Zscaler (NASDAQ:ZS) saw its shares slide around 4% intra-day today after issuing softer-than-expected guidance for the current quarter. This overshadowed the company’s stronger-than-anticipated fiscal first-quarter results and an upward revision to its annual outlook.
For the quarter ending, Zscaler reported earnings per share (EPS) of $0.77, surpassing the $0.63 consensus estimate. Revenue reached $628 million, exceeding analyst expectations of $605.4 million. However, calculated billings grew 13% year-over-year to $516.7 million, marking a significant slowdown from the 27% growth reported in the previous quarter.
Guidance for the second quarter projected adjusted EPS between $0.68 and $0.69 on revenue of $633 million to $635 million. This was in line with Wall Street expectations of $0.68 EPS on $633.1 million in revenue.
For the full fiscal year, Zscaler raised its outlook, now anticipating adjusted EPS of $2.94 to $2.99 on revenue between $2.62 billion and $2.64 billion. This was an improvement from its prior guidance of $2.81 to $2.87 EPS on revenue of $2.60 billion to $2.62 billion.
Despite the solid Q1 results, analysts expressed concern over the notable deceleration in billings growth. Guggenheim analysts highlighted the moderation in business momentum, emphasizing the sharp decline in billings growth compared to the previous quarter.
Adding to investor unease, Zscaler announced the retirement of its chief financial officer, Remo Canessa, alongside the earnings release.