Z scaler Stocks soared Thursday after the cloud security company beat Wall Street’s fourth-quarter earnings estimates as rising artificial intelligence risks 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 Earnings: $898 million vs. $877 million expected
Sales increased 25% from last year’s approximately $719 million. Zscaler reported a net loss of $3.4 million, or a loss of 2 cents per share, widening from a net loss of $17.6 million, or a loss of 11 cents per share, a year ago.
CEO Jay Chaudhry highlighted the company’s zero-trust cloud security architecture and adoption of innovative technology as driving the quarterly beat.
He told CNBC he was “very bullish” on the recently launched Zero Trust implementation for AI agents. This is gaining momentum in the early stages and is expected to accelerate rapidly into FY2028 and FY2029.
“This is a long-term opportunity, but I think it’s a great opportunity with high barriers to entry,” Chaudhry said.
Annual recurring revenue rose 25% year over year to $3.77 billion, beating StreetAccount’s forecast of $3.75 billion.
Cybersecurity stocks have soared this year as increasingly sophisticated cyber models and an increase in agent-driven attacks are forcing companies to adopt new security tools.
Zscaler stock has plummeted 20% while its competitors have hit new highs this year. Last quarter, the stock had its worst day ever after management took a “cautious approach” to guidance following the departure of two sales leaders.
But Chaudhry says the market is missing the point of Zscaler’s differentiation strategy.
“The core competencies we offer are quite unique, and as adoption of AI agents increases, the market will increasingly recognize Zscaler as a significant player,” he said.
Like other cyber executives, Chaudhry sees AI security as one of the biggest opportunities. Total bookings reached $100 million last year and continued to grow by more than 50% this quarter.
Zscaler’s guidance also exceeded expectations. For the fiscal first quarter, the company expected revenue of $935 million to $939 million and adjusted EPS of $1.15 to $1.16. This exceeded revenue estimates of $927 million and adjusted EPS of $1.08 per share.
For the full year, the company expects sales to be in the range of $3.91 billion to $3.94 billion, exceeding expectations of $3.9 billion. Adjusted EPS is expected to be in the range of $4.86 to $4.90, beating the $4.60 per share estimate.
