Zscaler reported quarterly results that beat expectations, driven by rising demand for its cloud cybersecurity solutions incorporating artificial intelligence. For the quarter ended October 31, revenue grew 26% to $788.1m, beating the consensus forecast of $773.8m. EPS came in at 96 cents, above the 86 cents expected. Despite these figures, the stock fell nearly 12% as trading began on Wall Street, as investors judged the group's outlook to be too cautious.
Zscaler raised its full-year guidance, now expecting revenue of between $3.28bn and $3.30bn and EPS of between $3.78 and $3.82, compared with slightly lower previous forecasts. However, according to RBC, this upward revision remains moderate in light of the quarter's performance, which could explain the market's muted reaction. The group continues to benefit from its flexible purchasing program, which supports multi-year contracts with major customers.
The company is establishing itself as a key player in the SASE segment, which merges networking and security into a single platform. This fast-growing market is fuelled by digital transformation, cloud adoption and the need for enhanced protection of IT architectures. Zscaler's strong performance mirrors that of rival Palo Alto Networks, which also recently raised its guidance, confirming a favorable trend across the cybersecurity sector.
