Zscaler experiences a decline after announcing a lower earnings prediction.

• On Thursday, only a few cybersecurity stocks increased, including Zscaler, in response to Russia's invasion of Ukraine.
• In its most recent quarter, the company experienced its fastest growth in three years.

On Thursday, the stock of a cybersecurity software maker dropped by as much as 18% after the company released quarterly earnings that were slightly below analysts' expectations.

During regular trading, cybersecurity stocks experienced a more than 10% gain due to fears of cyberattacks related to the Russia-Ukraine conflict, and the overall market staged a late-day rally after an early plunge.

Here’s how the company did:

• According to Refinitiv, analysts expected earnings of 11 cents per share, but the company reported adjusted earnings of 13 cents per share.
• According to Refinitiv, analysts had expected revenue of $242 million, but the actual revenue was $255.6 million.

In the quarter that ended on January 31, Zscaler reported a revenue increase of almost 63%, marking the fastest growth the company had achieved in three years, as stated by CEO Jay Chaudhry. However, the company also reported a net loss of $100.4 million, which was wider than the $67.5 million loss reported in the previous quarter.

Almost every time we engage with customers, they end up spending more on Zscaler products, according to Chaudhry during a conference call with analysts.

The company has experienced significant growth with the addition of more than 560 customers paying over $100,000 annually in the past 12 months, according to Remo Canessa, the finance chief. This growth is partly due to purchases of Zscaler software through Amazon and Microsoft's cloud marketplaces, as stated by Chaudhry.

Zscaler predicted adjusted fiscal third-quarter earnings of 10 cents to 11 cents per share and revenue of $270 million to $272 million, while analysts expected 11 cents in adjusted earnings per share and $256.7 million in revenue.

Zscaler anticipates adjusted earnings per share of 54 cents to 56 cents and revenue of $1.045 billion to $1.05 billion for the full fiscal year, representing almost 56% revenue growth at the midpoint. This is in contrast to the Refinitiv consensus of 52 cents in adjusted earnings per share and $1.01 billion in revenue.

Despite the after-hours move, Zscaler's stock price has fallen 18%, which is more than the 10% decline in the S&P 500 index.

In 2022, Dan Ives of Wedbush names Zscaler, Palo Alto, and Tenable as his top cybersecurity picks.