05:45 PM EDT, 05/29/2025 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

Zscaler ( ZS ) reported strong Q3 FY 25 results with revenue of $678M beating consensus of $667.1M, while non-GAAP EPS of $0.84 exceeded estimates by $0.08. Billings growth accelerated sequentially to 24.9% ($784.5M), up from 18.3% in Q2, while deferred revenue grew 25.9% Y/Y to $1.98B, benefiting from strong platform expansion and AI uptake from its customer base. The company raised its FY 25 revenue guidance to $2.659B-$2.661B, and its non-GAAP EPS outlook to $3.18-$3.19, both above Street expectations, although we note margin contractions in Q3. Gross margin was down 100 bps Y/Y, and non-GAAP operating margin shrank 40 bps Y/Y to 21.6%. FCF margin also declined to 17.6% from 22.3% in Q3 FY 24. Additionally, ZS announced the acquisition of Red Canary, a Managed Detection and Response provider, projected to close in August 2025. We like the Red Canary acquisition as we believe it will strengthen ZS's Security Operations Center capabilities and help maintain competitiveness with other leading cybersecurity vendors.