Zscaler Beats Q2 Targets and Raises Full-Year Outlook as GAAP Loss Widens

Shares fell about 9% following the release as investors weighed higher spending, sector volatility, new AI security tools.

Overview

Revenue rose 26% to $815.8 million, topping estimates, and adjusted EPS came in at $1.01 versus expectations near $0.90.
Management guided Q3 revenue to $834–$836 million with adjusted EPS of $1.00–$1.01, and lifted full‑year EPS to $3.99–$4.02 on revenue of $3.309–$3.322 billion.
GAAP net loss widened to $34.3 million from $7.7 million a year ago as operating expenses increased to $676.3 million on sales, marketing, and R&D spend.
Annual recurring revenue reached $3.36 billion, up about 25% year over year, with CFO highlighting a Rule‑of‑62 efficiency profile alongside strong margins and free cash flow.
CEO Jay Chaudhry said AI adoption is driving demand for security, while recent trading showed investor caution with the stock down roughly 26% year to date and off about 9% post‑report.