It was a tale of different outcomes in security company quarterly earnings reports today, with Zscaler Inc. shares surging and SentinelOne Inc. falling, the latter on a missed metric on outlook.

For the quarter that ended on April 30, Zscaler reported adjusted earnings per share of 88 cents, up from 48 cents in the same quarter of last year, on revenue of $553.2 million, up 32% year-over-year. Both were beats, as analysts had expected adjusted earnings of 65 cents per share on revenue of $535.93 million.

The company saw adjusted income from operations in the quarter of $121.8 million, up from $63.9 million in the same quarter of previous year. Deferred revenue sat at $1.577 billion as on April 30, up 34% year-over-year, and Zscaler had $2.24 billion in cash, cash equivalents and short-term investments on hand.

Recent business highlights include Zscaler’s announcement on April 11 that it had entered an agreement to acquire network access and segmentation tech provider Airgap Networks Inc. for an undisclosed sum. Zscaler plans to integrate Airgap’s network segmentation and security access technologies into its Zero Trust SD-Wan suite.

More recently on May 14, it unveiled new artificial intelligence innovations for its AI Data Protection Platform, including natively integrated data security posture management and real-time email data loss protection that aim to streamline data security and reduce complexity across multiple environments.

For its fiscal 2024 fourth quarter, the company expects adjusted earnings per share of 69 to 70 cents on revenue of $565 million to $567 million. For the full fiscal year, the company expects adjusted earnings of $2.99 to $3.01 on revenue of $2.14 billion to $2.142 billion. For the full year, analysts had expected $2.76 and $3.01.

Jordan Berger, analyst at global research firm Third Bridge Group Ltd., told SiliconANGLE that Zscaler’s growth surpassed expectations and higher guidance indicates “growing momentum.”

“Despite increasing competition from formidable cybersecurity peers, our experts tell us that Zscaler remains a leader in the fast-growing market for SASE capabilities  capabilities which are a key priority for security buyers in 2024,” Berger added. Zscaler shares jumped over 17% in late trading.

Chief Analyst Dave Vellante from SiliconANGLE sister division theCUBE Research added, “investors took Zscaler shares down last quarter because the company guided toward a fourth quarter ramp. It turns out those forecasts were conservative and the risks appear to be moderated. People are still concerned about Zscaler seeing more SASE competition from Palo Alto Networks, Fortinet, Microsoft and others but the company’s pure play focus on that space and a revamped go to market approach give it an advantage in my view.”

SentinelOne didn’t fare as well as Zscaler as its shares fell 12% after the earnings print. Across its headline metrics, SentinelOne’s results were in no way bad, with beats on revenue and earnings. For its 2025 fiscal first quarter that ended on April 30, SentinelOne reported an adjusted loss one cent per share, ahead of the five-cents-per-share loss expected by analysts, on revenue of $186.4 million, ahead of an expected $181.1 million.

One of the reasons SentinelOne shares fell so much in late trading comes down to one metric and though it was a miss, it wasn’t a huge miss: Annualized recurring revenue from subscription-based services rose 35% year-over-year, to $762 million, but fell short of an expected $765.2 million.

For its fiscal 2025 second quarter, SentinelOne expects revenue of $197 million and for the full fiscal year, $808 million to $815 million.

“Despite beating revenue estimates … persistent macroeconomic headwinds cited by management and a minor guidance reduction for full-year FY25 revenue signaled SentinelOne is not yet out of the woods after last year’s tight spending environment,” Third Bridge’s Berger explains.

“Our experts tell us that CrowdStrike’s premium positioning in the endpoint security market continues to exacerbate macroeconomic pressures impacting SentinelOne,” Berger added. “SentinelOne’s ability to meaningfully expand outside of its core XDR market and into fast-growing cybersecurity markets like cloud security still remains to be seen.”

Vellante commented, “I’m much more focused on SentinelOne’s path to profits and its free cash flow which appear to be still on track. The macro headwinds are a concern especially for the small and midsized sectors but the company has a shot at hitting a $1B revenue run rate next calendar year which would be a major milestone.”

Sam Curry, global vice president and chief information security officer of Zscaler, spoke with theCUBE, SiliconANGLE Media Inc.’s livestreaming studio, on May 9 about how the company was using AI to tackle emerging threats:

Photo: Zscaler