Zscaler Q2 Loss Widens to $34.3M as Spending Rises, Shares Plunge 9%
Zscaler’s Q2 net loss widened to $34.3 million from $7.7 million as operating expenses rose, driving shares down 9%. Revenue climbed 26% to $815.8 million with adjusted EPS of $1.01 topping estimates and Q3 guidance of $1.00–1.01 EPS and $834–836 million revenue exceed forecasts.
1. Q2 Financial Results
Zscaler posted a net loss of $34.3 million for the quarter ended January 31, compared with a $7.7 million loss a year earlier, while revenue rose 26% to $815.8 million and adjusted EPS reached $1.01, exceeding analyst forecasts of $0.90.
2. Expense Increase Drivers
Operating expenses climbed to $676.3 million from $539.5 million year-on-year, driven primarily by increased investments in sales, marketing and research and development to fuel customer acquisition and product innovation.
3. Market Reaction
Shares fell approximately 9% in extended trading following the release, reflecting investor concern over rising costs despite robust top-line growth and stronger profitability metrics.
4. Q3 Guidance and Outlook
For the fiscal third quarter, Zscaler forecast adjusted EPS of $1.00 to $1.01 and revenue between $834 million and $836 million, both figures above market estimates and indicating continued momentum into the next period.