Zscaler (ZS) reported fiscal second-quarter earnings, revenue and billings that topped estimates. The cybersecurity firm’s revenue guidance for Zscaler stock met expectations.
After the market close on Wednesday, Zscaler reported earnings of 78 cents a share from a year earlier on an adjusted basis, up 24% from a year earlier. Revenue climbed 23% to $647.9 million, the San Jose, Calif.-based firm said.
Zscaler stock analysts expected earnings of 69 cents per share on sales of $634 million.
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Also, fiscal Q4 billings rose 18% to $742.7 million, compared with estimates for $719.6 million.
“Against a high degree of concern on durability of growth, including federal spend, Zscaler delivered a solid quarter and guide,” said BMO Capital Markets analyst Keith Bachman in a report. “Management’s comments around Zero Trust for branch opportunities are intriguing.”
For the current quarter ending in April, Zscaler said it expects revenue of $666 million at the midpoint of guidance, in line with estimates of $666 million.
“Fiscal 2025 revenue guidance was raised to 22% growth versus 21.5% previously and billings guidance was raised to 20.5% growth versus +19.6% previously,” said RBC Capital analyst Matthew Hedberg in a report.
On the stock market today, Zscaler stock rose 3.5% to 203.28 in early trading.
At TD Cowen, analyst Shaul Eyal said in a report: “Zscaler continues to perform well in the large customer cohort, with the number of customers generating annual recurring revenue over $1 million growing 25% year-over-year to 620.”
Zscaler Stock: Sales Shake-Up
Zscaler has brought in a new chief revenue officer, chief marketing officer and other top sales staff as its go-to-market strategy undergoes big changes. Analysts lowered consensus estimates amid the sales organization overhaul.
Heading into the Zscaler earnings release, the cybersecurity stock had advanced 7% in 2024. Also, ZS stock had a Relative Strength Rating of 62 out of a best-possible 99, according to IBD Stock Checkup.
Zscaler provides cloud-based cybersecurity services via 150 data centers worldwide. Zscaler’s web security gateways inspect customers’ data traffic for malware.
Further, the Zscaler Private Access cloud service replaces virtual private networks to support remote work.
Zscaler competes with Palo Alto Networks (PANW) and Microsoft (MSFT) as well as well-funded startup Wiz.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
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