Zscaler delivered financial results that exceeded Wall Street projections during its fiscal fourth quarter, though equity markets responded negatively to the announcement on Friday. The company reported revenue of approximately $719 million, representing 25% growth compared to the prior year period. Net losses narrowed substantially, with the company posting a $3.4 million loss, or 2 cents per share, compared to a $17.6 million loss, or 11 cents per share, in the corresponding quarter a year prior.
Annual recurring revenue climbed 25% year-over-year to $3.77 billion, surpassing StreetAccount’s estimate of $3.75 billion. Management attributed the strong performance to increasing adoption of the company’s Zero Trust cloud security architecture and elevated demand driven by rising artificial intelligence-related security risks. Chief Executive Jay Chaudhry emphasized the strategic importance of the recently introduced Zero Trust offering designed for AI agents, characterizing it as a significant long-term opportunity with substantial competitive barriers to entry.
Bookings related to AI security reached $100 million over the past year and expanded more than 50% sequentially during the recent quarter. Chaudhry indicated confidence that market participants would increasingly recognize Zscaler’s critical role as artificial intelligence agent adoption accelerates across industries. The executive noted that the company’s core competencies represent a unique value proposition in the evolving security landscape.
Looking ahead, Zscaler provided guidance that exceeded analyst expectations. For the upcoming fiscal first quarter, the company projected revenue between $935 million and $939 million alongside adjusted earnings per share of $1.15 to $1.16, both figures surpassing Wall Street estimates. For the full year, management anticipated revenue of $3.91 billion to $3.94 billion and adjusted earnings per share between $4.86 and $4.90. Despite the strong earnings and forward-looking projections, Zscaler shares declined, with the stock down approximately 20% for the year to date as competitors in the cybersecurity sector achieved new highs.
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