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Reasons Behind the Surge in ZeroFox Shares Today

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Reasons Behind the Surge in ZeroFox Shares Today

Shares of ZeroFox Holdings IncĀ (ZFOX) have seen a significant increase of approximately 10% following the release of better-than-expected Q2 FY24 results and above-consensus Q3 guidance.

In the latest report, ZeroFox reported revenue of $62.2 million, surpassing the consensus estimate of $51.82 million. The adjusted EPS loss of $(0.04) was also better than the expected $(0.09) loss.

Notably, the company’s Annual Recurring Revenue reached $181.8 million, and it ended the quarter with 1,304 subscription customers.

Furthermore, the number of subscription customers with an Annual Recurring Revenue greater than $100,000 increased by 35% year-over-year to a total of 175.

Adjusted gross margin stood at 38%, with an adjusted subscription gross margin of 72%.

As of July 31, 2023, the company had $28.8 million in cash and cash equivalents.

According to James C. Foster, the Chairman and CEO, “We had an exceptional quarter, achieving record highs in quarterly revenue, Annual Recurring Revenue, subscription customers, large customer adoption, and positive free cash flow for the first time. The increasing demand for our external cybersecurity platform demonstrates the growing need and trust we are establishing with our customers by offering a comprehensive solution to address cyber threats beyond traditional boundaries.”

Projected Performance: ZeroFox anticipates Q3 revenue to be between $55.0 million and $57.0 million, surpassing the consensus estimate of $50.37 million.

The company expects an adjusted loss from operations ranging from $(6.2) million to $(5.4) million.

For FY24, the company projects revenue of $214.0 million to $217.0 million, compared to the estimates of $200.68 million (previously expected $198.0 million to $202.0 million).

It also estimates an adjusted loss from operations ranging from $(27.0) million to $(25.0) million, as opposed to the previous projection of $(28.0) million to $(26.0) million.

Market Response: ZFOX shares have surged by 10.57% to $1.15 in premarket trading on Wednesday.