Zscaler [ZS]
As of 2026-07-29. Every figure traceable to a named source. $m unless stated.
| Input | Value | Source | Notes |
|---|---|---|---|
| Spot | $153.72 | Alpaca /v2/stocks/ZS/snapshot, latest trade 2026-07-29 |
Prior close $151.63 (2026-07-28) matches the screen's $151.635 |
| Shares — basic, balance sheet | 160,741,000 | AV BALANCE_SHEET, commonStockSharesOutstanding @2026-04-30 |
|
| Shares — cover page (dei) | 161,709,525 | EDGAR dei:EntityCommonStockSharesOutstanding |
What the screen used |
| Shares — fully diluted (used) | 168,000,000 | CFO, FQ3 FY26 call: "168 million fully diluted shares" in FY26 EPS guidance | Chosen basis. A 4.5% step-up over basic. Using basic would understate the EV by $1.1bn and overstate the per-share target by 4.5% |
| Net cash | +$1,772.7m | Built below; validated against CFO prepared remarks | Screen had $887.3m — a $885.4m error |
| TTM revenue | $3,173.6m | Sum of AV quarterly periods 2025-07-31, 2025-10-31, 2026-01-31, 2026-04-30 — four consecutive quarters, verified consecutive | Matches the screen exactly. Not last-FY (the MU/SNDK error) |
| Fiscal year end | 31 July | AV OVERVIEW, FiscalYearEnd: July |
FQ3 FY26 = quarter ended 2026-04-30 |
| Latest filing | 10-Q, period end 2026-04-30 | EDGAR | 90 days old at memo date. Recency asserted (the GOOGL 485-day / Alcon-2010 lesson) |
| Splits | NONE | AV SPLITS → {"symbol":"ZS","data":[]} |
Checked before any per-share figure was computed, per the CRWD 4:1 cautionary case |
| Component | Amount | Tag / source |
|---|---|---|
| Cash and cash equivalents | +982.1 | AV cashAndCashEquivalentsAtCarryingValue |
| Short-term investments | +2,557.0 | AV shortTermInvestments |
| Subtotal, cash + ST investments | 3,539.1 | CFO: "$3.5 billion in cash, cash equivalents, and short-term investments" ✓ |
| Long-term debt (convertible notes) | −1,699.6 | AV longTermDebt |
| Short-term debt | −66.8 | AV shortTermDebt |
| Subtotal, debt | −1,766.4 | CFO: "$1.7 billion of debt" ✓ |
| Net cash | +1,772.7 |
Basis note: operating lease liabilities are excluded. The screen included OperatingLeaseLiabilityNoncurrent
as debt. Either convention is defensible provided it is applied consistently across comparators; I state mine, and
the exclusion is immaterial next to the two omissions the screen made.
Validated against a source Alpha Vantage did not produce — the CFO's prepared remarks. Per the brief, AV's internal consistency checks have no power because a vendor that is wrong consistently defeats them; only an independent source does. This one agrees.
| Quarter ended | Revenue | Gross profit | GM% | Operating income | OM% | R&D | SBC | SBC % rev | OCF | Capex |
|---|---|---|---|---|---|---|---|---|---|---|
| 2026-04-30 | 850.5 | 657.8 | 77.3 | −29.6 | −3.5 | 232.3 | 205.2 | 24.1 | 198.0 | 62.1 |
| 2026-01-31 | 815.8 | 624.5 | 76.6 | −51.8 | −6.3 | 229.1 | 216.6 | 26.5 | 204.1 | 35.0 |
| 2025-10-31 | 788.1 | 603.4 | 76.6 | −36.4 | −4.6 | 200.5 | 188.6 | 23.9 | 448.3 | 35.0 |
| 2025-07-31 | 719.2 | 547.6 | 76.1 | −32.2 | −4.5 | 177.6 | 172.7 | 24.0 | 250.6 | 78.7 |
| 2025-04-30 | 678.0 | 522.2 | 77.0 | −22.4 | −3.3 | 169.3 | 159.4 | 23.5 | 211.1 | 91.6 |
| 2025-01-31 | 647.9 | 499.5 | 77.1 | −37.0 | −5.7 | 170.5 | 172.1 | 26.6 | 179.4 | 36.0 |
| 2024-10-31 | 628.0 | 485.7 | 77.3 | −31.9 | −5.1 | 154.3 | 157.2 | 25.0 | 331.3 | 39.5 |
| 2024-07-31 | 592.9 | 462.1 | 77.9 | −25.7 | −4.3 | 139.0 | 144.9 | 24.4 | 203.6 | 67.2 |
| 2024-04-30 | 553.2 | 434.1 | 78.5 | −4.4 | −0.8 | 125.0 | 113.2 | 20.5 | 173.4 | 50.3 |
| 2024-01-31 | 525.0 | 407.1 | 77.5 | −47.1 | −9.0 | 122.2 | 140.4 | 26.7 | 142.1 | 41.3 |
| 2023-10-31 | 496.7 | 384.8 | 77.5 | −46.7 | −9.4 | 113.5 | 129.1 | 26.0 | 260.8 | 36.1 |
| 2023-07-31 | 455.0 | 352.3 | 77.4 | −42.0 | −9.2 | 96.2 | 122.1 | 26.8 | 135.9 | 34.6 |
| 2023-04-30 | 418.8 | 322.9 | 77.1 | −48.1 | −11.5 | 92.3 | 107.8 | 25.7 | 108.5 | 34.6 |
| 2023-01-31 | 387.6 | 300.3 | 77.5 | −61.0 | −15.7 | 85.0 | 109.7 | 28.3 | 89.5 | 26.7 |
| TTM to 2026-04-30 | TTM to 2025-04-30 | Change | |
|---|---|---|---|
| Revenue | 3,173.6 | 2,546.8 | +24.6% |
| Gross profit | 2,433.3 | 1,955.1 | +24.5% |
| Gross margin | 76.7% | 76.8% | −0.1pp |
| Operating income | −150.0 | −117.0 | — |
| Operating margin | −4.73% | −4.59% | −0.14pp |
| R&D | 839.5 (26.5%) | 633.5 (24.9%) | +1.6pp |
| S&M + G&A (derived) | 1,743.8 (54.9%) | 1,438.6 (56.5%) | −1.6pp |
| SBC | 783.1 (24.68%) | 633.6 (24.88%) | −0.20pp |
| Operating margin ex-SBC | +19.95% | +20.28% | −0.33pp |
| Operating cash flow | 1,101.0 | 925.4 | +19.0% |
| Capex | 210.8 | 234.3 | −10.0% |
| Free cash flow | 890.2 (28.05%) | 691.1 (27.14%) | +0.91pp |
The central observation for the model: revenue up 2.9x from the 3-year CAGR base of $1,090.9m, and every
margin measure flat. GAAP −0.14pp, ex-SBC −0.33pp, FCF +0.91pp. Any model that assumes operating leverage on
this name is assuming a break from three years of behaviour, and that assumption must be argued explicitly (it is,
in ZS_Valuation.md §2, and it rests entirely on SBC decaying).
Method: calculated billings = revenue + Δ(ContractWithCustomerLiabilityCurrent + ContractWithCustomerLiabilityNoncurrent).
Validation — this is why the series can be trusted: for the quarter ended 2025-04-30 the method returns $784.5m; the CFO reported "Total calculated billings grew 25% year over year to $785 million." Agreement to 0.06%.
| Quarter ended | Revenue | Deferred rev. (total) | Billings | Billings YoY | Total RPO | RPO YoY | Unbilled RPO |
|---|---|---|---|---|---|---|---|
| 2026-04-30 | 850.5 | 2,477.2 | 972.3 | +23.9% | 6,459.3 | +29.8% | 3,982.1 |
| 2026-01-31 | 815.8 | 2,355.4 | 819.8 | +10.4% | 6,050.8 | +31.1% | 3,695.4 |
| 2025-10-31 | 788.1 | 2,351.3 | 671.4 | +29.9% | 5,932.6 | +34.5% | 3,581.3 |
| 2025-07-31 | 719.2 | 2,468.0 | 1,202.3 | +32.0% | 5,780.1 | +30.8% | 3,312.1 |
| 2025-04-30 | 678.0 | 1,985.0 | 784.5 ✓ | +24.9% | 4,978.0 | +30.2% | 2,993.0 |
| 2025-01-31 | 647.9 | 1,878.5 | 742.7 | +18.3% | 4,615.3 | +27.7% | 2,736.8 |
| 2024-10-31 | 628.0 | 1,783.7 | 516.7 | +13.2% | 4,410.6 | +26.5% | 2,626.9 |
| 2024-07-31 | 592.9 | 1,895.0 | 910.8 | +26.6% | 4,417.6 | +25.7% | 2,522.6 |
| 2024-04-30 | 553.2 | 1,577.0 | 628.0 | +30.2% | 3,824.1 | +26.5% | 2,247.1 |
| 2024-01-31 | 525.0 | 1,502.2 | 627.6 | +27.1% | 3,613.0 | +28.6% | 2,110.8 |
| 2023-10-31 | 496.7 | 1,399.5 | 456.6 | +34.2% | 3,487.4 | +30.0% | 2,087.9 |
| 2023-07-31 | 455.0 | 1,439.7 | 719.3 | +38.2% | 3,513.6 | +34.8% | 2,073.9 |
TTM: billings $3,665.8m (+24.1%) against revenue $3,173.6m (+24.6%). Deferred revenue +24.8%; unbilled RPO +33.0%. Duration is lengthening — Z-Flex, at a ~4-year average term and >$1bn TCV over 12 months, is the named cause. The demand signal is billings at +24.1%; RPO at +29.8% overstates demand by the duration effect.
Data note that would silently break this table: AV's deferredRevenue field returns None for every ZS
quarter. The contract-liability figures above are from EDGAR XBRL
(ContractWithCustomerLiabilityCurrent / Noncurrent). Anyone building this from AV alone gets nothing and may not
notice.
| $m | |
|---|---|
| Cash and equivalents | 982.1 |
| Short-term investments | 2,557.0 |
| Accounts receivable, net | 730.5 |
| Goodwill | 1,094.4 |
| Intangible assets | 191.7 |
| Total current liabilities | 2,500.9 |
| Contract liabilities — current | 2,097.1 |
| Contract liabilities — non-current | 380.1 |
| Short-term debt | 66.8 |
| Long-term debt (convertible notes) | 1,699.6 |
| Total shareholders' equity | 2,366.6 |
Receivables check: AR $730.5m at +18.6% YoY against revenue at +25.4%. Receivables growing 6.8pp slower than revenue — the opposite of the brief's most-reliable warning sign.
Goodwill and intangibles total $1,286.1m, largely Red Canary. The amortisation of the $191.7m intangible is what
inflates the reported non-GAAP operating-margin expansion above the ex-SBC figure (see ZS_Research.md §2e).
| Driver | FY26 (Aug-25 → Jul-26) | FY27 | Basis |
|---|---|---|---|
| Revenue | $3,330.9m (Q1–Q3 actual + Q4 guide midpoint $876.5m) | $3,880.5m (+16.5%) | Q4 guide $875–878m; FY27 growth 16–17% — both company-stated |
| Non-GAAP operating profit | $755–757m (~22.7%) | — | Company guidance |
| Non-GAAP EPS | $4.10–4.11 | — | Company guidance, at a 21% tax rate and 168m diluted shares |
| FCF margin | 22.8–23.3% | ~21% | Company — cut from 26.5–27.0%. FY27 takes a further ~200bp of capex |
| Capex % of revenue | high single digits (up from mid single digits) | +up to 200bp on FY26 | Company — memory/storage/processor price inflation |
| SBC % of revenue | 24.7% actual | modelled to decay to 15.0% by FY31 | The load-bearing assumption. Not demonstrated — SBC has been flat for two years |
| Terminal margin FY31 | — | 15.0% GAAP | Built via the opex bridge, ZS_Valuation.md §2 |
Consensus: unavailable. AV EARNINGS_ESTIMATES returns {"symbol":"ZS","estimates":[]} — an empty array
for a $24bn S&P 500 constituent with ~40 covering analysts. Every forecast figure above is therefore company
guidance, and that single-sourcing is why evidence_grade is B.
| # | Defect | Magnitude |
|---|---|---|
| 1 | Screen net cash omitted $2,557.0m of short-term investments and the $1,699.6m long-term convert, using a stale FY2025 current-convert tag instead. net_cash_complete: true |
$885.4m understated; EV overstated 3.7% |
| 2 | A second scan record for ZS on the same date (.cache/universe_scan/ZS_analysis.json) carries net cash −$166.8m, revenue $3,132.4m, required CAGR 24.8%, margin +10.1pp — none matching scan_v3, none matching the brief's +25.1pp / 9.7% |
$1,939.5m spread on net cash; 15pp spread on the valuation margin. Three inconsistent records |
| 3 | AV deferredRevenue returns None for all 41 quarters |
Fatal to billings work if unnoticed; worked around via EDGAR |
| 4 | AV EARNINGS_ESTIMATES returns an empty array |
No consensus anchor; empty, not an error, so it fails silently |
| 5 | AV transcript coverage: 7 of the last 18 quarters | Mention-frequency series has gaps |
| 6 | AV transcript quarter labels for ZS are offset +1 calendar quarter from the call date (the FQ3 FY26 call, held 2026-05-28 = CY2026Q2, is labelled 2026Q3); the labelling convention differs from the one AV uses for S |
Silently misaligns any time series built by quarter label |
| 7 | Screen terminal margin 10.7%, labelled "industry median," is a universe median (sic2 = None for all 1,433 names) |
−4.3pp vs the built figure, in the direction that flatters the name |
| 8 | Screen margin_period: 2025-07-31 — the operating-margin change is measured on an annual period 12 months stale, with three fresher quarters filed |
+1.09pp stale vs −0.14pp current. Harmless here (the stale window flattered), latent elsewhere |
| 9 | AV D&A sign / ebitda field |
Not triggered on ZS. The field was not used regardless, per the brief |