Zscaler reported strong financial results for its fiscal fourth quarter, with revenue climbing 25% to reach approximately $719 million compared with the prior year. The cloud security company narrowed its net loss to $3.4 million, or 2 cents per share, compared with a net loss of $17.6 million, or 11 cents per share, in the same quarter a year prior. Annual recurring revenue increased 25% year-over-year to $3.77 billion, surpassing StreetAccount’s estimate of $3.75 billion.
Despite the earnings beat, Zscaler’s stock declined on Friday. Chief Executive Jay Chaudhry attributed the company’s strong performance to increased adoption of its Zero Trust cloud security architecture. He stated that demand for cybersecurity tools has intensified amid rising artificial intelligence-related risks. Chaudhry expressed optimism about a newly launched Zero Trust solution designed for AI agents, noting it has achieved early traction and is anticipated to accelerate growth into fiscal years 2028 and 2029. He characterized the opportunity as long-term with meaningful barriers to market entry.
Zscaler’s forward guidance exceeded analyst expectations. For the fiscal first quarter, management projected revenue between $935 million and $939 million and adjusted earnings per share ranging from $1.15 to $1.16, compared with estimates of $927 million in revenue and $1.08 adjusted EPS. Full-year guidance anticipated revenue between $3.91 billion and $3.94 billion against a $3.90 billion estimate, with adjusted EPS expected to range from $4.86 to $4.90 versus a $4.60 per-share projection.
Zscaler’s shares have declined 20% during the year, underperforming other cybersecurity competitors despite the industry’s broad gains fueled by escalating threats from sophisticated cyber attacks and agent-led threats. Chaudhry stressed that Zscaler possesses differentiated core competencies and argued the market may not fully appreciate the company’s position as artificial intelligence agent adoption expands. Bookings related to AI security totaled $100 million over the past year and expanded more than 50% sequentially during the quarter.
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