Zscaler forecasts annual results below estimates on weak cybersecurity spending
Sept 3 (Reuters) -Zscaler ZS.O forecast fiscal 2025 revenue and profit below Wall Street estimates on Tuesday, as it grapples withweak spending on its cybersecurity products, sending its shares down more than 12% in extended trading.
Enterprise clients have been cutting back on critical security expenditures, as high interest rates and signs of an uncertain macroeconomic environment pressure theiroverall technology budgets.
Zscaler's results stand in contrast to those of its sector peersPalo Alto Networks PANW.O andSentinelOne S.N, both of which provided strong annual revenue forecasts last month following aglobal tech outage in July attributed to CrowdStrike CRWD.O.
The threat of cybercrimes, including hacks and data breaches, has become more prevalent with large firms such as Advanced Micro Devices AMD.O and Microsoft MSFT.O, which haveexperienced some form of cyber breach in recent months.
Zscalerforecast full-year revenue in the range of $2.60 billion to $2.62 billion, while analysts expected $2.63 billion, according to LSEG data.
It forecast full-year adjusted net income of $2.81 to $2.87 per share, compared with estimates of $3.33.
For the first quarter, the company forecast revenue between $604 million and $606 million, compared with the average analysts' estimate of $602.8 million.
It expects adjusted earnings per share to be between 62 cents and 63 cents for the quarter, which falls short of the Street estimates of 73 cents.
Zscaler reported fourth-quarter revenue of $592.9 million for the period ended July 31, above LSEGestimate of $567.9 million.
On an adjusted basis, the company posted earnings of 88 cents per share, surpassing the estimates of 69 cents.
Reporting by Zaheer Kachwala in Bengaluru; Editing by Mohammed Safi Shamsi
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