Zscaler Earnings Top Estimates, Sales Outlook Slightly Above Views. Cybersecurity Stock Falls.

Zscaler (ZS) stock fell after the cybersecurity firm reported fiscal second-quarter earnings, revenue and annual recurring revenue that topped estimates, while its April quarter guidance edged by estimates.

Reported after the market close on Thursday, Zscaler earnings rose 29% to $1.01 per share on an adjusted basis. Revenue climbed 26% to $$815.8 million, the San Jose, Calif.-based firm said. Zscaler stock analysts had expected earnings of 89 cents per share on sales of $798.3 million. Also, annual recurring revenue from subscriptions came in at $3.359 billion, up 25% versus estimates of $3.346 billion.

“Billings, which is no longer a key metric, and can be skewed by duration, missed estimates,” noted RBC Capital analyst Matthew Hedberg in a report.

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Zscaler Stock: Sales Guidance Above Views

For the April quarter, Zscaler forecast revenue of $835 million at the mid-point of guidance, slightly above estimates of $831 billion.

In extended trading on the stock market today, Zscaler stock fell over 5% to 157.93.

Heading into the Zscaler earnings release, the cybersecurity stock had retreated 27% in 2026. Shares popped 25% last year.

Further, Zscaler is a leader in  Secure Access Service Edge, or SASE, and Zero Trust identity services. Zscaler provides cloud-based cybersecurity services via 150 data centers worldwide. Zscaler’s web security gateways inspect customers’ data traffic for malware. Further, the Zscaler Private Access cloud service replaces virtual private networks to support remote work.

Zscaler competes with Palo Alto Networks (PANW) and Microsoft (MSFT) as well as startup Wiz. Google parent Alphabet (GOOGL) has agreed to buy Wiz in a $25 billion cash deal.

Zscaler Stock Technical Ratings

Meanwhile, Zscaler stock holds an Accumulation/Distribution Rating of E, according to IBD Stock Checkup. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading. A+ signifies heavy institutional buying; E means heavy selling. Think of a C grade as neutral.

Also, Zscaler stock holds an IBD Composite Rating of 45 out of 99. IBD’s Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.

Zscaler belongs to the IBD Computer-Software Security group, which ranks only No. 189 out of 197 groups tracked.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.

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