The stock market had a relatively quiet day during the regular trading session on Wednesday, as market participants seemed to balance their optimistic views with more pessimistic concerns. In the end, though, there was one new record high made, with the S&P 500 (SNPINDEX:^GSPC) inching higher into uncharted territory. Gains for the Dow Jones Industrial Average (DJINDICES:^DJI) were also well-received, but the Nasdaq Composite (NASDAQINDEX:^IXIC) eased lower from its high-water mark from Tuesday.

Today's stock market

Index

Percentage Change

Point Change

Dow

+0.20%

+60

S&P 500

+0.18%

+7

Nasdaq Composite

(0.05%)

(6)

Data source: Yahoo! Finance.

The real fireworks on Wednesday happened in the extended-hours session after the market closed. That was a result of two much-anticipated earnings reports from the software-as-a-service space (SaaS), as both CrowdStrike Holdings (NASDAQ:CRWD) and Zscaler (NASDAQ:ZS) told investors exactly what they wanted to hear.

A home run for CrowdStrike

CrowdStrike Holdings shares finished the regular session down 4%, but they soared more than 11% as of 5 p.m. EST in after-hours trading. The cybersecurity specialist wowed investors with its third-quarter results, and shareholders are optimistic about what the coming year will bring.

Lock on a computer screen, with digits behind.

Image source: Getty Images.

CrowdStrike's growth pace continued at breakneck speed, with total sales jumping 86% on an 87% rise in subscription revenue year over year. Gross margin figures moved higher, and CrowdStrike posted an adjusted operating profit and reversed year-ago losses with adjusted earnings of $0.08 per share. Free cash flow was more than 10 times higher than it was in the third quarter of last year.

Customers flooded onto CrowdStrike's platform, with the company adding 1,186 new subscribers in just the past three months to hit 8,416. That's up 85% from its customer base a year ago. Moreover, the company has had more success cross-selling multiple modules of its platform to existing clients, with more than three in five CrowdStrike users having at least four modules in use.

CrowdStrike expects to remain profitable on an adjusted basis in the fourth quarter and to see revenue growth continue, with guidance for $245.5 million to $250.5 million on the top line. Moreover, with partnerships with influential businesses like ServiceNow (NYSE:NOW) and accounting giant Ernst & Young, CrowdStrike is firing on all cylinders at a critical time for SaaS stocks .

Zscaler looks more secure than ever

Cloud-security peer Zscaler saw similar performance in its fiscal first-quarter results. The stock fell nearly 4% during regular trading but was up more than 10% an hour into the after-hours session.

Zscaler reported a 52% rise in revenue, with adjusted net income more than quadrupling from year-ago levels. Free cash flow jumped more than fourfold as well.

The company attributed its success to the ongoing digital-transformation efforts going on across the economy. Strategic partnerships with VMware (NYSE:VMW) and with the Tandon School of Engineering at New York University should help Zscaler with key elements of its broader strategic vision.

Zscaler also boosted its guidance for the full fiscal year, with expectations for full-year sales of $608 million to $612 million and adjusted earnings of $0.37 to $0.38 per share. Investors were pleased to see more signs of future growth, as that has been a critical element of what has supported high valuations for the SaaS sector.

Investors will want to keep an eye on both Zscaler and CrowdStrike Thursday to see whether they hold onto or build on their gains from Wednesday evening. Fundamentally, both companies look strong and are delivering on their potential.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.