Zscaler reported financial results that surpassed Wall Street estimates, yet the company’s shares fell on the day following the announcement. The cloud security firm delivered revenue growth of 25% compared to the prior year, reaching approximately $719 million in the quarter. The company posted a net loss of $3.4 million, or 2 cents per share, an improvement from a net loss of $17.6 million, or 11 cents per share, recorded one year earlier.
Annual recurring revenue climbed 25% year-over-year to $3.77 billion, surpassing a StreetAccount estimate of $3.75 billion. Chief Executive Officer Jay Chaudhry attributed the quarterly performance to growing adoption of the company’s Zero Trust cloud security architecture and its technological innovations. He expressed particular optimism regarding a recently introduced Zero Trust offering designed for artificial intelligence agents, noting that this segment is expected to expand significantly in the coming fiscal years.
Cybersecurity equities broadly have gained considerable ground this year amid rising concerns about sophisticated cyber threats and agent-led attacks that have prompted organizations to invest in updated security solutions. Despite this industry momentum, Zscaler shares have declined 20% during the period, following a steep drop in the previous quarter after the company adopted a cautious posture on guidance and experienced departures of two sales executives.
Zscaler provided forward-looking guidance that exceeded analyst expectations. For the upcoming fiscal first quarter, the company projected revenue between $935 million and $939 million with adjusted earnings per share of $1.15 to $1.16, compared to consensus estimates of $927 million in revenue and $1.08 in adjusted EPS. Looking to the full year, Zscaler anticipated revenue in the range of $3.91 billion to $3.94 billion against a $3.90 billion estimate, with adjusted EPS guidance of $4.86 to $4.90 versus a $4.60 per-share projection. Bookings related to AI security totaled $100 million over the trailing year and expanded more than 50% sequentially.
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