Zscaler Shares Drop Following Weak Guidance and CFO Retirement Announcement

The cybersecurity firm's Q1 earnings exceeded expectations, but slower billings growth and cautious revenue projections disappointed investors.

Zscaler reported Q1 fiscal 2025 revenue of $628 million, up 26% year-over-year, and adjusted EPS of $0.77, both surpassing analyst expectations.
Billings totaled $516.7 million, marking a 43% sequential decline and raising concerns about growth momentum.
The company provided Q2 revenue guidance of $633–$635 million and adjusted EPS of $0.68–$0.69, aligning with or slightly below market estimates.
Zscaler announced that CFO Remo Canessa will retire once a successor is named, with the decision not linked to any disagreements with company policies or practices.
Despite strong free cash flow and a positive long-term outlook leveraging AI and Zero Trust technologies, shares fell over 6% due to investor concerns about billings and leadership changes.