Zscaler Stock Jumps on Unexpected Profit

Shares of cloud security provider Zscaler (ZS) surged Friday, a day after it released third-quarter results that easily beat estimates.

Zscaler posted a surprise profit for the quarter of $19.1 million, or 12 cents per share, up from a loss of $46.05 million, or 32 cents per share, in the third quarter last year. Analysts expected Zscaler to lose $37 million, or 24 cents per share, according to consensus estimates compiled by Visible Alpha.

Revenue of $553.2 million was up 32% from last year and topped analysts’ expectations of $535.2 million.

Q4 Revenue Guidance Mostly in Line With Estimates

Zscaler’s fourth-quarter revenue guidance of $565 million to $567 million, which would be up nearly 25% from the prior-year’s reported figure, is mostly in line with estimates of $567.6 million.

Zscaler projects current-quarter adjusted net income to range between $107 million and $109 million, slightly below the $115.1 million analysts estimate. In last year’s fourth quarter, the company reported adjusted profit of $100.9 million after accounting for one-time expenses like stock-based compensation.

The cybersecurity industry has been in a tough spot in recent months, with profit and sales projections from other cloud and cybersecurity providers like Palo Alto Networks (PANW) and Cloudflare (NET) dragging down stocks around the industry.

Zscaler shares were up more than 7% to $167.97 as of 11:03 a.m. ET Friday, but are still down about 24% for the year.