Zscaler Reports 26% Revenue Growth to $788.1 Million, Net Loss of $11.6 Million

Zscaler, Inc. reported significant financial results for the three months ending October 31, 2025, with total revenue reaching $788.1 million, a 26% increase from $627.9 million in the same period last year. The growth was primarily driven by an increase in users and additional subscriptions from existing customers, contributing approximately $86.2 million to the revenue increase. The company also expanded its customer base by 14%, bringing the total to over 9,400 customers, including approximately 40% of the Forbes Global 2000.

Despite the revenue growth, Zscaler recorded a net loss of $11.6 million for the quarter, slightly improved from a loss of $12.1 million in the prior year. The loss per share was $0.07, compared to $0.08 in the same quarter of 2024. Operating expenses increased to $639.7 million, up from $517.2 million, largely due to higher sales and marketing costs, which rose by 22% to $373.6 million, and research and development expenses, which increased by 30% to $200.5 million. The company attributed these increases to investments in headcount and marketing initiatives, including costs associated with recent acquisitions.

Zscaler's operational metrics indicate a strong engagement with its cloud platform, with subscription and support revenue accounting for approximately 98% of total revenue. The company also reported a dollar-based net retention rate of 115%, reflecting its ability to retain and expand revenue from existing customers. The geographic distribution of revenue showed that the United States accounted for 54%, while Europe, the Middle East, and Africa contributed 27%, and the Asia Pacific region made up 15%.

Strategically, Zscaler completed two significant acquisitions during the quarter: SPLXAI Inc. for $40.6 million and Red Canary Inc. for $651.4 million. These acquisitions are expected to enhance Zscaler's AI-driven security offerings and expand its capabilities in managed detection and response services. The company also reported a substantial increase in goodwill, which rose to $994.5 million, reflecting the value attributed to these acquisitions.

Looking ahead, Zscaler anticipates continued investment in its sales and marketing efforts to drive growth and expand its market share. The company expects to incur net losses in the near term as it focuses on enhancing its cloud platform and addressing legal matters. Zscaler's cash, cash equivalents, and short-term investments totaled $3.3 billion as of October 31, 2025, which the company believes will be sufficient to fund its operations and growth initiatives for at least the next 12 months.