Zscaler Inc (NASDAQ:ZS) reported its first-quarter fiscal 2026 financial results on Tuesday after market close. Despite beating consensus estimates, the stock fell 8% in early pre-market trading. The company posted an operating loss of $36.4M, accounting for 5% of its revenue. However, on a non-GAAP basis, Zscaler reported net income of $159.5M (EPS $0.96) and strong free cash flow, reflecting profitability once non-cash expenses are excluded.
#Investor Takeaway
Zscaler's financial results indicate ongoing operational challenges as it reported a significant GAAP operating loss, though non-GAAP profitability and cash flow trends remain strong.
#Market Impact
The decline in Zscaler's stock highlights investor concerns despite positive earnings relative to expectations. The market reaction suggests a cautious sentiment towards the company’s financial health and future profitability.
#What’s Next
Investors should monitor Zscaler's upcoming quarterly earnings and any guidance provided regarding future performance, especially as integration of its recent acquisitions progresses.