Zscaler’s stock rose on Thursday following the cloud security provider’s fiscal fourth-quarter earnings results, which topped analyst expectations amid growing enterprise demand for artificial intelligence-related security solutions.
The company reported revenue of approximately $719 million, representing a 25% increase from the prior year. Net losses narrowed substantially to $3.4 million, or 2 cents per share, compared to a net loss of $17.6 million, or 11 cents per share, in the year-ago period. Annual recurring revenue climbed 25% to $3.77 billion, surpassing a StreetAccount estimate of $3.75 billion. Chief Executive Jay Chaudhry emphasized that adoption of the company’s Zero Trust cloud security architecture and newly developed technology drove the quarterly performance.
Chaudhry indicated particular optimism regarding a recently introduced Zero Trust offering designed for AI agents, stating the opportunity carried “significant barriers to entry” and expected acceleration in coming fiscal years. He noted that bookings related to AI security totaled $100 million over the past year and expanded more than 50% during the most recent quarter on a sequential basis.
Zscaler’s forward guidance also exceeded analyst expectations. 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, topping consensus estimates of $927 million in revenue and $1.08 per share. Full-year guidance called for revenue in a range of $3.91 billion to $3.94 billion, above the $3.90 billion consensus view, with adjusted earnings per share expected between $4.86 and $4.90 versus a $4.60 estimate.
The stock gain came despite shares having declined 20% earlier in the year, including significant losses following prior management commentary on sales leadership changes. Chaudhry maintained that the market underestimated Zscaler’s competitive positioning as enterprise adoption of AI agents accelerates.
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