Zscaler falters after issuing a light earnings forecast

Jay Chowdhury, founder and CEO of Zscaler Inc.

David Paul Morris | Bloomberg | Getty Images

Cyber ​​security software maker Zscaler Its shares saw an 18% drop Thursday after the company released quarterly earnings guidance that was slightly lower than analysts had expected.

This move erased 10% gains during regular trading, as Cyber ​​Security stocks are trading higher On concerns about cyber-attacks related to the conflict between Russia and Ukraine, and with the market as a whole taking off Marching late in the day after an early landing.

Here’s how the company did:

  • gains: 13 cents a share, adjusted, versus 11 cents a share, as expected by analysts, according to Refinitiv.
  • Revenues: According to Refinitiv, it was $255.6 million, compared to $242 million that analysts had expected.

Zscaler said revenue rose nearly 63% in the quarter that ended Jan statment. It was the company’s fastest growth in three years, CEO Jay Choudhury said in the statement. But it posted a net loss of $100.4 million, expanding from $67.5 million in the same quarter last year.

Existing customers spend more on Zscaler products. “Once we get involved, we win almost every time,” Chaudhry said in a conference call with analysts.

Meanwhile, new customers are coming overseas — the company has added more than 560 customers who have paid more than $100,000 annually in the past 12 months, Remo Canesa, the company’s chief financial officer, said on the call. Chowdhury said part of the growth is coming from purchasing Zscaler software through Amazon and Microsoft cloud marketplaces.

In terms of guidance, Zscaler called 10 cents to 11 cents per share in adjusted fiscal third-quarter earnings and $270 million to $272 million in revenue. Analysts polled by Refinitiv expected 11 cents in adjusted earnings per share and $256.7 million in revenue.

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For the full fiscal year, Zscaler said it sees 54 cents to 56 cents in adjusted earnings per share and revenue of $1.045 billion to $1.05 billion, which drives revenue growth roughly 56% into the middle of the range. That compares with Refinitiv’s consensus of 52 cents in adjusted earnings per share and $1.01 billion in revenue.

For the year, despite the after-hours movement, Zscaler is down 18%, compared to a 10% decline in the S&P 500.

Watch: Wedbush’s Dan Ives Picks Zscaler, Palo Alto, and Tenable as Top Cybersecurity Picks for 2022

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