Is the business good?
How good a business is ZS?
Zscaler, Inc. earns −8.6% on the capital it employs against a 9.0% cost of capital, so growth costs more than it returns.
−8.6%
Return on invested capital · cost of capital 9.0% · 18 points below what the capital costs: growth destroys value
- Operating margin
- −4.7%
Operating margin · Software - Infrastructure median 6.1% · 12 months to Q3 2026
- Share count, year on year
- +3.8%
Share count, year on year · shareholders own a smaller slice than a year ago
- R&D as % of revenue
- 26%
R&D as % of revenue
| Year | Operating margin |
|---|---|
| FY2020 | −26% |
| FY2021 | −31% |
| FY2022 | −30% |
| FY2023 | −15% |
| FY2024 | −5.6% |
| FY2025 | −4.8% |
Details›
- Gross margin12 months to Q3 2026
- 77%
- Operating margin12 months to Q3 2026
- −4.7%
- Net margin12 months to Q3 2026
- −2.4%
- Free cash flow margin
- 30%
- R&D as % of revenue
- 26%
- Revenue, trailing twelve months
- $3.17B
- Free cash flow, trailing twelve months
- $963M
- Net income, trailing twelve months
- −$77M
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- −8.6%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion from the cash flow statement.
Software - Infrastructure
Ranks #74 of 78 by Smart Score