S-1 filing, revenue in 2017 increased 57% to $125.7 million in 2017 with net loss of $35.5 million. Its revenue increased 50% to $80.3 million in 2016 from $53.7 million in 2015. Net loss was $27.4 million in 2016 and $12.8 million in 2015.

Zscaler’s Offerings

San Jose-based Zscaler was founded by serial entrepreneur Jay Chaudhury in 2008. After successfully flipping one of his many startups, Jay realized that his next challenge would be to create something that would have a lasting impact in the market. It was then that he came up with the idea of ZScaler. Jay wanted to offer web security in the cloud that would be able to cater to the rapidly growing mobile world by integrating point products. You can read my interview with him on his entrepreneurial journey.

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Sramana Mitra is the founder of One Million by One Million (1M/1M), a global virtual incubator that aims to help one million entrepreneurs ...

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