Company: ZScaler, Inc.
Symbol: ZS
Description: Their mission is to empower organizations to realize the full potential of the cloud and mobility by securely connecting users to applications from any device, anywhere.
Trade Date: 3/16
Shares: 10 million
Price Range: $10.00-$12.00
Underwriter(s): Morgan Stanley, Goldman Sachs, BofA Merrill Lynch, Barclays, Deutsche Bank Securities, Credit Suisse, UBS Investment Group
Co-Manager(s): Baird, BTIG, Needham & Co., Stephens Inc.
Terms Added: 3-5-18
Zscaler will be the year’s first “unicorn” IPO. The security software provider achieved a $1 billion valuation in 2015.
Business: Zscaler offers two principal cloud services:
- Zscaler Internet Access securely connects users to externally managed applications, including SaaS applications and internet destinations, regardless of device or location. Their ZIA solution sits between users and the internet and is designed to ensure malware does not reach the user and valuable corporate data does not leak out. Their ZIA solution enforces access based on granular access control policies, inspects unencrypted and encrypted internet traffic inline for malware and advanced threats and prevents data leakage
- Zscaler Private Access offers authorized users secure and fast access to internally managed applications hosted in enterprise data centers or the public cloud. Their ZPA solution’s highly innovative architecture does not expose the identity or location of these applications and provides only the necessary and appropriate levels of access. While traditional remote access solutions, such as VPNs, connect a user to the corporate network, our ZPA solution connects a specific user to a specific application, without bringing the user on the network, resulting in better security.
Financials: For fiscal 2015, 2016 and 2017, revenue was $53.7 million, $80.3 million and $125.7 million, respectively. Their net losses were $12.8 million, $27.4 million and $35.5 million in fiscal 2015, 2016 and 2017, respectively. For the six months ended January 31, 2017 and 2018, their revenue increased from $56.2 million to $84.8 million, representing a period-over-period revenue growth of 51%, while their net loss increased from $14.6 million to $17.9 million. They expect they will continue to incur net losses for the foreseeable future.
Insider Buying: Certain entities associated with Charles Giancarlo, Lane Bess, Scott Darling and Karen Blasing, each a member of our board of directors, have indicated an interest in purchasing up to an aggregate of approximately $5.0 million of shares of their common stock in this offering (or an aggregate of 454,545 shares based on the midpoint of the estimated offering price range set forth on the cover page of this prospectus) at the initial public offering price.
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