It was a classic case of "good news, bad news" for Zscaler Inc. (ZS) on Thursday. The cybersecurity company delivered a solid quarterly earnings beat, but investors focused on the lowered revenue outlook, sending shares sharply lower after the bell.

Here's the deal: Zscaler reported fiscal second-quarter earnings of $1.01 per share, handily beating the analyst consensus of 90 cents. Revenue came in at $815.75 million, also topping the expected $798.82 million. So far, so good.

But the guidance is where things got tricky. For the full fiscal year 2026, the company raised its adjusted earnings per share outlook from $3.99 to a range around $4.02, which is above the $3.81 estimate. The problem? It also lowered its revenue outlook to a new range of $3.31 billion to $3.32 billion. While that's still above the $3.3 billion estimate, the downward revision was enough to spook the market.

The stock reacted accordingly, falling 9.06% to $152.19 in extended trading. Sometimes beating estimates isn't enough if the future looks a little less bright than before.

CEO Jay Chaudhry tried to steer the narrative toward the long-term opportunity, stating: "We believe Zscaler is the cybersecurity platform for the AI age — our in-line Zero Trust platform is uniquely architected to secure the unprecedented speed and scale of AI and agentic workflows." It's a compelling pitch, positioning the company at the intersection of two hot trends: cybersecurity and artificial intelligence.

For now, though, the market is focused on the numbers. The quarter was strong, but the guide was weaker. Investors are left weighing a solid present against a slightly tempered future.