Zscaler stock soars on earnings beat, upbeat guidance — SkimNews
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- Zscaler beat fiscal Q4 estimates with adjusted EPS of $1.19 versus $1.09 expected and revenue of $898 million versus $877 million expected, sending shares soaring on Thursday.
- Revenue climbed 25% year-over-year to $898 million from roughly $719 million a year ago, while the net loss narrowed to $3.37 million (2 cents per share) from $17.58 million (11 cents per share).
- CEO Jay Chaudhry credited the company's Zero Trust cloud security architecture for the beat and told CNBC he is "very bullish" on Zscaler's recently launched platform for AI agent iteration, calling it a "fantastic opportunity with significant barriers to entry" that should accelerate rapidly into 2028 and 2029.
- Annual recurring revenue rose 25% year-over-year to $3.77 billion, beating the $3.75 billion StreetAccount estimate, while AI-security bookings totaled $100 million over the past year and grew 50% sequentially quarter-over-quarter.
- Zscaler's guidance topped estimates across the board: Q1 revenue of $935 million to $939 million versus a $927 million estimate and EPS of $1.15 to $1.16 versus $1.08, plus full-year revenue of $3.91 billion to $3.94 billion versus $3.90 billion expected and adjusted EPS of $4.86 to $4.90 versus $4.60.
- Despite Thursday's rally, Zscaler shares remain down roughly 20% year-to-date even as cybersecurity peers notched new highs; Chaudhry argued the market is "misunderstanding" the company's differentiation, referencing last quarter's worst-ever stock drop that followed a "prudent approach" to guidance and two sales leader departures.
Why it matters: Zscaler's 20% year-to-date slide made it a notable laggard in a cybersecurity sector that otherwise hit record highs, so Thursday's beat is Chaudhry's first real opportunity in a quarter to convince investors his AI-agent security platform deserves a re-rating. With $100 million in AI bookings already booked and management projecting acceleration into 2028-2029, the next test is whether the stock can close the gap with rivals.
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