Zscaler Beats Q4 Estimates with $898 Million in Revenue, Eyes AI Agent Security as Next Growth Driver

Zscaler shares surged Thursday after the cloud security company reported fiscal fourth-quarter revenue of $898 million, topping Wall Street's $877 million estimate, as rising artificial intelligence risk drove urgent demand for enterprise security tools.

Earnings per share came in at $1.19 adjusted, above the $1.09 analysts had expected. Revenue climbed 25% from approximately $719 million in the same period a year earlier.

The company reported a net loss of $3.4 million, or 2 cents per share, a significant improvement from a net loss of $17.6 million, or 11 cents per share, in the year-ago quarter.

Annual recurring revenue reached $3.77 billion, also up 25% year over year, narrowly beating a $3.75 billion estimate from StreetAccount.

CEO Jay Chaudhry pointed to adoption of the company's Zero Trust cloud security architecture as a primary driver of the beat. He told CNBC he is "very bullish" on the company's recently launched Zero Trust iteration designed specifically for AI agents, describing it as a longer-term opportunity with meaningful barriers to entry.

"The core competency we bring to the table is pretty unique, and as the adoption of AI agents happens, the market will recognize more and more that Zscaler is a critical player," Chaudhry said.

Bookings tied to the agentic security product totaled $100 million over the last year and grew more than 50% sequentially this quarter, the company said. Chaudhry expects that momentum to accelerate rapidly into fiscal years 2028 and 2029.

"It's a longer-term opportunity, but I think it's a fantastic opportunity with significant barriers to entry," he said.

The results land at a complicated moment for Zscaler. While broader cybersecurity stocks have climbed sharply this year amid increasingly sophisticated AI-driven threats, Zscaler shares have fallen 20% in the same period — an underperformance the company attributes in part to the departure of two sales leaders last quarter, which prompted management to adopt what it called a "prudent approach" to guidance. That cautious stance sent the stock to its worst single-day loss on record at the time.

Thursday's guidance provided a clearer signal of recovered confidence. For the fiscal first quarter, Zscaler projected revenue of $935 million to $939 million and adjusted EPS of $1.15 to $1.16, above analyst estimates of $927 million and $1.08, respectively.

For the full fiscal year, the company forecast revenue of $3.91 billion to $3.94 billion, above the $3.90 billion consensus estimate. Adjusted EPS guidance of $4.86 to $4.90 also cleared the $4.60 per-share estimate analysts had penciled in.

The quarter reinforces a dynamic playing out across enterprise security: the same AI systems companies are racing to deploy are also expanding the attack surface those companies must defend, creating demand on both sides of the equation. Chaudhry has positioned Zscaler squarely at that intersection, and the market's response to Thursday's report suggests investors are beginning to re-engage with that thesis — though the stock's year-to-date gap versus peers remains a benchmark the company will need to close in coming quarters.

Disclaimer