Zscaler's stock rockets as upbeat earnings offer relief to cybersecurity sector

By Emily Bary

Profit forecast tops the consensus view

After dropping about 5% in Thursday's regular session during a software-sector rout, Zscaler Inc.'s stock surged 16% in the extended session.

That after-hours movement came as the cybersecurity company topped expectations with its fiscal third-quarter results.

Zscaler (ZS) posted revenue of $553 million, up from $482.3 million a year before. Analysts tracked by FactSet were modeling $536 million.

Calculated billings were $628 million, up 30% from a year earlier, whereas analysts had been calling for $584 million.

"We delivered an outstanding quarter driven by growing customer interest in our Zero Trust Exchange platform," Chief Executive Jay Chaudhry said in a release.

He sees "an increasing number of enterprises" coming on board to Zscaler's platform. "To meet this demand, we are accelerating innovation, expanding our platform and building a strong go-to-market team to scale our business to $5 billion and beyond in [annual recurring revenue]," Chaudhry added.

The company's net income amounted to $19 million, or 12 cents cents a share, whereas it posted a loss of $46 million, or 32 cents a share, in the year-earlier period.

For the fiscal fourth quarter, Zscaler models $565 million to $567 million in revenue, while the FactSet consensus called for $565 million. The company's bottom-line outlook calls for 69 cents to 70 cents in adjusted earnings per share. Analysts were modeling 68 cents.

-Emily Bary

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05-30-24 2022ET

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