Zscaler Shares Drop 20% After Q4 Revenue Outlook Miss, Cash-Flow Margin Cut
ZS•Zscaler’s Q3 revenue rose 25% year-over-year to $850.5 million with adjusted EPS of $1.08, beating analyst estimates. Shares plunged almost 20% after hours as Q4 revenue guidance of $875M-$878M fell short of consensus and full-year cash-flow margin forecast was trimmed.
1. Q3 Performance
Zscaler delivered revenue of $850.5 million, a 25% increase year-over-year, and adjusted earnings per share of $1.08, surpassing consensus estimates.
2. Q4 and Full-Year Outlook
The company forecasted Q4 revenue between $875 million and $878 million, representing roughly 22% year-over-year growth but marginally below the $878.6 million consensus, and projected full-year revenue of about $3.3 billion with EPS of $4.10 to $4.11.
3. Cash-Flow Margin and Market Reaction
Zscaler trimmed its full-year cash-flow margin outlook, triggering a nearly 20% decline in after-hours trading as investors reacted to the lowered profitability forecast.
4. Analyst Ratings and Strategic Moves
Of 48 analysts covering the stock, 40 rate it a buy and eight rate it a hold, and the company has announced intent to acquire data security vendor Symmetry Systems to expand its platform offerings.
