Zscaler’s Q2 Net Loss Widens to $34.3M, Revenue Jumps 26%
Zscaler’s second-quarter net loss widened to $34.3 million as operating expenses rose 25% to $676.3 million, driven by sales, marketing and R&D. Revenue climbed 26% to $815.8 million, topping estimates, and the firm forecast third-quarter revenue of $834 million to $836 million with adjusted EPS of $1.00–$1.01.
1. Q2 Financial Results
Zscaler reported a net loss of $34.3 million for the quarter ended January 31, compared with a $7.7 million loss a year earlier, reflecting increased investment in growth initiatives.
2. Operating Expenses
Total operating expenses climbed to $676.3 million from $539.5 million a year ago, driven by higher spending on sales, marketing and research and development activities.
3. Revenue Beat and Guidance
Revenue rose 26% to $815.8 million, surpassing analysts’ average estimate of $798.8 million, while adjusted earnings per share of $1.01 exceeded projections. The company forecast third-quarter revenue of $834 million to $836 million and EPS of $1.00–$1.01.
4. Competitive Implications
Zscaler’s aggressive spending and strong revenue growth intensify competition within the cloud security sector, potentially pressuring rivals such as Palo Alto Networks to boost investments in product development and sales.