Shares in Zscaler Inc. edged up more than 2% in late trading today after the cloud security company impressed with revenue and earnings beats in its 2025 fiscal fourth quarter.

For the quarter that ended on July 31, Zscaler reported adjusted earnings per share of 89 cents, up from 72 cents in the same quarter of last year, on revenue of $719.2 million, up 21% year-over-year. Both figures were ahead of the 81 cents per share in profit and revenue of $707.9 million expected by analysts.

Zscaler delivered cash flow from operations of $250.6 million, up from $203.6 million a year ago. As of the end of July, Zscaler had deferred revenue of $2.448 billion, up 30% year-over-year and the company had $3.5732 billion in cash, cash equivalents and short-term investments on hand.

Business highlights in the quarter included an announcement in May that Zscaler had agreed to enter a definitive agreement to acquire managed detection and response firm Red Canary Inc. for an undisclosed sum.

The acquisition, which was completed by Aug. 1, brings together Zscaler’s zero-trust platform with Red Canary’s domain expertise in threat detection and response, spanning endpoints, identity, network and cloud workloads. The combination of the technology from the two companies addresses the operator pain points that often lead to missed signals, incomplete threat analysis and increased vulnerability to undetected threats.

In June, Zscaler announced a series of product updates designed to help enterprises extend zero-trust security across their distributed environments. The updates included new offerings for securing remote and cloud-native infrastructures, as well as artificial intelligence-powered tools for data classification, threat detection and segmentation.

“We had an outstanding Q4, in which we achieved a new milestone of more than $3 billion of annual recurring revenue while achieving our highest ever operating margin for a quarter,” Chief Executive Jay Chaudhry said in the company’s earnings release. “We believe Zscaler’s Zero Trust and AI security solutions are imperative in today’s world and are driving robust demand.”

For its full 2025 fiscal year, Zscaler reported adjusted earnings per share of $3.28, up from $2.60 in fiscal year 2024, on revenue of $2.673 billion, up 23% year-over-year.

For its fiscal 2026 first quarter, Zscaler expects adjusted earnings per share of 85 to 86 cents on revenue of $772 million to $774 million. The earnings outlook at the midpoint was ahead of the 85 cents per share expected by analysts, while the revenue outlook was healthily ahead of an expected $752 million.

For its full fiscal year 2026, the company expected adjusted earnings per share of $3.64 to $3.68 on revenue of $3.265 billion to $3.284 billion.

Deepen Desai, chief security officer of Zscaler, spoke with theCUBE, SiliconANGLE Media’s livestreaming studio, in August, when he discussed how the company is sharpening its zero-trust approach as ransomware threats escalate.

Photo: Zscaler