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Why Zscaler Stock Popped This Morning

By Evan Niu, CFA - Feb 26, 2021 at 1:17PM

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The cloud-based cybersecurity specialist reported fiscal second-quarter earnings results.

What happened

Shares of Zscaler (ZS 3.73%) popped as much as 14% this morning after the company reported fiscal second-quarter earnings. The results easily topped expectations, and guidance was mixed. As of 12:35 p.m. EST, the stock had given back much of those gains and was up just 4%.

So what

Revenue in the fiscal second quarter was $157 million, compared to the consensus estimate of $147.4 million. That resulted in adjusted net income of $14 million, or $0.10 per share. Wall Street analysts were looking for just $0.08 per share in adjusted profits. The cloud-based cybersecurity technology company said calculated billings jumped 71% to $232 million.

Green stock chart going up

Image source: Getty Images.

"Businesses are accelerating their digital transformation, and this drove our strong second quarter results," CEO Jay Chaudhry said in a statement. "Our customers are turning to Zscaler's Zero Trust Exchange to implement Zero Trust architecture to protect users, workloads and applications, and improve user experience."

Now what

Revenue guidance for the fiscal third quarter was also strong, with sales forecast in the range of $162 million to $164 million. That outlook tops the Street's current expectation of $154 million in sales. However, Zscaler expects to report adjusted earnings per share of $0.07, which is slightly below the $0.08 per share in adjusted profits that analysts are looking for. For fiscal 2021, the company says revenue should be in the range of $634 million to $638 million, with calculated billings of $820 million to $825 million.

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