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Zscaler Announces Pricing of $1.5 Billion Offering of 0.00% Convertible Senior Notes Due 2028

SAN JOSE, Calif., June 30, 2025 (GLOBE NEWSWIRE) -- Zscaler, Inc. (NASDAQ:ZS) today announced the pricing of $1.5 billion aggregate principal amount of 0.00% convertible senior notes due 2028 (the "notes") in a private offering to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). Zscaler also granted the initial purchasers of the notes a 13-day option to purchase up to an additional $225 million aggregate principal amount of notes. The offering is expected to close on July 3, 2025, subject to customary closing conditions.

The notes will be senior unsecured obligations of Zscaler. The notes will not bear regular interest and the principal amount of the notes will not accrete. The notes will mature on July 15, 2028, unless earlier converted or repurchased. The initial conversion rate will be 2.2752 shares of Zscaler's common stock per $1,000 principal amount of notes (equivalent to an initial conversion price of approximately $439.52 per share). The initial conversion price of the notes represents a conversion premium of approximately 40% over the closing price of Zscaler's common stock on June 30, 2025. The notes will be convertible under certain circumstances into cash, shares of Zscaler's common stock or a combination of cash and shares of Zscaler's common stock, at Zscaler's election.

Zscaler estimates that the net proceeds from the offering will be approximately $1.48 billion (or approximately $1.70 billion if the initial purchasers exercise their option to purchase additional notes in full), after deducting the initial purchasers' discount and estimated offering expenses payable by Zscaler. Zscaler intends to use $171.0 million of the net proceeds from the offering to pay the cost of the capped call transactions described below. Zscaler intends to use the remainder of the net proceeds for general corporate purposes, which may include working capital, capital expenditures, and potential acquisitions and strategic transactions.

Further, in connection with the pricing of the notes, Zscaler entered into privately negotiated capped call transactions with certain of the initial purchasers and/or their respective affiliates and other financial institutions (the "option ...