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Zscaler surges on Q3 preliminary earnings, raises full-year guidance

Published 05/08/2023, 08:03 AM
Updated 05/08/2023, 08:17 AM
© Reuters.  Zscaler (ZS) surges on Q3 preliminary earnings, raises full-year guidance

Zscaler (NASDAQ:ZS) shares surged more than 23% premarket Monday after it released preliminary results for the third quarter, beating expectations and raising its FY2023 guidance.

The company reported that revenue for Q3 is expected to come in between $415 million and $419M, well above the previous guidance range of $396M to $398M. In addition, the company's adjusted income from operations is seen between $60M to $64M, compared to the previous expectation of $55M to $56M.

Furthermore, calculated billings are now seen between $478M to $482M, representing an increase of approximately 38% to 39% year-over-year.

Zscaler's stock is currently trading at $110.50 per share ahead of the open.

"I am pleased to announce that our preliminary third-quarter results exceeded the high end of our guidance range. We had a strong finish to the quarter as the high ROI of adopting the Zscaler Zero Trust ExchangeTM platform continues to resonate with customers and prospects in this challenging macro environment," said Jay Chaudhry, Chairman and CEO of Zscaler.

Looking forward, the cloud security company now expects FY2023 revenue between $1.587 billion and $1.591B, above the previously forecast range of $1.558B to $1.563B, while calculated billings are expected to be from $1.97B to $1.974B, also above previous expectations. ZS raised its adjusted operating income expectation for the year to between $220M and $224M, from $213M to $215M.

The company explained that its customer engagements are strong, and its platform "continues to expand with innovations that solve our customers' real-time IT challenges."

ZS expects to report earnings for its third quarter before the open on June 1.

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