Key Takeaways
- Shares of Zscaler surged Friday, a day after the cloud security provider posted a surprise profit.
- Profit and sales projections from competitors like Palo Alto Networks and Cloudflare had dragged cybersecurity stock prices in recent months.
- Zscaler also provided fourth-quarter revenue guidance mostly in line with analysts’ expectations.
Shares of cloud security provider Zscaler ( ZS ) surged Friday, a day after it released third-quarter results that easily beat estimates.
Zscaler posted a surprise profit for the quarter of $19.1 million, or 12 cents per share, up from a loss of $46.05 million, or 32 cents per share, in the third quarter last year. Analysts expected Zscaler to lose $37 million, or 24 cents per share, according to consensus estimates compiled by Visible Alpha.
Revenue of $553.2 million was up 32% from last year and topped analysts’ expectations of $535.2 million.
Q4 Revenue Guidance Mostly in Line With Estimates
Zscaler’s fourth-quarter revenue guidance of $565 million to $567 million, which would be up nearly 25% from the prior-year’s reported figure, is mostly in line with estimates of $567.6 million.
Zscaler projects current-quarter adjusted net income to range between $107 million and $109 million, slightly below the $115.1 million analysts estimate. In last year’s fourth quarter, the company reported adjusted profit of $100.9 million after accounting for one-time expenses like stock-based compensation.
The cybersecurity industry has been in a tough spot in recent months , with profit and sales projections from other cloud and cybersecurity providers like Palo Alto Networks ( PANW ) and Cloudflare ( NET ) dragging down stocks around the industry .
Zscaler shares were up more than 7% to $167.97 as of 11:03 a.m. ET Friday, but are still down about 24% for the year.