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Zscaler Raises Annual Revenue Forecast Due to Rising Demand for Cybersecurity Services

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Zscaler (ZS.O) raised its revenue forecast for fiscal 2025 on Wednesday, reflecting growing demand for its cloud-based cybersecurity solutions. Shares of the California-based company surged 6% in after-hours trading.

Enterprises are increasingly investing in AI-powered cybersecurity services to combat the rise in digital scams and online hacking, driving sales for companies like Zscaler. As a result, the company now expects annual revenue for fiscal 2025 to fall between $2.64 billion and $2.65 billion, up from its previous forecast of $2.62 billion to $2.64 billion.

Zscaler also raised its adjusted earnings per share forecast to a range of $3.04 to $3.09, up from the previous expectation of $2.94 to $2.99 per share.

“Growing adoption of Zero Trust and AI is driving strong demand for our platform,” said Zscaler CEO Jay Chaudhry, highlighting the increasing reliance on their services for secure cloud access.

The company projected third-quarter revenue between $665 million and $667 million, slightly below the median analyst estimate of $667.4 million.

In the face of rising cybercrimes, data breaches, online scams, and high-profile hacks, businesses are ramping up their investment in cybersecurity. Zscaler posted second-quarter revenue of $647.9 million, exceeding analysts’ forecast of $635.6 million.

Fraud Prevention Software Firm Riskified Explores Sale

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Riskified, a New York-based company specializing in fraud prevention software for e-commerce, is exploring strategic options, including a potential sale, after attracting interest from multiple parties, according to sources familiar with the matter. The company, originally founded in Israel, is working with investment bank Qatalyst Partners to evaluate takeover approaches, with discussions remaining in the early stages.

Potential buyers for Riskified include digital payment processing firms, online shopping platforms, cybersecurity companies, and private equity firms. However, the sources cautioned that a deal is not assured. Following the news, Riskified’s stock price rebounded, surging nearly 9% on Wednesday.

Riskified, which went public nearly four years ago through an initial public offering, is currently valued at around $860 million. The company has faced significant challenges, with its stock plummeting more than 80% from its peak in September 2021 to its close on Tuesday. Despite its success in providing fraud prevention software for retailers, Riskified has not been profitable since its shares began trading.

For the quarter ending December 31, the company reported a widened net loss of $4.1 million, compared to a loss of $3.3 million in the previous year. This financial setback was partially attributed to the loss of several large customers in some of its key sectors.

Founded in 2013, Riskified provides fraud prevention services to e-commerce businesses, helping retailers protect digital transactions from fraudsters. Notable clients include luxury fashion brand Prada, online travel platform Booking.com, and jewelry brand Swarovski.

US Congressional Panel Urges Americans to Ditch China-Made Routers

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A U.S. congressional committee has called for Americans to remove Chinese-made wireless routers, particularly those produced by TP-Link, citing national security concerns. The House of Representatives Select Committee on China warned that these devices could serve as entry points for Chinese hackers aiming to infiltrate U.S. critical infrastructure. The committee has also urged the Commerce Department to investigate TP-Link Technology Co., the world’s leading seller of Wi-Fi routers by volume, according to research firm IDC.

At a hearing on Wednesday, former NSA cybersecurity director Rob Joyce stated that TP-Link routers exposed users to cyber vulnerabilities, which could be exploited by hackers to launch attacks on U.S. infrastructure. He emphasized the need for action, suggesting that Americans replace these devices to prevent them from being used in cyberattacks. Reports have also surfaced that U.S. authorities are considering a potential ban on the sale of TP-Link routers.

In response, TP-Link denied any links to the Chinese government, asserting that no government controls the design or production of its products. The company further clarified that it had separated from its former Chinese affiliate and now manufactures routers in Vietnam. TP-Link’s president, Jeff Barney, described the committee’s claims as “baseless” and without merit.

During the hearing, Democratic Representative Raja Krishnamoorthi advised against using TP-Link routers, holding one up as an example. He echoed concerns about the growing sophistication of Chinese government-linked hackers, stating that they were approaching parity with U.S. cyber capabilities. Rep. Krishnamoorthi also proposed a more aggressive approach, suggesting the U.S. might need to enlist private companies to counteract hackers.

In 2023, the Cybersecurity and Infrastructure Security Agency (CISA) identified a vulnerability in TP-Link routers that could be exploited to execute remote code. U.S. lawmakers have stressed the need for stronger cyber defenses and more proactive measures to deter Chinese hackers.