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Zscaler, Inc.(ZS)

F

Financial data as of Jul 31, 2026Declining · Technology

FCF Margin-1.3%Free Cash Flow / Revenue
Cash Conversion—Operating CF / Net Income
Free Cash Flow$779.1M
Revenue$3.4B
Net Cash-$927.5MNet debt position
Debt / FCFN/AElevated debt burden
Current Ratio1.70Adequate short-term liquidity
YoY FCF Growth-200.0%1 of 5 quarters positive

How This Grade Was Calculated

Base grade from FCF margin, adjusted by financial health factors

BaseF
→
-1Significant YoY FCF decline (-200.0%)
→
-1Only 1 positive quarters recently
→
-0.5Highly volatile FCF (consistency: 14.53)
→
+0.25Solid revenue growth (24.9% YoY)
→
FinalF

Analysis Summary

Strengths

  • Strong revenue growth (24.9% YoY)

Concerns

  • Negative FCF margin (-1.3%)
  • Net debt position ($0.9B)
  • Only 1 positive FCF quarters recently
  • Significant YoY FCF decline (-200.0%)
  • Highly volatile quarterly FCF
Heavy CapEx — Operating cash flow is strong (34% margin) but most is reinvestedCash conversion ratio unavailable or not meaningfulSBC-adjusted FCF used — $0.8B stock-based compensation (105% of reported FCF) subtracted

Financial Breakdown

Key financials compared side by side

Margin Composition

FCF Margin-1.3%
Net Margin-1.9%
Operating CF Margin33.7%
CapEx Ratio10.5%

Balance Sheet Health

Debt, liquidity, and leverage snapshot

Net Cash-$927.5MNet debt position
Debt / FCFN/AElevated debt burden
Current Ratio1.70Strong liquidity
Debt / Equity0.71Low leverage

Quarterly FCF Trend

-200.0% YoYDeclining (-200.0%)

Free cash flow per quarter

Sector Comparison — Technology

FCF Margin ranked against sector peers

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Detailed Metrics

Company NameZscaler, Inc.
SectorTechnology
Free Cash Flow$779.1M
Revenue$3.4B
Net Income-$63.2M
Operating Cash Flow$1.1B
Capital Expenditure$350.5M
FCF Margin-1.3%
Cash Conversion Rate—
Net Margin-1.9%
Total Debt$1.9B
Total Cash$928.4M
Net Cash-$927.5M
Current Ratio1.70
Debt / Equity0.71
Debt / FCFN/A
YoY FCF Growth-200.0%
Positive Quarters1 of 5
Trend DirectionDeclining
Report DateJul 31, 2026
GradeF
Data SourceYahoo Finance