Zscaler Stock Rises on Q4 Earnings Beat and Upbeat Guidance

Fiscal Fourth-Quarter Performance Exceeds Expectations

Cloud security company Zscaler announced fiscal fourth-quarter results that surpassed Wall Street estimates, leading to a rise in its stock. The company reported adjusted earnings per share of $1.19 against an expected $1.09, and revenue of $898 million compared to an $877 million estimate. Revenue increased 25% year-over-year from approximately $719 million.

Growth Driven by Zero Trust and AI Security Demand

CEO Jay Chaudhry attributed the strong quarterly performance to the adoption of Zscaler's Zero Trust cloud security architecture and its technology. Chaudhry highlighted early momentum for a recently launched Zero Trust iteration for AI agents, which he expects to accelerate significantly into fiscal years 2028 and 2029. Annual recurring revenue also rose 25% from the previous year, reaching $3.77 billion, exceeding the $3.75 billion estimate.

Market Opportunity in AI Security

Chaudhry emphasized the unique competency of Zscaler in the evolving cybersecurity landscape, particularly with the rise of AI agents. He views security for AI as a significant opportunity, noting that bookings totaled $100 million over the last year and grew more than 50% sequentially this quarter. This comes as businesses increasingly adopt new security tools due to sophisticated cyber models and agent-led attacks.

Upbeat Financial Guidance

Zscaler also provided guidance that exceeded analyst expectations. For the fiscal first quarter, the company projects revenue between $935 million and $939 million, and adjusted EPS of $1.15 to $1.16, both above current estimates. For the full fiscal year, Zscaler anticipates revenue in the range of $3.91 billion to $3.94 billion and adjusted EPS between $4.86 and $4.90, also surpassing previous estimates.