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← @hhhypergrowth

$ZS

BEARISH2025-12-08
Price around the call
↓ 2025-12-08
By horizon✓ hit-12.7%
1d
✓ -0.5%
5d
✓ -3.6%
21d
✓ -12.7%
Original post
muji @ hhhypergrowth · 2025-12-08

Zscaler's $ZS Q1 report showed a reacceleration in the top line (+20.7% rising to over +25% from Q4 to Q1), but that is entirely from its acquisition of MDR provider Red Canary that closed on the first day of quarter. Red Canary previously reported having $140M in ARR in March, aka $35M a quarter. Adjusting that out of Q126 results changes it from +25.5% YoY growth to +19.9% ... implying a continued slowdown in their core business. Apparently, an acquisition adding 4.6% to revenue results in "don't believe... are material", and YoY organic growth going from +20.7% to +19.9% seq means "organic growth in Q1 was consistent compared to Q4".

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