Zscaler Stock Sinks Despite Q1 Earnings Beat

Zscaler, Inc. (NASDAQ:ZS) shares dropped after the company released its first-quarter earnings report after Tuesday's closing bell, despite beating analyst estimates on the top and bottom lines. 

Here's a look at the details in the report. 

• ZS stock is moving. Watch the price action here.

The Details: Zscaler reported quarterly earnings of 96 cents per share, which beat the Street estimate of 86 cents.

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Quarterly revenue clocked in at $788.1 million, which beat the analyst estimate of $773.75 million, according to data from Benzinga Pro.

Deferred revenue was $2.35 billion as of Oct. 31, 2025, an increase of 32% year-over-year.

“Our outstanding Q1 results demonstrate the strong demand we are experiencing for our Zero Trust and AI Security platform,” said Jay Chaudhry, CEO of Zscaler.

“With over $3.2B in Annual Recurring Revenue, growing over 25% year-over-year, and Rule-of-78 performance, I’m very pleased to share that an increasing number of customers are relying on our platform for better security, lower operational costs and reduced IT complexity,” Chaudry added.

Outlook: Zscaler raised its fiscal 2026 adjusted EPS guidance to a range of $3.78 to $3.82, versus the $3.68 analyst estimate, and raised its fiscal revenue outlook to a range of $3.7 billion to $3.72 billion, versus the $3.28 billion estimate.

ZS Stock Price: According to data from Benzinga Pro, Zscaler stock fell 7.77% to $267.21 in Tuesday's extended trading.  

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