GoKawiilZscaler stock sank on Friday even though the cloud security company beat Wall Street's fiscal fourth-quarter estimates as rising artificial intelligence risk spurred urgent demand for cyber tools.
Here's how the company performed compared to LSEG estimates:
Earnings per share : $1.19 adjusted vs. $1.09 expected
: $1.19 adjusted vs. $1.09 expected Revenue: $898 million vs. $877 million expected
Revenue jumped 25% from about $719 million last year. In its Q4 financials issued on Thursday, Zscaler reported a net loss of $3.4 million, a loss of 2 cents per share, up from a net loss of $17.6 million, a loss of 11 cents per share, a year ago.
CEO Jay Chaudhry highlighted the adoption of the company's Zero Trust cloud security architecture and innovative technology as driving forces behind the quarterly beat.
He told CNBC he's "very bullish" on the recently launched Zero Trust iteration for AI agents, which is gaining early momentum and is expected 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," Chaudhry said.
Annual recurring revenue rose 25% from a year ago to $3.77 billion, beating a $3.75 billion estimate from StreetAccount.
Cybersecurity stocks have skyrocketed this year as increasingly sophisticated cyber models and the rise of agent-led attacks force businesses to adopt new security tools.