Core Insights - Zscaler, Inc. (NASDAQ:ZS) experienced a significant decline of 13.03% on Wednesday, closing at $251.97, as investors engaged in profit-taking ahead of the Thanksgiving holiday after two days of gains [1] Financial Performance - The company reported a narrowed net loss of 3.7% to $11.6 million from $12.05 million year-on-year, while revenues increased by 25% to $788 million from $627.9 million [2] - For the full fiscal year, Zscaler anticipates revenues between $3.282 billion and $3.301 billion, with annual recurring revenues projected between $3.698 billion and $3.718 billion. The company also targets non-GAAP operating income of $732 million to $740 million and earnings per share (EPS) of $3.78 to $3.82 [3] - In the second quarter, revenues are expected to be between $797 million and $799 million, with non-GAAP income from operations targeted at $172 million to $174 million and EPS projected at $0.89 to $0.90 [4] Market Position and Strategy - The Chairman and CEO of Zscaler, Jay Chaudhry, highlighted strong demand for their Zero Trust and AI Security platform, noting over $3.2 billion in Annual Recurring Revenue, which has grown over 25% year-on-year [5] - Zscaler is recognized for pioneering Zero Trust security and is integrating recently acquired SPLX technology with its AI Security offerings to address emerging security challenges [6]

Core Viewpoint - Zscaler reported strong fiscal first-quarter results with earnings and sales exceeding Wall Street expectations, yet the stock price declined due to high market expectations prior to the report [1][2][4]. Financial Performance - Zscaler earned an adjusted 96 cents per share for the quarter ending October 31, a 25% increase from the previous year, surpassing analyst expectations of 86 cents [2]. - Sales rose 26% to $788 million, exceeding analyst estimates of $773 million [2]. - For the current quarter, Zscaler guided for sales of $798 million, slightly above the analyst forecast of $796 million, with earnings per share guidance between 89 cents and 90 cents aligning with estimates [3]. Market Response - Despite positive quarterly performance, Zscaler's stock fell over 10% to $258.80, contributing to a 21% decline in November, although it remains up 44% year-to-date [4][8]. - Analysts expressed mixed sentiments; while some noted the results met buy-side expectations, others highlighted the need for clearer disclosures regarding the performance of the recently acquired Red Canary [6][7]. Competitive Landscape - Zscaler operates in the cloud-based cybersecurity sector, competing with companies like Palo Alto Networks, Cloudflare, and Fortinet [5]. - The company is recognized for its Secure Access Service Edge (SASE) offering, which is crucial for securing corporate networks [5]. Analyst Insights - Morgan Stanley's analyst noted that Zscaler's results were largely in line with expectations, expressing confidence in growth prospects despite minor concerns [6]. - Mizuho's analyst pointed out two unwelcome surprises: lower guidance for net new annual recurring revenue (ARR) and lack of specific contribution details from the Red Canary acquisition, leading to a price target reduction [7]. Stock Ratings - Zscaler's stock had an IBD Composite Rating of 91 out of 99, indicating strong growth potential, although the recent stock slide raises questions about future performance [8].

Core Viewpoint - Zscaler, Inc. reported strong first-quarter earnings, beating analyst estimates, but its stock price fell by 7.77% in after-hours trading despite positive financial results [1][5]. Financial Performance - Quarterly earnings were reported at 96 cents per share, surpassing the analyst estimate of 86 cents [2]. - Revenue for the quarter reached $788.1 million, exceeding the analyst estimate of $773.75 million [3]. - Deferred revenue stood at $2.35 billion as of October 31, 2025, reflecting a 32% year-over-year increase [3]. Business Growth - The company has over $3.2 billion in Annual Recurring Revenue, growing over 25% year-over-year [4]. - Zscaler's CEO highlighted strong demand for its Zero Trust and AI Security platform, indicating a trend towards better security and reduced operational costs for customers [3][4]. Future Outlook - Zscaler raised its fiscal 2026 adjusted EPS guidance to a range of $3.78 to $3.82, compared to the previous estimate of $3.68 [5]. - The fiscal revenue outlook was also increased to a range of $3.7 billion to $3.72 billion, up from the prior estimate of $3.28 billion [5].