Zscaler Inc (NASDAQ:ZS) Q1 2020 Earnings Conference Call - Final Transcript

Dec 03, 2019 • 04:30 pm ET


Zscaler Inc (NASDAQ:ZS) Q1 2020 Earnings Conference Call - Final Transcript


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Good day, and welcome to the Zscaler's First Quarter 2020 Earnings Conference Call. [Operator Instructions]

At this time, I would like to turn the conference over to Mr. Bill Choi. Sir, please begin.

Bill Choi

Good afternoon, and welcome to the Zscaler first quarter 2020 earnings conference call. On the call with me today are Jay Chaudhry, Chairman and CEO; and Remo Canessa, CFO. By now, everyone should have access to our earnings announcement, which can be found on our website in the Investor Relations section.

In addition, a supplemental financial schedule is available for download at ir.zscaler.com. Please note, unless otherwise noted all numbers we talk about today other than revenue will be on an adjusted non-GAAP basis. You will find the reconciliation of GAAP to the non-GAAP financial measures in our earnings release. For historical periods the GAAP to the non-GAAP reconciliations can be found in the supplemental financial information referenced a moment ago. Let me remind you that we'll be making forward-looking statements during today's discussions, including but not limited to the Company's anticipated future revenue calculated billings, operating performance, gross margin, operating expenses, operating income, net income, free cash flow, dollar-based net retention rate, income taxes and earnings per share. These statements and other comments are not guarantees of future performance, but rather are subject to risk and uncertainty, some of which are beyond our control.

Our actual results may differ significantly from those projected or suggested in any forward-looking statements. These forward-looking statements apply as of today, and you should not rely on them as representing our views in the future. We undertake no obligation to update these statements after this call. For a more complete discussion of the risks and uncertainties that could impact our future operating results and financial condition please see our filings with the Securities and Exchange Commission, as well as in today's earnings release.

I would like to inform you that we will be participating in several upcoming investor conferences. Next week management will be at the UBS Global TMT Conference and Cowen's Networking and Cyber Security Summit in New York City. And also the Barclays' TMT Conference in San Francisco. On January 14th, we will be at Needham's Growth Conference in New York.

Now I will turn the call over to Jay.

Jay Chaudhry

Thank you, Bill, and thank you everyone for joining us. We reported solid Q1 results delivering strong revenue and operating profit growth in the first quarter with positive free cash flow, while making strategic investments to scale our go-to-market machine to the next level. Our revenue grew 48% and billings grew 37% year-over-year in Q1 and we are increasing our outlook for revenue and billings for the full fiscal year 2020. Adoption of the CIA Transformation Bundle continues to grow. And ZPA remains our fastest growing product. I'm thrilled that more customers are using ZIA and ZPA together which provides a single platform for secured cloud transformation, that we believe no other vendor can match.

As you know Dali Rajic