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Zscaler Shares Fall After Q1 Beat as Company Lifts Full-Year Outlook

Profit-taking after a 60% rally left the post-earnings reaction negative.

Overview

  • The cybersecurity firm posted fiscal Q1 revenue of $788.1 million and adjusted earnings of $0.96 per share, topping estimates on both metrics.
  • Full-year fiscal 2026 guidance rose to $3.28 billion to $3.30 billion in revenue and $3.78 to $3.82 in adjusted EPS, with Q2 revenue guided to $797 million to $799 million and EPS to $0.89 to $0.90.
  • Annual Recurring Revenue reached roughly $3.2 billion, up 26% year over year, while deferred revenue increased 32% to $2.35 billion as the GAAP net loss narrowed to $11.6 million.
  • Management cited strong demand for its Zero Trust and AI Security platform, highlighted a reduced adjusted tax rate of 21%, and noted SPLX integration, over $1 billion in AWS Marketplace sales, and new data centers in London and Paris.
  • Shares fell roughly 9% to 13% from after-hours through Wednesday’s close as several firms, including Scotiabank, UBS, Stifel, BofA, Needham, JPMorgan and Bernstein, recalibrated price targets.