Have you evaluated the performance of Zscaler's (ZS Quick QuoteZS - Free Report) international operations during the quarter that concluded in October 2024? Considering the extensive worldwide presence of this cloud-based information security provider, analyzing the patterns in international revenues is crucial for understanding its financial resilience and potential for growth.

In the modern, closely-knit global economic landscape, the capacity of a business to access foreign markets is often a key determinant of its financial well-being and growth path. Investors now place great importance on grasping the extent of a company's dependence on international markets, as it sheds light on the firm's earnings stability, its skill in leveraging various economic cycles and its broad growth potential.

Being present in international markets serves as a counterbalance to domestic economic challenges while offering chances to engage with more rapidly evolving economies. However, this kind of diversification introduces challenges like currency fluctuations, geopolitical uncertainties and varying market trends.

While delving into ZS' performance for the past quarter, we observed some fascinating trends in the revenue from its foreign segments that are commonly modeled and observed by analysts on Wall Street.

The company's total revenue for the quarter stood at $627.96 million, increasing 26.4% year over year. Now, let's delve into ZS' international revenue breakdown to gain insights into the significance of its operations beyond home turf.

Unveiling Trends in ZS' International Revenues

Europe, Middle East and Africa accounted for 29.63% of the company's total revenue during the quarter, translating to $186.07 million. Revenues from this region represented a surprise of -0.97%, with Wall Street analysts collectively expecting $187.89 million. When compared to the preceding quarter and the same quarter in the previous year, Europe, Middle East and Africa contributed $180.34 million (30.42%) and $157.25 million (31.66%) to the total revenue, respectively.

Of the total revenue, $99.38 million came from Asia Pacific during the last fiscal quarter, accounting for 15.83%. This represented a surprise of +8.61% as analysts had expected the region to contribute $91.5 million to the total revenue. In comparison, the region contributed $89.9 million, or 15.16%, and $75.08 million, or 15.12%, to total revenue in the previous and year-ago quarters, respectively.

Other International generated $23.19 million in revenues for the company in the last quarter, constituting 3.69% of the total. This represented a surprise of +10.54% compared to the $20.98 million projected by Wall Street analysts. Comparatively, in the previous quarter, Other International accounted for $20.8 million (3.51%), and in the year-ago quarter, it contributed $16.85 million (3.39%) to the total revenue.

International Revenue Predictions

It is projected by analysts on Wall Street that Zscaler will post revenues of $633.97 million for the ongoing fiscal quarter, an increase of 20.8% from the year-ago quarter. The expected contributions from Europe, Middle East and Africa, Asia Pacific and Other International to this revenue are 32.3%, 15.9% and 3.7%, translating into $204.72 million, $100.57 million and $23.27 million, respectively.

For the full year, the company is projected to achieve a total revenue of $2.63 billion, which signifies a rise of 21.5% from the last year. The share of this revenue from various regions is expected to be: Europe, Middle East and Africa at 30.6% ($805.69 million), Asia Pacific at 15% ($394.7 million) and Other International at 3.5% ($90.98 million).

Concluding Remarks

The dependency of Zscaler on global markets for its revenues presents a mix of potential gains and hazards. Thus, monitoring the trends in its overseas revenues can be a key indicator for predicting the firm's future performance.

In an environment where global interconnections and geopolitical skirmishes are intensifying, Wall Street analysts keep a keen eye on these trends, particularly for firms with overseas operations, to adjust their earnings predictions. Moreover, a range of other aspects, including how a company fares in its home country, significantly affects these projections.

At Zacks, we place significant importance on a company's evolving earnings outlook. This is based on empirical evidence demonstrating its strong influence on a stock's short -term price movements. Invariably, there exists a positive relationship -- an upward revision in earnings estimates is typically mirrored by a rise in the stock price.

Boasting a remarkable track record that's been externally verified, the Zacks Rank, our unique stock rating system, leverages changes in earnings projections to function as a reliable gauge for predicting short-term stock price movements.

At present, Zscaler holds a Zacks Rank #2 (Buy). This ranking implies that its near-term performance might beat the overall market movement. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Assessing Zscaler's Stock Price Movement in Recent Times

Over the past month, the stock has seen an increase of 4.5% in its value, whereas the Zacks S&P 500 composite has posted an increase of 5.2%. The Zacks Computer and Technology sector, Zscaler's industry group, has ascended 5.3% over the identical span. In the past three months, there's been an increase of 23.3% in the company's stock price, against a rise of 10.8% in the S&P 500 index. The broader sector has increased by 13.2% during this interval.