Short answer
Zscaler (ZS) filed its fiscal 2025 10-K annual report with the SEC on Sep 11, 2025. It reported revenue of $2.7B (+23.3% year over year) and net income of −$41M.
- Top risk flagged: Regulatory risk: EU Data Act allowing customers to cancel subscriptions with 30-60 days' notice, impacting contract terms and revenues
FY2025 key financial metrics · XBRL
- Revenue
- $2.7B
- +23.3% YoY
- Net income
- −$41M
- +28.1% YoY
- Operating margin
- -4.8%
- +0.8 pp YoY
- Gross margin
- 76.9%
- −1.1 pp YoY
- EPS (diluted)
- −$0.27
- +30.8% YoY
- ROE
- -2.3%
- +2.2 pp YoY
- Operating cash flow
- $972M
- +24.7% YoY
Source: XBRL data from the Zscaler (ZS) FY2025 10-K on SEC EDGAR. USD.
Zscaler FY2025 10-K analysis
AI summary of each section, grounded in the filing text
Business Overview
- Core business: Cloud-native Zero Trust security platform enabling secure access to applications and data globally without traditional firewalls or VPNs
- New focus on AI security: Security for Public and Private AI Applications and Agentic Operations to manage AI-related cyber risks and IT efficiencies
- Strategic shift: Expanded platform emphasizing convergence of Zero Trust + AI, introducing Security for AI, Agentic Operations, and AI-powered Data Fabric for Security
- Quantitative highlight: Revenue $2.67B in fiscal 2025, up 23% YoY; R&D spend $672.5M in fiscal 2025, a 35% increase over prior year
- Noteworthy fact: Platform blocks 225M+ daily threats, performs 250,000+ daily unique security updates, and is deployed across 160+ public and thousands private exchanges worldwide
Management Discussion & Analysis
- Revenue $2,673.1M in fiscal 2025 up 23% YoY from $2,167.8M in 2024 and up 34% YoY from $1,617.0M in 2023
- GAAP operating margin (5)% in 2025 vs (6)% in 2024; Non-GAAP operating margin 22% in 2025 vs 20% in 2024
- Single reportable segment; revenue growth drove gross profit to $2,054.9M (77% margin) in 2025 vs $1,690.6M (78% margin) in 2024
- Net loss improved to $41.5M in 2025 vs loss of $57.7M in 2024 and $202.3M in 2023
- Operating cash flow $972.5M and free cash flow $726.7M in 2025, free cash flow margin steady at 27% vs prior year
- Continued investment in sales/marketing and R&D to drive growth despite losses; sales and marketing expenses remain largest operating expense
- Management sees continued cautious customer spending, elongated sales cycles due to macroeconomic uncertainty and expects rising operating expenses
- Dollar-based net retentionrate 114% in 2025 down from 116% in 2024, signaling solid customer expansion potential despite challenging environment
Risk Factors
- Regulatory risk: EU Data Act allowing customers to cancel subscriptions with 30-60 days' notice, impacting contract terms and revenues
- Macroeconomic threat: Global economic disruptions and geopolitical events increasing credit risk and delaying customer purchasing decisions
- Operational vulnerability: Reliance on top five channel partners for 28% of fiscal 2025 revenue, with potential partner sales or legal risks
- Competitive risk: Competition from legacy appliance vendors and cloud providers offering hybrid or zero-margin bundled security solutions
- Financial risk: Net losses of $41.5M in fiscal 2025 and accumulated deficit $1,189.6M with increasing operating expenses may delay profitability
Generated from the filing text; verify against the original. How to read a 10-K
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