The Zscaler Earnings Crash: The CapEx Bear Case

Описание: Zscaler Got Crushed
Software Stocks Have an AI Margin Problem
Zscaler Shows Why SaaS Is Still Hard to Own



Zscaler’s earnings show why software stocks may still be difficult to own in this AI market.

In this video, we break down Zscaler’s earnings reaction after the company beat revenue and EPS expectations, grew revenue 25% year over year, and grew EPS 29% year over year — yet the stock still sold off hard after hours.

The key issue was not the headline beat. It was the guide.

Zscaler’s near-term revenue guidance came in slightly below expectations, but the bigger concern appears to be free cash flow margin. The company guided free cash flow margin down from roughly 27% to 23%, driven by higher CapEx as a percentage of revenue.

That matters because this is one of the core bear cases for software right now. If AI features, token usage, cloud infrastructure, and compute workloads require higher spending, then software companies may see pressure on free cash flow margins even while revenue growth remains strong.

We also compare the reaction to other names reporting, including Semtech and Digital Turbine, which moved higher after stronger beats and better growth signals. The contrast shows how selective the market has become: companies need not only revenue and EPS beats, but also strong guidance, margin durability, and a clear AI spending story.

The bigger takeaway: Zscaler is still growing, but after a major rally, the market wanted perfection. In this environment, even small guidance issues or margin pressure can trigger a major selloff.

Not financial advice. Do your own research.


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