Bullish indicating open at $55-$60, IPO prices at $37
Investing.com -- Zscaler Inc reported better-than-expected second-quarter results on Wednesday and raised its full-year billings outlook, sending its shares up nearly 5% in premarket trading Thursday,
The cloud security firm posted earnings per share of $0.78, exceeding analysts’ estimates of $0.69. Revenue rose to $647.9 million, beating the consensus forecast of $634.4 million.
"Growing adoption of Zero Trust and AI is driving strong demand for our platform, resulting in yet another strong quarter that exceeded our guidance on both top and bottom line," said CEO Jay Chaudhry.
Zscaler reported billings of $742 million for the quarter, 3.2% ahead of consensus, with growth accelerating to 18%.
Annual recurring revenue (ARR) surpassed $2.7 billion, increasing 23% year over year, and is expected to exceed $3 billion by the end of the year. Net revenue retention (NRR) improved by one percentage point to 115% during the quarter.
"Zscaler’s FQ2’25 started to show clearer evidence that their investment in new sales talent and strategy is paying off," Bernstein analysts led by Peter Weed commented.
Zscaler (NASDAQ:ZS) now expects earnings per share of $3.04 to $3.09, for 2025, which is above Wall Street’s estimate of $2.99. The company forecast full-year revenue of $2.64 billion to $2.65 billion, below analysts’ expectations of $2.69 billion.
Management raised its full-year 2025 billings growth outlook to 20.5% from 19.6%, fully reflecting the quarterly billings beat.
They also project sequential billings growth of 230 basis points in the third quarter, implying growth of 21.0% in the third quarter and 25.4% in the fourth, compared to prior consensus estimates of 22.4% and 24.5%.
"While the F3Q billings indication was slightly below consensus, the beat and raise likely increases investor confidence in the F2H ramp," Wolfe Research analysts said in a note.
Pratyush Thakur contributed to this report.