Zscaler, Inc. (NASDAQ: ZS) is a cloud security company focused on providing a Zero Trust Exchange platform that enables secure access to applications for users and devices regardless of location. The company reported strong financial results for its third quarter of fiscal year 2025, reflecting robust demand for its services and a stable growth trajectory.

For the third quarter ended April 30, 2025, Zscaler achieved revenue of $678 million, representing a 23% increase year-over-year and a 5% sequential growth from the previous quarter. The company’s annual recurring revenue (ARR) reached approximately $2.9 billion, maintaining a year-over-year growth rate of about 23%. Remaining performance obligations grew by 30% year-over-year, totaling nearly $5 billion. Total calculated billings amounted to $785 million, which is a 25% increase compared to the prior year’s third quarter.

In terms of profitability, Zscaler reported a non-GAAP net income of $136.8 million, up from $113 million in the same quarter the previous year. This resulted in non-GAAP earnings per share of $0.84, compared to $0.71 in the prior year. The total gross margin for the quarter was 80.3%, a slight decline from 81.4% year-over-year. Operating expenses increased to $397 million, reflecting a 21% year-over-year increase, while the operating margin stood at approximately 22%, consistent with the prior year’s figures.

Zscaler’s cash flows also remained strong, with cash provided by operations reaching $211.1 million, which equates to 31% of revenue. The company’s free cash flow margin was reported at 18%. As of the quarter’s end, Zscaler had approximately $3 billion in cash, cash equivalents, and short-term investments.

For the upcoming fourth quarter, Zscaler has guided for revenue to be between $705 million and $707 million, which indicates a year-over-year growth of approximately 19%. Non-GAAP income from operations is expected to be in the range of $152 million to $154 million, translating to non-GAAP earnings per share of approximately $0.79 to $0.80.

Overall, Zscaler’s financial metrics reflect a company in a stable growth phase, continuing its focus on capitalizing on the increasing demand for cloud security and Zero Trust architecture.