What happened

Shares of Zscaler (NASDAQ:ZS) have skyrocketed today, up by 28% as of 12:30 p.m. EDT, after the company reported blockbuster fiscal third-quarter earnings results. Both top- and bottom-line results in its first report as a public company easily beat analyst expectations.

So what

Revenue in the fiscal third quarter jumped 49% to $49.2 million, ahead of the $46 million in sales that the Street was forecasting. That translated into a non-GAAP net loss of $2.6 million, or $0.02 per share. The consensus estimate had called for an adjusted loss of $0.08 per share. Deferred revenue grew 61% to $124.8 million, while billings jumped 73% to $54.7 million.

Headshot of CEO Jay Chaudhry

CEO Jay Chaudhry. Image source: Zscaler.

The cloud security company also saw gross margin expand to 81% on both a GAAP and non-GAAP basis. The stock has received a slew of analyst upgrades in the wake of the release.

Now what

"In addition to our top-line growth, we had healthy operating performance. Our operating margins improved 9 percentage points year over year, and we generated positive free cash flow for the quarter," CEO Jay Chaudhry said on the earnings call. "We believe these results demonstrate Zscaler's increased adoption in the marketplace as organizations embrace cloud transformation as they are increasingly relying on the Internet and cloud for business."

In terms of guidance, Zscaler is expecting fiscal fourth-quarter revenue in the range of $50 million to $51 million, with a non-GAAP operating loss of $6 million to $7 million. Non-GAAP net loss per share should be $0.05 to $0.06. Analysts are currently modeling for sales of $48.4 million and an adjusted loss of $0.09 per share in the coming quarter.

Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.