Zscaler Inc. (NASDAQ:ZS) shares are trading lower Friday despite reporting better-than-expected fourth-quarter financial results and issuing strong guidance on Thursday after the market closed.
- Zscaler shares are experiencing downward pressure. What’s driving ZS stock lower?
Q4 Tops Estimates with Strong ARR Growth
Zscaler reported adjusted earnings per share of $1.19, beating the consensus estimate of $1.08. In addition, the company reported revenue of $898.185 million, beating the consensus estimate of $877.364 million.
Annual recurring revenue grew 25% year-over-year to $3.77 billion, of which $246 million was net new ARR during the quarter. Excluding the acquisition of Red Canary, which contributed $141 million in ARR, ARR grew 20% to $3.63 billion and net new ARR grew 17%. Non-GAAP operating margin reached a record 24%.
“AI represents one of the most significant opportunities in Zscaler’s history. By connecting users, workloads, branches, and now agents directly to the applications they need without placing them on the network, we are uniquely equipped to help companies both combat the threats created by agentic AI and securely deploy AI agents and models,” said Jay Chaudhry, CEO, Chairman and Founder of Zscaler.
Q1, FY27 Guidance
Zscaler sees first-quarter adjusted earnings per share of $1.15 to $1.16, versus the consensus estimate of $1.08, and revenue of $935.000 million to $939.000 million, versus the consensus estimate of $927.024 million.
For fiscal-year 2027, the company sees adjusted earnings per share of $4.86 to $4.90, versus the consensus estimate of $4.60, and revenue of $3.908 billion to $3.938 billion, versus the consensus estimate of $3.899 billion.
Zscaler Shares Trade Lower
ZS Price Action: At the time of publication, Zscaler shares are trading 3.35% lower at $171.85, according to data from Benzinga Pro.
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