Zscaler, Inc. (ZS), a California-based digital security solutions company, reported a wider net loss in the third quarter on Tuesday. However, on an adjusted basis, earnings for the quarter trumped Wall Street view, driven by strong revenue growth.
Net loss for the quarter was $58.5 million or $0.43 loss per share, compared to $19.3 million or $0.15 per share in the same quarter last year.
Leaving special items, adjusted profit $21.4 million or $0.15 per share. In the same period last year, the adjusted income was $10.3 million or $0.07 per share. On average, 25 analysts polled by Thomson Reuters estimated earnings of $0.07 per share for the third quarter.
The widening of the loss can be influenced by an increase in operating expenses to $181 million from $106 million last year.
The company recorded a 60% improvement in revenue to $176.4 million from $110.7 million last year. Twenty-four analysts had a consensus revenue estimate of $163.71 million revenue for the quarter.
Looking forward, the company sees revenue of $185 million to $187 million in the fourth quarter with an adjusted income of $0.08 to $0.09 per share. Analysts currently expect revenues to be $173.89 million and earnings of $0.09 per share.
For the full year, the company expects revenue of $660 million to $664 million with an earning of $0.47 per share while the analysts forecast revenue of $638.21 million with an earning of $0.4 per share.
Separately, Zscaler said it has agreed to acquire Smokescreen Technologies. The transaction is expected to close during Zscaler’s fiscal fourth quarter. The company did not disclose any financial details of the deal.
Zscaler is currently trading at $186.80 in the aftermarket, 8.14% or $14.06 higher than $172.74 at close on Tuesday. In the 52-week period, the stock has ranged from $69.83 to $230.88.
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