Why Zscaler Is Bombing on Q4 Results

Chris Lange

When Zscaler Inc. (NASDAQ: ZS) released its fiscal fourth-quarter financial results after the markets closed on Tuesday, the firm said that it had a $0.07 in earnings per share (EPS) and $86.1 million in revenue. That compared with consensus estimates of $0.01 in EPS and $82.8 million in revenue, as well as the net loss of $0.01 per share and $56.17 million in revenue posted in the same period of last year.

For the most recent quarter, deferred revenue increased 53% year over year to $251.2 million, while calculated billings grew 32% to $125.8 million.

Looking ahead to the fiscal first quarter, the company expects to see EPS in the range of flat to $0.01 and total revenue of $89 million to $90 million. Consensus estimates call for $0.02 in EPS and $87.56 million in revenue for the quarter.

As for the 2020 fiscal full year, the firm expects to see earnings $0.12 to $0.15 per share and total revenue between $395 million and $405 million. The consensus estimates are $0.19 in EPS and $402.62 million in revenue.

Jay Chaudhry, board chair and chief executive of Zscaler, commented:

Our strong fiscal 2019 results demonstrate our ability to drive growth and profitability while investing in our business, as we continue to see enterprises transforming their network and security to realize the benefits of the cloud. I am also excited to welcome Dali Rajic as our new President Go-to-Market and Chief Revenue Officer and look forward to working together to scale our business to capture our significant market opportunity.

Shares of Zscaler traded down more than 20% early Wednesday to $49.12, in a 52-week range of $30.72 to $89.54. The consensus price target is $79.65.