Zscaler
shares are losing ground in late trading Thursday despite reporting better-than-expected results for its January quarter, and strong guidance for both the April quarter and the rest of the fiscal year.
In late trading, Zscaler is down 7.6% to $223.99
Zscaler results were certain to receive extra scrutiny today following last week’s weaker-than-expected guidance from cybersecurity software rival Palo Alto Network’s, which spurred a sharp selloff across the sector. And while the numbers appeared to be strong, the stock is nonetheless selling off. In late trading Zscsaler shares were 5.5% lower at $228.40.
For the fiscal second quarter ended Jan. 31, Zscaler posted revenue of $525 million, up 35% from a year earlier and ahead of both the company’s guidance range of $505 million to $507 million and the Street consensus forecast as tracked by
FactSet
of $507 million. Billings were $627.6 million, up 27%, above consensus at $610.5 million.
Adjusted profits were 76 cents a share, above both the guidance range of 57 to 58 cents a share, and the Street consensus at 58 cents. Under generally accepted accounting principles the company lost 19 cents a share.
For the April quarter, Zscaler is projecting revenue of between $534 million and $536 million, with adjusted profits of 64 to 65 cents a share; Street consensus had called for $531 million and 58 cents.
For the July 2024 fiscal year, the company now sees revenue of between $2.118 billion and $2.122 billion, with billings of $2.55 billion to $2.57 billion, and adjusted profits of $2.73 to $2.77 a share. Consensus had called for $2.1 billion in revenue, $2.55 billion on billings and profits of $2.49 a share on an adjusted basis.
Previous guidance had been for revenue of $2.09 billion to $2.1 billion, billings of $2.52 billion to $2.56 billion, and adjusted profits of $2.45 to $2.48 a share.
Write to Eric J. Savitz at eric.savitz@barrons.com
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