Zscaler shares fell 3.46% to $171.65 in Friday premarket trading after initially rising 5% following fourth-quarter results that exceeded estimates and first-quarter guidance above consensus. Adjusted earnings per share reached $1.19, while revenue totaled $898.2 million, up 25% year over year, with a 77% gross profit margin. Annual recurring revenue rose 25% to $3.77 billion, including $246 million in net new ARR and $141 million from the Red Canary acquisition. Excluding that acquisition, ARR grew 20% to $3.63 billion and net new ARR increased 17%. Zscaler forecast first-quarter adjusted EPS of $1.15 to $1.16 and revenue of $935 million to $939 million. Analysts including JPMorgan, Stephens, Needham, Stifel, Scotiabank, Canaccord Genuity and RBC Capital maintained or raised their ratings and price targets; RBC raised its target to $210 and kept an Outperform rating, citing strong financial results and AI innovation. The company also disclosed a 3% workforce reduction and two senior sales leadership hires, while management described artificial intelligence as both a security threat and a growth opportunity.