(Reuters) – Zscaler on Monday raised its annual revenue forecast after beating estimates for quarterly revenue on strong demand for its cybersecurity services, but its shares fell more than 6% in extended trading as its report failed to impress investors.
The company also announced the retirement of its chief financial officer, Remo Canessa.
Enterprises around the world are boosting their spending on cybersecurity solutions in the wake of a rise in digital threats and high-profile hacks, which in turn is benefiting cybersecurity firms such as Zscaler.
The second quarter of 2024 recorded the highest increase in global cyber attacks in the last two years, according to Check Point data.
However, Zscaler’s forecast for second-quarter revenue, which was largely in line with Wall Street estimates, failed to keep up with investor expectations, said Michael Ashley Schulman, chief investment officer at Running Point Capital.
Zscaler raised its forecast for fiscal 2025 revenue to between $2.62 billion and $2.64 billion from its prior view of $2.60 billion to $2.62 billion.
It raised its forecast for annual adjusted earnings per share to a range of $2.94 to $2.99, compared with $2.81 to $2.87 expected previously.
The company expects second-quarter revenue between $633 million and $635 million, compared with estimates of $633.8 million, according to data compiled by LSEG.
Revenue for the quarter ended Oct. 31 came in at $627.96 million, beating estimates of $606.2 million.
The company’s net loss per share was 8 cents for the first quarter, compared with a loss of 23 cents a year ago.
Zscaler faces stiff competition in the cybersecurity industry from larger rivals such as Palo Alto Networks, which reported strong quarterly results last month.
(Reporting by Zaheer Kachwala in Bengaluru; Editing by Shreya Biswas)
