Zscaler Drops 12% After Hours Despite Earnings Beat as Call Warns of Slowing Sales
Zscaler shares fell more than 12% after hours even after the cloud-security company reported fiscal third-quarter revenue of $850.5 million and adjusted earnings per share of $1.08, ahead of estimates of about $835.6 million and $1.01. Annual recurring revenue rose 25% to $3.525 billion, including $166 million of net new ARR, and Zscaler raised its full-year adjusted EPS outlook to $4.10 to $4.11 from $3.99 to $4.02 while also nudging up its revenue and ARR forecasts.
The selloff came as Zscaler projected fourth-quarter revenue of $875 million to $878 million, slightly below a roughly $879 million consensus, cut its full-year free-cash-flow margin outlook to about 22.8% to 23.3% from 26.5% to 27%, and warned on the earnings call of slowing sales. The call also referenced the departure of two sales leaders.
From the sources (7 posts)
@zerohedge*ZSCALER SEES FY ADJ EPS $4.10 TO $4.11, SAW $3.99 TO $4.02 And stock crashes
@stocktwits$ZS is down over 12% after hours on a double beat in earnings
@wallstengine$ZS Q3’26 EARNINGS HIGHLIGHTS 🔹 Revenue: $850.5M (Est. $835.55M) 🟢; +25% YoY 🔹 Adj. EPS: $1.08 (Est. $1.01) 🟢 🔹 ARR: $3.525B; +25% YoY 🔹 Non-GAAP Operating Margin: 23% 🔹 FCF: $136.0M; +14% YoY Q4 Guide: 🔹 Revenue: $875M-$878M; +22% YoY 🔹
@stocksavvyshay$ZS Q3 EARNINGS • Revenue $850M vs Est. $836M • EPS $1.08 vs Est. $1.01 • Operating Income $196M vs Est. $188M • ARR $3.53B vs Est. $3.51B Q4 Guidance • Revenue $877M vs Est. $879M • EPS $1.09 vs Est. $1.04 • Operating Income $207M vs Est
@alphasenseinc$ZS Earnings: - Revenue: Grew 25% year-over-year to $850.5 million. - Net income (loss) per share, diluted: GAAP net loss per share was $0.09, compared to $0.03 in the third quarter of fiscal 2025. Non-GAAP net income per share was $1.08,
@alphasenseinc$ZS CEO Jay Chaudhry says enterprises are concerned about the emergence of foundation models and he has never seen so many inbound calls coming so quickly. They are not rushing to create opportunities, they are engaging with customers in a
@jimcramerOh boy, the Zscaler call was tough when it said two sales leaders left and it warned of slowing sales. The analysts, or at least most of the analysts, showed great respect to Jay and his team. But it didn't matter....