Zscaler Inc. (ZS) reported a wider loss in the third quarter of 2019 helped by higher costs and expenses despite a 61% jump in revenue. However, the results exceeded analysts’ expectations. The cloud security company issued guidance for the fourth quarter and lifted its earnings and revenue forecast for the full year 2019.
Net loss widened to $12.24 million from $8.77 million in the previous year quarter, while loss per share narrowed to $0.10 from $0.14 a year ago on higher weighted average shares used in computing per share. Adjusted earnings were $0.05 per share, compared to a loss of $0.04 per share a year earlier.
Revenue jumped by 61% year-over-year to $79.1 million. Calculated billings soared 55% to $84.7 million. Deferred revenue surged by 69% to $211.5 million.
Looking ahead into the fourth quarter, the company expects total revenue in the range of $81 million to $83 million and adjusted earnings in the range of $0.01 to $0.02 per share. For fiscal 2019, the company lifted its total revenue outlook to the range of $298 million to $300 million from the prior range of $289 million to $291 million. Adjusted earnings guidance for the full year is raised to the range of $0.16 to $0.18 per share from the previous range of $0.11 to $0.13 per share.
For the full year 2019, the company raised its calculated billings forecast to the range of $379 million to $381 million from the previous estimates range of $365 million to $370 million. Adjusted income from operations is now anticipated to be in the range of $17 million to $19 million.
The company said it has made strategic investments in its business to capture significant market opportunity. Zscaler believed its future to be robust as the need for cloud security increases when enterprises move their applications to the cloud. Also, the company’s architecture was built for local internet breakouts and zero-trust network access.
Also read: Uber Technologies Q1 2019 earnings results
During the third quarter, the company has significantly expanded cloud capacity with the addition of over 2 terabits per second of Internet Exchange and Transit Services and the opening of three new data centers in Beijing, Stockholm, and Atlanta. Zscaler has acquired Appsulate Inc., a developer of next-generation browser-based access technology.
Shares of Zscaler ended Thursday’s regular session up 2.59% at $72.99 on the Nasdaq. Following the earnings release, the stock inched down over 2% in the after-market session.
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