On a rather gloomy Wednesday, the stock market played its usual game of musical chairs-only this time, Zscaler (ZS) found itself without a seat when the music stopped. Despite trotting out what could only be described as a splendid fourth-quarter earnings report, the cybersecurity giant watched its share price crumble like a soggy biscuit, slipping by 1.4%. Meanwhile, the ever-cheerful S&P 500 (^GSPC) strutted forward with a jaunty 0.5% gain, leaving Zscaler to sulk in the shadows.
A Splendiferous Surge in Numbers
Let us peer into the murky cauldron of Zscaler’s fiscal 2025 finale, shall we? After the closing bell on Tuesday, the company unveiled numbers that would make even the greediest goblin grin. Revenue swelled by an impressive 21% year-over-year, bubbling up to just over $719 million. And lo and behold, their annual recurring revenue (ARR), that peculiar beast of modern finance, grew at a similarly sprightly pace of 22%, reaching nearly $3.02 billion.
But wait, there’s more! Non-GAAP adjusted net income-a phrase so delightfully dull it might lull you to sleep-leapt ahead by 27%, landing at almost $147 million ($0.89 per share). These figures weren’t merely satisfactory; they were positively jaw-dropping compared to the analysts’ dreary forecasts. The consensus had pegged revenue at a measly $707 million and earnings at a paltry $0.80 per share. Oh, how those poor prognosticators must have gnashed their teeth!
What sorcery fueled such success? The answer lies in humanity’s growing paranoia about cyber threats-a veritable smorgasbord for companies like Zscaler. Add to that the frothy enthusiasm for artificial intelligence (AI), which has clients scrambling to scale up their defenses faster than a frightened rabbit fleeing a fox. In this fertile landscape, Zscaler stands tall, gleefully ticking all the right boxes while investors rub their hands together in anticipation. Perhaps too much anticipation…
The Great ARR Escalation
Now, let us turn our attention to Zscaler’s crystal ball-or, as I prefer to call it, their “prophet-o-matic.” For the entirety of fiscal 2026, the company predicts ARR will swell to a range of nearly $3.68 billion to just shy of $3.70 billion. Beneath this lofty projection, revenue is expected to hover around $3.27 billion to $3.28 billion. As for adjusted net income, it will supposedly stretch between $3.64 and $3.68 per share.
Such bold predictions are enough to make one’s head spin like a top. Yet, dear reader, beware the hubris of corporate wizards who promise golden geese but may deliver nothing more than squawking chickens. Investors, drunk on dreams of double-digit growth, might find themselves tumbling down a rabbit hole if reality fails to match these grandiose visions.
And so, we leave Zscaler where we found it: perched precariously between triumph and tribulation, its fate hanging in the balance like a trapeze artist without a safety net. Only time will tell whether it soars or plummets-but isn’t that always the way with these things? 😏
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2025-09-04 00:56