Zscaler Inc (NASDAQ:ZS) stock is 4.8% lower to trade at $198.53 at last check, after the cloud company's dismal forecast for the fiscal second quarter overshadowed a fiscal first-quarter earnings and revenue beat.
Zscaler Inc ZS reported better-than-expected fiscal first-quarter financial results after the market close on Monday.
U.S. stock futures were mixed this morning, with the Dow futures falling around 0.1% on Monday.
Zscaler's fiscal 2025 guidance is marginally raised, leading to concerns given its high valuation of 36x forward free cash flow. Despite strong fundamentals and a solid balance sheet, ZS's 13% y/y billings growth is underwhelming for investors expecting consistent upgrades. The cybersecurity firm faces stiff competition and must prove its ability to reaccelerate growth to justify its premium valuation.
Zscaler Inc shares tumbled over 7% in pre-market trading on Monday as a slowdown in billings and guidance for the coming quarter appeared to spook investors. Cloud security firm Zscaler had unveiled expectation-beating revenue and earnings for its first financial quarter.
The cybersecurity company posted quarterly earnings of 77 cents a share on sales of $628 million, beating analysts expectations.
Zscaler's Q1 results were mixed, despite the company beating guidance. Weak net customer additions, along with the exit of Zscaler's long-term CFO are particular points of concern. While cash flows are strong, an ongoing growth deceleration which shows no signs of ending is likely to pressure the company's valuation.
Zscaler's Q3 earnings showcased strong financial performance, with revenue up 26% YoY and a record 21% non-GAAP operating margin. The company's innovation-driven strategy and robust customer base, including Fortune 500 and Global 2000 companies, position it well for long-term growth. ZS's raised full-year guidance and strong financial flexibility, backed by a $2.7 billion cash pile, highlight management's confidence in sustained growth.
Zscaler, Inc. (NASDAQ:ZS ) Q1 2025 Earnings Conference Call December 2, 2024 4:30 PM ET Company Participants Ashwin Kesireddy - Vice President, Investor Relations and Strategic Finance Jay Chaudhry - Chairman and Chief Executive Officer Remo Canessa - Chief Financial Officer Conference Call Participants Saket Kalia - Barclays Andrew Nowinski - Wells Forgo Gabriela Borges - Goldman Sachs Brad Zelnick - Deutsche Bank Mike Cikos - Needham Ittai Kidron - Oppenheimer Rob Owens - Piper Sandler Brian Essex - JPMorgan Joel Fishbein - Truist Securities Fatima Boolani - Citigroup Shrenik Kothari - Baird Matt Hedberg - RBC Capital Markets Roger Boyd - UBS Operator Good day, and thank you for standing by. Welcome to the Zscaler First Quarter 2025 Earnings Call.
Manufacturing and Construction data came in favorable this morning, while ZS has beaten Q1 estimates but sells off late trading.
Zscaler (ZS) came out with quarterly earnings of $0.77 per share, beating the Zacks Consensus Estimate of $0.63 per share. This compares to earnings of $0.67 per share a year ago.
Zscaler on Monday raised its annual revenue forecast after beating estimates for quarterly revenue on strong demand for its cybersecurity services, but its shares fell more than 6% in extended trading as its report failed to impress investors.