Zscaler (NASDAQ:ZS) saw shares climb nearly 2% in premarket trading on Wednesday after reporting fiscal fourth-quarter revenue that exceeded Wall Street forecasts and providing a stronger-than-expected outlook for the upcoming quarter.
The cloud security firm posted Q4 revenue of $719.2 million, surpassing analysts’ consensus estimate of $706.95 million, though earnings per share reflected a loss of 11 cents. Billings surged 32% year-over-year to $1.2 billion, exceeding the Street’s anticipated 27% growth.
Stifel analysts commented, “Consistent with our positive checks, Zscaler delivered another solid print, with F4Q25 key-metrics above expectations given strong execution and ongoing demand for Zscaler’s broadening Zero-Trust portfolio.” Following the report, the firm raised its price target on Zscaler stock to $330 from $295.
Zscaler, a major player in the rapidly expanding secure access service edge (SASE) market, completed its $675 million acquisition of Red Canary in early August, enhancing both its capabilities and position within the AI-driven cybersecurity space.
Looking ahead to fiscal Q1 2026, the company anticipates earnings between 85 and 86 cents per share, slightly above estimates of 84 cents. Revenue is projected to range from $772 million to $774 million, topping the consensus forecast of $750.9 million.
Guggenheim analysts noted that Zscaler delivered “solid results, but [with] a lot of noise.”
The company also reported surpassing $3 billion in annual recurring revenue during the quarter while achieving its highest operating margin to date.
“We had an outstanding Q4, in which we achieved a new milestone of more than $3 billion of Annual Recurring Revenue while achieving our highest ever operating margin for a quarter. We believe Zscaler’s Zero Trust and AI security solutions are imperative in today’s world and are driving robust demand,” said CEO Jay Chaudhry.
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