Zscaler Falls 16% Post-Earnings Despite Beating Q4 Estimates Due to Weak Outlook

Zscaler (NASDAQ:ZS) delivered stronger-than-expected fourth-quarter results, yet its stock tumbled more than 16% intra-day today due to disappointing profit guidance for the upcoming fiscal year.

The cloud security company reported adjusted earnings per share of $0.88, surpassing the $0.70 anticipated by analysts. Revenue for the quarter surged 30% year-over-year to $592.9 million, beating the Street estimate of $567.46 million.

Despite this solid performance, Zscaler's outlook for fiscal 2025 left investors concerned. The company forecasted full-year adjusted earnings per share of $2.81 to $2.87, falling short of the $3.01 analysts had predicted. Revenue guidance for the year was in line with estimates, ranging between $2.60 billion and $2.62 billion.

For the first quarter of 2025, Zscaler projected revenue slightly above expectations at $604 million to $606 million, but its adjusted EPS forecast of $0.62 to $0.63 missed the $0.73 expected by Wall Street analysts.

On a positive note, Zscaler's deferred revenue—a key indicator of future growth—increased 32% year-over-year to $1.895 billion, while cash flow from operations totaled $203.6 million, representing 34% of revenue.