Enterprise clients have been cutting back on critical security expenditures, as high interest rates and signs of an uncertain macroeconomic environment pressure their overall technology budgets.
Zscaler's results stand in contrast to those of its sector peers Palo Alto Networks(PANW.O) and SentinelOne(S.N), both of which provided strong annual revenue forecasts last month following a global tech outage in July attributed to CrowdStrike (CRWD.O).
The threat of cybercrimes, including hacks and data breaches, has become more prevalent with large firms such as Advanced Micro Devices (AMD.O) and Microsoft (MSFT.O), which have experienced some form of cyber breach in recent months.
Zscaler forecast full-year revenue in the range of $2.60 billion to $2.62 billion, while analysts expected $2.63 billion, according to LSEG data.
It forecast full-year adjusted net income of $2.81 to $2.87 per share, compared with estimates of $3.33.
For the first quarter, the company forecast revenue between $604 million and $606 million, compared with the average analysts' estimate of $602.8 million.
It expects adjusted earnings per share to be between 62 cents and 63 cents for the quarter, which falls short of the Street estimates of 73 cents.
Zscaler reported fourth-quarter revenue of $592.9 million for the period ended July 31, above LSEG estimate of $567.9 million.
On an adjusted basis, the company posted earnings of 88 cents per share, surpassing the estimates of 69 cents.
