Zscaler Expects Q1 Adjusted EPS in $0.85-$0.86 Range

Zscaler, Inc., a security software company, expects Q1 adjusted EPS to be between $0.85 and $0.86. The company specializes in cloud-based security solutions, with a focus on its Zero Trust Exchange platform. Net sales are geographically distributed with 50.4% in the US, 31% in Europe-Middle East-Africa, 15.1% in Asia-Pacific, and 3.5% in other regions.

Zscaler, Inc. (NASDAQ: ZS), a leading provider of cloud-based security solutions, is set to report its Q1 2025 earnings this Tuesday afternoon. The company's Zero Trust Exchange platform is expected to deliver adjusted EPS between $0.85 and $0.86 per share [1].

Zscaler has shown strong performance in recent quarters, beating analysts’ revenue expectations by 1.6% in the last reported quarter. The company reported revenues of $678 million, up 22.6% year on year. This quarter, analysts are expecting Zscaler’s revenue to grow 19.4% year on year to $707.7 million, slowing from the 30.3% increase it recorded in the same quarter last year [1].

Zscaler has a history of exceeding revenue expectations. Over the last two years, the company has only missed Wall Street’s revenue estimates once, exceeding top-line expectations by 3% on average. The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings [1].

The Security Service Edge (SSE) market, in which Zscaler operates, is experiencing significant growth. The market size was USD 6.17 billion in 2024 and is expected to reach USD 33.27 billion by 2032, growing at a CAGR of 23.4% over the forecast period of 2025-2032. The U.S. continues to lead in adoption, valued at USD 1.44 billion in 2024 and projected to hit USD 7.25 billion by 2032, growing at a CAGR of 22.4% [2].

Zscaler's peers in the cybersecurity segment have also reported strong Q2 results. Palo Alto Networks delivered year-on-year revenue growth of 15.8%, beating analysts’ expectations by 1.4%, and Varonis Systems reported revenues up 16.7%, topping estimates by 2.8% [1].

Positive sentiment among investors in the cybersecurity segment has been evident, with share prices up 3.2% on average over the last month. Zscaler, however, is down 3.1% during the same time and is heading into earnings with an average analyst price target of $316.75 (compared to the current share price of $277.09) [1].

Zscaler's geographical distribution of net sales is as follows: 50.4% in the US, 31% in Europe-Middle East-Africa, 15.1% in Asia-Pacific, and 3.5% in other regions. The company's focus on cloud-based security solutions aligns with the growing demand for cloud-native and zero-trust security solutions, which is a key driver of the SSE market's growth [2].

In conclusion, Zscaler's Q1 earnings report is expected to provide further insights into the company's performance and growth trajectory. The strong performance of the SSE market and Zscaler's position within it suggest that the company is well-positioned to continue its growth story.

References:
[1] https://finance.yahoo.com/news/zscaler-zs-report-earnings-tomorrow-030054713.html
[2] https://www.globenewswire.com/news-release/2025/09/01/3142194/0/en/Security-Service-Edge-Market-Size-to-Surpass-USD-33-27-Billion-by-2032-Owing-to-Rising-Demand-for-Cloud-Native-and-Zero-Trust-Security-Solutions-Report-by-SNS-Insider.html