Zscaler reported fiscal third-quarter earnings, revenue and billings that beat Wall Street targets amid lowered expectations. The cybersecurity firm's revenue guidance for Zscaler stock met expectations.
Reported after the market close on Thursday, Zscaler earnings rose 83% to 88 cents a share from a year earlier on an adjusted basis. Revenue climbed 32% to $553.2 million, the San Jose, Calif.-based firm said.
Zscaler stock analysts expected earnings of 66 cents per share on sales of $536 million.
Also, billings rose 30% to $628 million, compared with estimates for $583.7 million.
"While the sales momentum was particularly driven by continued demand for the Zero Trust Exchange platform, we expect demand to remain strong over the next months. Zscaler is seeing rising customer interest for its emerging products and continued traction in federal government," said TD Cowen analyst Shaul Eyal in a report.
Zscaler Stock: Sales Guidance Meets Views
For the current quarter ending in July, Zscaler said it expects revenue of $566 million at the midpoint of guidance, in line with estimates.
"We are impressed with growing revenue diversification, which we think will help support durable growth through upsell, cross-sell and larger lands (deals)," said BMO Capital Markets analyst Keith Bachman in a report.
On the stock market today, Zscaler stock popped 11.9% to 175.31 in morning trading.
Heading into the Zscaler earnings release, the cybersecurity stock had retreated 27% in 2024. Also, ZS stock had a Relative Strength Rating of only 22 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 and Microsoft as well as well-funded startup Wiz. In February, Zscaler's Chief Operating Officer Dali Rajic left to join Wiz in the same role.
Zscaler stock is in the IBD Computer-Software Security group, which ranks No. 87 out of 197 groups tracked.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
