Zscaler reported adjusted/non-GAAP earnings per share (EPS) of USD 0.15 for Q3 2021 ending April 30, 2021, more than double the analyst estimates and EPS of Q3 2020 of USD 0.07. Revenues during the quarter grew by almost 60% year-over-year (YoY). 

The adjusted gross profit margins for the quarter amounted to 80.8%, relatively flat compared to the gross profit margin of 79.6% during Q3 2020. Adjusted operating profits amounted to USD 23.2 million in Q3 2021, up 137% from the corresponding period last quarter. Adjustments to the earnings figures primarily relate to stock-based compensation and related taxes, litigation expenses, impairment, and amortization costs.

For the following quarter, management expects revenue to range between USD 185 million-USD 187 million (implied growth of 47.0% to 48.5%), with adjusted EPS to range between USD 0.08 and USD 0.09. For full-year FY2021, revenue is expected to range between USD 660 million and USD 664 million (implied growth of 53.0% to 54.0%), with EPS at USD 0.47. Zscaler’s share price spiked 6.6% in after-hours trading following the announcement.

Zscaler also announced the acquisition of Mumbai-based Smokescreen Technologies. Through the acquisition, Zscaler expects to absorb Smokescreen’s active defense technology to bolster its own detection capabilities to identify cyber attacks proactively. The transaction is expected to close during Zscaler’s fourth fiscal quarter, though the deal’s financial terms were not disclosed.