Zscaler Posts Solid Q4 Earnings Beat

Zscaler reported fiscal fourth-quarter earnings, revenue, and billings that beat Wall Street targets on Tuesday. The cybersecurity firm’s results came amid significant changes in its sales organization. However, Zscaler’s fiscal 2025 guidance underwhelmed investors.

This sent shares down more than 11% in extended trading. “Zscaler delivered a good finish to the fiscal year with a beat across the board while fiscal 2025 guidance was a bit mixed,” said RBC Capital analyst Matthew Hedberg in a report. Zscaler earnings rose 37% to 88 cents a share from a year earlier on an adjusted basis.

Revenue climbed 30% to $592.9 million, the San Jose, Calif.-based firm said. Fiscal Q4 billings also rose 27% to $910.8 million. This compared with estimates of $892.5 million.

For the current quarter, Zscaler said it expects revenue of $605 million at the midpoint of guidance. Analysts had estimated $603 million.

Zscaler’s earnings and 2025 guidance

For fiscal 2025, which starts with the current October-ending quarter, Zscaler forecast EPS of $2.84. This was well below estimates of $3.33. The company predicted revenue of $2.61 billion, slightly below estimates of $2.62 billion.

Zscaler has recently appointed a new chief revenue officer, chief marketing officer, and other top sales staff. This comes as its go-to-market strategy undergoes substantial revisions. Analysts have adjusted their consensus estimates amid the sales organization overhaul.

Heading into the Zscaler earnings release, the cybersecurity stock had already retreated 10% in 2024. Also, ZS stock had a Relative Strength Rating of 69 out of a best-possible 99. Zscaler provides cloud-based cybersecurity services through 150 data centers worldwide.

Its web security gateways inspect customers’ data traffic for malware. Additionally, the Zscaler Private Access cloud service replaces virtual private networks to support remote work. Zscaler competes with companies like Palo Alto Networks and well-funded startup Wiz.