Zscaler delivered financial results that exceeded Wall Street expectations, yet the company’s share price fell on the day results were announced. The cloud security firm reported fiscal fourth-quarter revenue of approximately $719 million, representing 25% growth from the prior year. The company posted a net loss of $3.4 million, equivalent to a loss of 2 cents per share, compared with a net loss of $17.6 million, or 11 cents per share, in the same quarter the previous year.
Executive leadership attributed the results to increased adoption of the company’s Zero Trust cloud security framework and demand driven by rising artificial intelligence-related security risks. Chief Executive Officer Jay Chaudhry indicated strong confidence in the company’s prospects, particularly regarding a newly launched Zero Trust offering designed for AI agents. He stated the product was experiencing early momentum and anticipated significant growth in coming fiscal years. The executive characterized the opportunity as substantial and noted substantial competitive barriers to entry in this segment.
Annual recurring revenue reached $3.77 billion, up 25% year-over-year and exceeding a $3.75 billion estimate. The cybersecurity sector overall experienced significant momentum throughout the year as businesses responded to increasingly sophisticated cyber threats and agent-led attacks by expanding security investments. Despite this broader industry strength, Zscaler’s stock had declined approximately 20% year-to-date, having experienced a particularly difficult trading session following prior management guidance that reflected a cautious stance after the departure of two sales leaders.
The company provided guidance for the fiscal first quarter projecting revenue between $935 million and $939 million, surpassing an estimate of $927 million, with adjusted earnings per share between $1.15 and $1.16, exceeding a $1.08 estimate. For the full fiscal year, the company anticipated revenue in the range of $3.91 billion to $3.94 billion, above the $3.90 billion estimate, with adjusted earnings per share expected between $4.86 and $4.90, beating a $4.60 per-share estimate. Bookings related to artificial intelligence security reached $100 million over the prior year and experienced sequential growth exceeding 50% in the most recent quarter.
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