Image Source: Unsplash

Yesterday, cloud security provider Zscaler’s (Nasdaq: ZS) announced its fourth quarterly performance that outpaced market expectations. The company continues to focus on growth through AI offerings.

Zscaler’s Financials

Zscaler’s fourth quarter revenues grew 21% to $719.2 million, ahead of analyst expectations of $706.9 million. Non-GAAP earnings grew 23% to $0.89 were also ahead of the consensus estimate of $0.80. During the quarter, the company hit the milestone of more than $3 billion in annual recurring revenue.

Its calculated billings rose 32% to $1.2 billion, compared with estimates of $1.14 billion.

Zscaler ended the year with revenues growing 23% to $2.67 billion and an EPS of $3.28 compared with $2.60 a year ago.

Looking ahead, Zscaler expects current quarter revenues of $3.265-$3.284 billion, compared to market estimates of $3.2 billion. EPS outlook of $3.66 was in line with market forecasts.

Zscaler’s AI Growth

Last quarter, Zscaler continued to enhance its AI portfolio. It recently announced the launch of AI-powered security innovations, including Zscaler AI Guard that will focus on stopping attacks, protecting sensitive data, and ensuring regulatory compliance to enable businesses to adopt AI securely. Earlier in the quarter, the company had announced the acquisition of Red Canary which was completed earlier this month.

It is now leveraging the acquisition to drive improved AI offerings. Recently, Zscaler announced an expanded partnership between Red Canary and its strategic partner CrowdStrike to deliver enhanced protection across endpoints, users, and workloads. By integrating the Zscaler Zero Trust Exchange platform, the AI-native CrowdStrike Falcon platform, and Red Canary’s agentic-AI driven security operations platform, Zscaler wants to provide customers with access to a multi-layered defense system.

Red Canary’s agentic-AI driven managed detection and response (MDR) will leverage deep endpoint context from CrowdStrike’s Falcon platform and will be enhanced by the user context from Zscaler Zero Trust Exchange platform to improve threat detection accuracy and response time. This combination of offerings will deliver an enhanced user and endpoint context, and an automated workflow that would deliver a much faster response to stop and neutralize threats.

Zscaler also extended its AI offerings to enable Zero Trust communication for IoT and OT through the launch of Zscaler Cellular. Zscaler Cellular will eliminate the need for additional software while providing zero attack surface by isolating each device. As organizations deploy IoT/OT devices across diverse environments, traditional firewall and VPN-based security models fail to meet the security demands. Zscaler Cellular will work on securing the IoT and mobile devices using a SIM card and without requiring additional software agents or using remote access VPNs. Zscaler Cellular is the industry’s first Zero Trust solution to secure IoT/OT connectivity using only a SIM card by isolating each device and routing all connections through the AI-powered Zscaler Zero Trust Exchange.

Meanwhile Zscaler’s stock is trading at $274.57 with a market capitalization of $42.7 billion. It has recovered from the 52-week low of $153.45 that it had fallen to in September last year. It was trading at a 52-week high of $318.46 in July.

More By This Author:

Cloud Stocks: Can Nvidia Sustain The Most Valuable Public Company Status?
Cloud Stocks: ARM Wants To Pivot To Chip Building From Chip Designing
Can CRISPR Therapeutics’ Build On Gene-Editing Treatments?