Worried about AI-driven threats, customers opened their wallets, and it showed. Zscaler delivered adjusted earnings of $1.19 per share, surpassing the LSEG consensus of $1.09, on revenue of $898 million against expectations for $877 million. Sales rose 25% from roughly $719 million a year ago.
The company still ran a small net loss at $3.4 million, which works out to negative 2 cents per share, an improvement from the prior year's $17.6 million loss, or 11 cents per share. Annual recurring revenue climbed 25% year over year to $3.77 billion, topping a $3.75 billion StreetAccount estimate. Bookings came in at $100 million for the past 12 months, and they climbed by more than 50% sequentially in the most recent quarter.
Zscaler's outlook cleared the bar. For fiscal Q1, it projected revenue between $935 million and $939 million and guided to adjusted EPS in a range of $1.15 to $1.16. Wall Street had penciled in $927 million for revenue and $1.08 per share in adjusted EPS.
For the full fiscal year, the company sees revenue of $3.91 billion to $3.94 billion, ahead of a $3.90 billion forecast, and expects adjusted EPS between $4.86 and $4.90, above a $4.60 per-share estimate.
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Management credited momentum in its Zero Trust cloud security approach and newer tech for the quarter's strength. CEO Jay Chaudhry told CNBC he is "very bullish" on the newly launched Zero Trust build for AI agents, saying it has early traction and should pick up speed into fiscal years 2028 and 2029. "It's a longer-term opportunity, but I think it's a fantastic opportunity with significant barriers to entry," he said.
Chaudhry also argued the market is underappreciating Zscaler's edge: "The core competency we bring to the table is pretty unique, and as the adoption of AI agents happens, the market will recognize more and more that Zscaler is a critical player."
Cybersecurity names have surged this year as more advanced models and agent-led attacks push companies to upgrade defenses. While many peers have notched fresh highs, Zscaler shares have plummeted 20%, and the stock suffered its worst day ever last quarter after management adopted a "prudent approach" on guidance in the wake of two sales leader departures.
Today's beat and above-consensus guide, plus AI-focused product efforts set to build through 2028 and 2029, explain why shares bounced. If you are tracking how AI reshapes corporate spending, Zscaler just offered a clear signal about where budgets are headed.
