Zscaler stock jumps after unexpected gain

Shares of cloud security provider Zscaler (ZS) rose on Friday, a day after it reported third-quarter results that easily topped estimates.

Zscaler reported a surprise profit for the quarter of $19.1 million, or 12 cents per share, compared with a loss of $46.05 million, or 32 cents per share, in last year’s third quarter. Analysts expected Zscaler to lose $37 million, or 24 cents a share, according to consensus estimates compiled by Visible Alpha.

Revenues of $553.2 million increased 32% from last year and exceeded analyst expectations of $535.2 million.

Revenue forecasts for the fourth quarter are mostly in line with estimates

Zscaler’s fourth-quarter revenue forecast of $565 million to $567 million, up nearly 25% from year-earlier numbers, is mostly in line with estimates of $567.6 million.

Zscaler forecasts adjusted net income for the current quarter of $107 million to $109 million, slightly below analyst estimates of $115.1 million. In last year’s fourth quarter, the company reported adjusted earnings of $100.9 million after accounting for one-time expenses such as stock-based compensation.

The cybersecurity industry has found itself in a difficult situation in recent months, with earnings and sales forecasts for other cloud and cybersecurity providers such as Palo Alto Networks (PANW) and Cloudflare (NET) sending shares lower across the industry.

Zscaler shares were up more than 7% to $167.97 as of 11:03 a.m. EST on Friday, but were still down about 24% for the year.