Cloud security company Zscaler, Inc. (NASDAQ: ZS) has reported better-than-expected results for the third quarter ended April 30, 2022.
In anticipation of upbeat results, shares of the company rose 7.2% in the normal trading hours on Thursday. The stock further rose 1.3% in the extended trading session to close at $144.
Revenue & Earnings
Revenues for the quarter stood at $286.8 million, up 63% year-over-year. Further, the figure topped the consensus estimate of $271.38 million.
The company reported earnings per share (EPS) of $0.17, up 13.3% from the same quarter last year, surpassing the consensus estimate of $0.11 per share.
Zscaler reported total billings of $345.6 million, up 54% year-over-year. Meanwhile, its cash provided by operations improved 5.2% from the year-ago period to $77.2 million.
Meanwhile, the free cash flow balance declined 21.7% from the same quarter last year to $43.7 million.
Outlook
The company also provided EPS and revenue outlook for the fourth quarter and full Fiscal Year 2022.
For the fourth quarter of 2022, Zscaler anticipates revenue of $304 million to $306 million against the consensus estimate of $291.02 million. Further, it anticipates earnings in the range of $0.20 to $0.21 per share versus the consensus estimate of $0.17 per share.
For the Fiscal Year 2022, the company forecasts revenues of $1.078 billion against the Street’s expectation of $1.05 billion. It expects to post earnings of $0.64 to $0.65 per share, which are above the consensus estimate of $0.55 per share.
Management’s Take
The CEO of Zscaler, Jay Chaudhry, said, “Enterprises continue to consolidate point products in favor of our integrated Zero Trust security platform, resulting in larger, multi-year commitments to Zscaler. Demanding enterprises look to Zscaler as their strategic partner of choice in their Zero Trust journey, as the world races towards network and security transformation.”
Stock Rating
Consensus among analysts is a Strong Buy based on 10 Buys and two Holds. ZS’ average price target of $246 implies upside potential of 73.1% from current levels. Shares have declined 26.8% over the past year.
Conclusion
Zscaler’s upbeat results for the third quarter are expected to allow the company to expand its operations smoothly.
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