Zscaler Stock Falls on Guidance Despite Strong AI Security Momentum

Zscaler Inc (NASDAQ:ZS) shares are declining in the premarket session on Wednesday after the company issued third-quarter results.

Zscaler Earnings Highlights

The cybersecurity company posted third-quarter revenue of $850.48 million, beating the consensus estimate of $835.38 million. It reported third-quarter adjusted earnings of $1.08 per share. It beat analyst estimates of $1.01 per share, according to Benzinga Pro.

Adjusted operating margin hit a record 23%, expanding 140 basis points, driven by operating leverage in sales and marketing.

Key Metric

Annual Recurring Revenue (ARR) rose 25% year over year (Y/Y) to $3.5 billion. The Zero Trust platform helped support that growth.

Its data security segment surpassed $500 million in ARR, growing over 30%, driven by platform consolidation and AI-related demand.

The company also saw broad customer ...

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Zscaler Stock Falls on Guidance Despite Strong AI Security Momentum

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