Zscaler Inc., a prominent player in the cybersecurity sector, witnessed a remarkable turnaround in its stock performance during after-hours trading following the release of its fiscal third-quarter results. Despite facing headwinds in the broader software sector, with a 5% decline in its stock price during regular trading hours, Zscaler’s shares surged by an impressive 16% after the earnings announcement.
The company’s stellar financial performance for the third quarter played a pivotal role in this dramatic shift. Zscaler reported total revenue of $553 million, surpassing analyst expectations of $536 million. This revenue figure marked a significant increase compared to the same period the previous year when the company generated $482.3 million in revenue. Additionally, Zscaler’s calculated billings soared to $628 million, representing a robust 30% year-over-year growth, outpacing analyst forecasts of $584 million.
Jay Chaudhry, the CEO of Zscaler, attributed the company’s exceptional performance to the growing interest among customers in its Zero Trust Exchange platform. He highlighted that an increasing number of enterprises are recognizing the value proposition of Zscaler’s platform, leading to heightened demand for its services. Chaudhry outlined the company’s strategic initiatives aimed at accelerating innovation, expanding its platform offerings, and enhancing its go-to-market strategy to support its ambitious growth targets, aiming to scale the business to $5 billion and beyond in annual recurring revenue.
In terms of profitability, Zscaler delivered a notable improvement, reporting a net income of $19 million, or 12 cents per share, compared to a loss of $46 million, or 32 cents per share, in the corresponding quarter of the previous year.
Looking ahead to the fiscal fourth quarter, Zscaler provided an optimistic outlook, forecasting revenue in the range of $565 million to $567 million, in line with analyst expectations. Furthermore, the company projected adjusted earnings per share between 69 cents and 70 cents, slightly exceeding analysts’ estimates of 68 cents.
Overall, Zscaler’s robust quarterly performance, coupled with its upbeat guidance for the future, underscored its continued momentum in the cybersecurity market. The company’s ability to capitalize on the increasing demand for its services, coupled with its strategic initiatives to drive growth, resonated positively with investors, leading to a significant surge in its stock price during after-hours trading.