Zscaler reported better-than-expected financial results for its fiscal fourth quarter, though shares declined on the day of the announcement. The cloud security company generated revenue growth of 25% compared to the prior year, reaching approximately $719 million. The firm posted a net loss of $3.4 million, equivalent to a loss of 2 cents per share, representing a significant improvement from the prior-year loss of $17.6 million or 11 cents per share.
CEO Jay Chaudhry attributed the quarterly outperformance to growing adoption of the company’s Zero Trust cloud security architecture and cited rising demand driven by artificial intelligence-related security concerns. He stated in an interview that he maintains a bullish outlook on the company’s recently introduced Zero Trust solution designed for AI agents, which he characterized as showing early traction and anticipated to accelerate during the following two fiscal years. Annual recurring revenue climbed 25% year-over-year to $3.77 billion, surpassing a $3.75 billion projection from StreetAccount.
The company’s forward-looking guidance also exceeded analyst estimates. For the upcoming fiscal first quarter, management projected revenue between $935 million and $939 million alongside adjusted earnings per share of $1.15 to $1.16, compared to consensus expectations of $927 million in revenue and $1.08 in adjusted EPS. Full-year projections called for revenue in the range of $3.91 billion to $3.94 billion, ahead of the $3.90 billion estimate, with adjusted EPS expected between $4.86 and $4.90 against a $4.60 estimate.
Despite these positive results, Zscaler shares have underperformed the broader cybersecurity sector this year, declining 20% while competitors reached new highs. Management attributed some pressure to a cautious guidance approach implemented following departures of sales leaders in the previous quarter. Chaudhry emphasized that the company possesses distinctive capabilities that will become increasingly recognized as artificial intelligence agent adoption accelerates across enterprises.
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