Zscaler stock tanks on Q2 earnings report

Zscaler Inc (NASDAQ: ZS) just reported better-than-expected financial results for its second quarter. Shares of the cloud security company are still losing in extended hours.

Why is Zscaler stock down in after-hours?

The price action is particularly interesting considering $ZS issued good enough guidance for the future as well. Zscaler now forecasts its revenue to fall between $534 million and $536 million in Q3.

Analysts, in comparison, were at $531 million. Jay Chaudhry – the chief executive of Zscaler Inc said in a press release today:

The Nasdaq-listed firm expects up to 65 cents a share of adjusted per-share earnings in the third quarter - also ahead of estimates. Zscaler stock is still up a little under 200% versus its 52-week low.

Zscaler Q2 earnings snapshot

• Lost $28.5 million versus the year-ago $57.5 million
• Per-share loss also narrowed from 40 cents to 19 cents
• Adjusted EPS printed at 76 cents as per the earnings report
• Revenue jumped 35% year-over-year to $525 million
• Consensus was 58 cents a share on $507.6 million in revenue

Zscaler saw its calculated billings and deferred revenue increase by 27% and 35%, respectively, in the second quarter. CEO Chaudhry also said on Thursday:

$ZS was recently reported in talks to buy Avalor. Wall Street currently has a consensus "overweight" rating on Zscaler shares.