Zscaler stock jumps 15% after the company reveals a revenue and billings surge in its latest earnings report

• Zscaler stock jumped as much as 15.45% on Wednesday.
• The rise came after a 60% jump in revenue and a 71% increase in billings in the fiscal third quarter.
• Zscaler also increased its fiscal year 2021 after the quarter, citing a strong strategic position.

Zscaler stock jumped as much as 15.45% on Wednesday after the company reported strong fiscal third-quarter earnings, topping revenue and billings expectations.

The San Jose, California-based cloud security firm saw its revenue jump 60% in the third quarter of the fiscal year 2021 to hit $176.4 million, topping analyst estimates by more than $12 million.

Calculated billings also grew 71% year-over-year to $225.0 million, according to a press release from the company.

Dan Ives of Wedbush Securities revealed billings beat the Street's expectations by more than 20% as well.

Free cash flow also reached a record in the third quarter at $55.8 million, or 32% of revenue, compared to $9.1 million, or just 8% of revenue in the third quarter of fiscal 2020.

"We delivered outstanding results for the third quarter, with revenue growth accelerating to 60% year over year and free cash flow reaching a new record," said Jay Chaudhry, Chairman and CEO of Zscaler. "Our Zero Trust Exchange platform is helping customers realize their digital transformation goals and architect for the new normal of the work-from-anywhere economy."

Zscaler also increased its fiscal year guidance in the quarter. The company now expects non-GAAP income from operations of between $71 million and $72 million on annual revenues of $660 million to $664 million for the fiscal year 2021.

"Our strategic position with customers continues to strengthen, and we are executing well on our go-to-market initiatives. With strong business momentum, we are pleased to again increase our fiscal year guidance," Chaudhry said in a press release.

Zscaler also got some analyst support on Wednesday. In a note to clients, Wedbush's Dan Ives said Zscaler is "the best pure-play in the cloud security arena" and reiterated his "outperform" rating.

Ives holds a $240 price target on shares of the cloud security company, representing a potential 21% jump from Wednesday's intraday high.

BMO Capital Markets upgraded its rating for Zscaler to "outperform" from "market perform" and increased its price target to $225 on Wednesday as well.

BMO is forecasting a "long runway for organic growth" at Zscaler and sees new products providing tailwinds in a large total addressable market.

Zscaler stock traded up 13.10% as of 11:37 a.m. ET on Wednesday.