Zscaler stock soared on Thursday after the cloud security company beat Wall Street’s fiscal fourth-quarter estimates as rising artificial intelligence risk spurred urgent demand for cyber tools.
Here’s how the company performed compared to LSEG estimates:
- Earnings per share: $1.19 adjusted vs. $1.09 expected
- Revenue: $898 million vs. $877 million expected
Revenue jumped 25% from about $719 million last year. Zscaler reported a net loss of $3.4million, a loss of 2 cents per share, up from a net loss of $17.6 million, a loss of 11 cents per share, a year ago.
CEO Jay Chaudhry highlighted the company’s Zero Trust cloud security architecture and innovative technology as driving forces behind this quarter’s beat.
He told CNBC he’s “very bullish” on the recently launched Zero Trust iteration for AI agents, which is gaining early momentum and is expected to accelerate rapidly into fiscal years 2028 and 2029.
“It’s a longer-term opportunity, but I think it’s a fantastic opportunity with significant barriers to entry,” Chaudhry said.
Annual recurring revenue rose 25% from a year ago to $3.77 billion, beating a $3.75 billion estimate from StreetAccount.
Cybersecurity stocks have skyrocketed this year as increasingly sophisticated cyber models and the rise of agent-led attacks force businesses to adopt new security tools.
While competitors have notched new highs this year, Zscaler shares have plummeted 20%. Last quarter, the stock recorded its worst day ever after management said it was taking a “prudent approach” to guidance following two sales leader departures.
But Chaudhry says the market is misunderstanding Zscaler’s differentiation play.
“The core competency we bring to the table is pretty unique, and as the adoption of AI agents happens, the market will recognize more and more that Zscaler is a critical player,” he said.
Like other cyber executives, Chaudhry views security for AI as one of the biggest opportunities. Over the last year, bookings totaled $100 million and have grown 50% sequentially, quarter over quarter, he said.
Zscaler’s guidance also beat estimates. The company expects $935 million to $939 million in revenue for the first quarter and adjusted EPS of $1.15 to $1.16. That beat a revenue estimate of $927 million and adjusted EPS of $1.08 per share
For the full year, the company projects revenue in the range of $3.91 billion and $3.94 billion, compared to a $3.90 billion estimate. Adjusted EPS is expected to range between $4.86 and $4.90, versus a $4.60 per-share estimate.
