Zscaler, Inc. (ZS) Earnings Call Transcript & Summary

Good day, and welcome to the Zscaler Inc. Fiscal 2020 Annual Meeting of Stockholders. I would now like to turn the conference over to Jay Chaudhry. Please go ahead.

Good afternoon. I'm Jay Chaudhry, CEO and Chairman of the Board of Directors of Zscaler Inc., and it is a pleasure to welcome you to Zscaler's Annual Meeting of Stockholders. The meeting is now called to order. I will act as Chairperson of this meeting. I've asked Robert Schlossman, our Chief Legal Officer and Secretary, to record the minutes of this meeting. Before proceeding further, let me first introduce the other directors and officers of the company. Our current directors other than myself are, Karen Blasing, Andrew Brown, Scott Darling, Charles Giancarlo, David Schneider and Amit Sinha. The officers here with us today are Remo Canessa, our Chief Financial Officer; Amit Sinha, who, in addition to being a Director, is also our President of Research and Development, Operations and Customer Service and Chief Technology Officer; Robert Schlossman, our Chief Legal Officer and Secretary; and Bill Choi, our Senior Vice President of Investor Relations. Also with us are Courtney Blum and Sachi Patel, representing PricewaterhouseCoopers LLP; Mark Baudler, representing Wilson Sonsini Goodrich & Rosati, P.C., our outside Corporate Counsel; and Kathy Wheadon as a representative of Broadridge Financial Solutions, our Inspector of Elections. I will now turn the meeting over to Robert Schlossman, who will conduct the formal portion of the meeting.

Thank you, Jay. [Operator Instructions] The annual meeting is being held for the following purposes: number one, to elect 2 Class III directors to hold office until the 2023 annual meeting of stockholders or until their successors are elected, qualified subject to their earlier death, resignation or removal; and number two, to ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for our fiscal year ending July 31, 2021; and number three, to approve on an advisory basis, the compensation of our named executive officers. Each of these proposals is described in detail in the company's proxy statement dated November 25, 2020. In order to ensure that the business of the meeting proceeds in an orderly fashion, we ask if you please observe the rules and procedures provided to you on the online portal. The annual meeting is being held in accordance with the company's bylaws and Delaware law. During the formal meeting, we will address the matters described in the proxy statement. We will then complete the balloting process. An announcement will be made regarding the preliminary results and then the meeting will be adjourned. As a reminder, any submitted questions are to be restricted to the procedures for the meeting and the proposals under consideration. Thank you for your understanding. I have proof by affidavit that the notice of Internet availability of proxy materials was mailed on or about November 25, 2020, to all stockholders of record at the closing of business on November 11, 2020, which is the record date for the meeting. The affidavit, together with copies of the notice of Internet availability of proxy materials, proxy statement and proxy will be filed with the records of the meeting. We have appointed Kathy Wheadon, a representative of Broadridge Financial Solutions, to act as Inspector of Election for this annual meeting. The Inspector of Election has signed an oath of office, which will be filed with the minutes of this meeting. The Inspector of Election has advised me that we have present at the meeting sufficient voting power of the stock issued and outstanding and entitled to vote on the business before the meeting to constitute a quorum. Therefore, the meeting is duly constituted, and we will proceed with business. I will now briefly describe the voting procedures. You may vote by proxy and by online ballot. Each stockholder's entitled to one vote for each share of our common stock held as of the record date. If you have previously turned in your proxy and you do not intend to change your vote, you do not need to complete another proxy or vote online. Your vote will be counted as indicated in your proxy. If you have previously turned in your proxy and you would like to change your vote, you can change your vote by voting through the meeting portal during this meeting. If you are eligible to vote and have not submitted your proxy or if you want to change your vote, please follow the instructions provided on the portal for the meeting. The votes cast today will be counted in the final tally along with the proxies previously received. I will announce the preliminary results of the voting at the end of the meeting. If there are any questions regarding the voting procedures, we will now pause to allow them to be entered into the online portal. No questions were received, and we will now continue with the business of this meeting. It is now 1:07 p.m. Pacific Time on January 6, 2021, and the polls for each matter to be voted on at this meeting are now open. The first item of business is the election of directors. Two Class III directors will be elected at today's meeting. The 2 director nominees receiving the highest number of votes represented by the building power of the shares present at this meeting and entitled to vote thereon will be elected as directors. Directors elected at today's meeting will hold office until the 2023 Annual Meeting of Stockholders or until their successors are elected and qualified subject to their earlier death, resignation or removal. As indicated in the company's proxy statement, Jay Chaudhry and Amit Sinha have been nominated by the company's Board of Directors to serve as Class III directors. Mr. Chaudhry and Dr. Sinha are currently serving as directors of the company, with Mr. Chaudhry also serving as the Chairman of the Board of Directors. The Board of Directors recommends that stockholders vote in favor of each of these 2 nominees, and the proxies solicited by the Board will be voted in favor of these nominees. If there are any questions concerning director elections for this meeting, we will now pause to allow them to be entered into the online portal. No questions were received, and we will now continue with the business of the meeting. The next item of business is to ratify the appointment the PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the fiscal year ending July 31, 2021. The Audit Committee of the Board approved PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the fiscal year ending July 31, 2021. The Board of Directors is now asking the stockholders to ratify this selection. Approval of this proposal requires the affirmative vote of the majority of the voting power of shares present, in person or represented by proxy at the meeting and entitled to vote thereon. The Board of Directors recommends that stockholders vote in favor of this proposal and the proxy solicited by the Board will be voted in favor of this proposal. Courtney Blum and Sachi Patel are present from PricewaterhouseCoopers and are available to answer any questions that you may have at this time. If there are any questions concerning this proposal, we will now pause to allow them to be entered into the online portal. No questions were received, and we will now continue with the business of the meeting. The next item of business is to approve, on an advisory basis, the compensation of our named executive officers. Approval of this proposal requires the affirmative vote of the majority of the voting power of the shares present in person or represented by proxy at the meeting and entitled to vote thereon. This is a nonbinding advisory vote as described in the proxy statement. The Board of Directors recommends that stockholders vote in favor of this proposal, and the proxies solicited by the Board will be voted in favor of this proposal. If there are any questions concerning this proposal, we will now pause to allow them to be entered into the online portal. No questions were received, and we will now continue with the business of this meeting. If you have not voted and intend to vote, please do so now in accordance with the instructions provided. You must submit your vote in order for it to be counted as the polls will close momentarily. The Inspector of Election will not accept ballots, proxies or votes or any changes or revocations submitted after the closing of the polls. We will now pause to allow any final votes to be submitted. [Voting]

It is now 1:11 p.m. on January 6, 2021, and the polls for each matter to be voted on at this meeting are now closed. No additional ballots, proxies or votes and no changes or revocations will be accepted. We will now pause while the preliminary results are confirmed. At this time, I will provide you with the preliminary report on the voting results as provided to me by the Inspector of Election. With regards to Proposal No. 1, Director Nominees, Jay Chaudhry and Amit Sinha, received the highest number of affirmative votes and have been elected to serve as Class III directors. With regard to Proposal No. 2, the appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the fiscal year ending July 31, 2021, has been ratified by a majority of the voting power present and entitled to vote thereon. With regard to Proposal No. 3, the advisory resolution to approve the compensation of the company's named executive officers has been approved by a majority of the voting power present and entitled to vote thereon. These are the preliminary results of voting. The final count may vary following final examination of proxies and ballots. The final results of voting, including any votes recorded during this meeting, will be set forth in the report of the Inspector of Election and will be included in the minutes of the meeting. The final results will also be reported in a Form 8-K to be filed with the Securities and Exchange Commission. The formal portion of the meeting is now adjoined. With the formal business of the meeting now completed, I turn the meeting back over to Jay Chaudhry, Zscaler's Chief Executive Officer and Chairman of the Board of Directors. Jay?

Thanks, Robert. I want to thank all of you for attending today's annual meeting. We very much appreciate your attendance. And as always, we thank you for your continued support of Zscaler. The meeting is now adjourned.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.