Zscaler Q1 Earnings: Revenue Beat, EPS Beat, New AI Opportunities, Shares Slide

Zscaler Inc ZS reported fiscal first-quarter financial results after the market close on Monday. Here’s a rundown of the report.

Q1 Earnings: Zscaler reported first-quarter revenue of $628 million, beating the consensus estimate of $606.19 million. The cybersecurity company reported adjusted earnings of 77 cents per share, beating analyst estimates of 63 cents per share, according to Benzinga Pro.

Total revenue was up 26% on a year-over-year basis. Deferred revenue increased 27% year-over-year to $1.783.7 billion. Calculated billings grew 13% year-over-year to $516.7 million.

Cash flow from operations totaled $331.3 million in the quarter. The company generated $291.9 million of free cash flow in the first quarter, up from $224.7 million in the prior year’s quarter. Zscaler ended the quarter with approximately $2.71 billion in cash, equivalents and short-term investments.

“Growing customer engagements and strong sales execution drove a solid first quarter with all metrics exceeding our guidance. The combination of Zero Trust and AI is creating exciting new opportunities, which we are well positioned to capture with our large and expanding platform,” said Jay Chaudhry, chairman and CEO of Zscaler.

“With our customer obsession, the world’s largest cybersecurity cloud, and an upleveled go-to-market machine, we are driving strong growth.”

Related Link: Generative AI Backed Cybersecurity Stocks Cloudflare, Okta Have Near-Term Upside: Analyst

Guidance: Zscaler expects fiscal second-quarter revenue to be in the range of $633 million to $635 million versus estimates of $633.84 million. The company anticipates second-quarter adjusted earnings of 68 cents to 69 cents per share versus estimates of 69 cents per share.

Zscaler expects full-year 2025 revenue of approximately $2.623 billion to $2.643 billion. The company anticipates full-year adjusted earnings of $2.94 to $2.99 per share.

Management will further discuss the quarter on a conference call with analysts and investors at 4:30 p.m. ET.

ZS Price Action: Zscaler shares were down 7.17% in after-hours, trading at $193.80 at the time of publication Monday, according to Benzinga Pro.

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