Zscaler (NASDAQ:ZS), a cloud security firm that just recently made its stock market debut, saw it shares explode after the company released its very first public financial quarterly report.
The company, which is changing cloud security by helping enterprises such as Amazon Web Services and Microsoft Azure move securely into the new world of cloud and mobility, reported third quarter results ended April 30, on June 7th.
For the quarter, the company posted revenue growth of 49% YOY at $49.2 million. Analysts had been anticipating revenue of just $46 million. A loss of 2 cents was also narrower than the 8 cent loss that analysts had expected.
Looking ahead, Zscaler is forecast revenue of up to $51 million for the fourth quarter and $185 million for fiscal year 2018.
Zscaler (NASDAQ:ZS) made its debut in the market back on March 16th and more than doubled on its first day of trading. The cloud company had priced 12 million shares at $16 and opened much higher at $27.50. Shares closed up roughly 106% at $33 that day.
CEO Jay Chaudhry remarked in a blog post during the debut of the stock, “For decades, enterprises had been building corporate networks to connect users to applications in the data center, and these networks were secured with a multitude of security appliances. The world has changed and network security is becoming irrelevant. We knew that retrofitted security technologies wouldn’t work in this new world, so we set out to redefine security. We started with a clean slate—security born in the cloud for the cloud, deep and wide in functionality,” he said.
Chaudhry said during the earnings call, “In addition to our top-line growth, we had healthy operating performance. Our operating margins improved 9 percentage points year over year, and we generated positive free cash flow for the quarter. We believe these results demonstrate Zscaler’s increased adoption in the marketplace as organizations embrace cloud transformation as they are increasingly relying on the Internet and cloud for business.”
Many analysts have given the stock a rating since its IPO including Credit Suisse, which began with an “outperform” rating and a $33 price target. The firm said at the time, “While relative valuation appears rich, we believe Zscaler’s opportunity is large enough, its secular tailwinds great enough, its offerings compelling enough, and its management team sufficiently capable to execute on its opportunity, exceed embedded expectations, and eventually deliver shareholders profitable long-term growth, in-line with its target model.”
After posting third quarter results, Zscaler (NASDAQ:ZS) is up over 130% since its IPO price.