Zscaler ve 3. čtvrtletí fiskálního roku 2026 překonal u služby Data Security hranici 500 mil. USD ročních opakovaných výnosů (ARR), což představuje meziroční růst o více než 30 %.
Key Takeaways Zscaler is expanding its data security platform as AI adoption raises risks of sensitive information leaks.Data Security ARR tops $500M in Q3 and the solution was in about 70% of Security for AI deals in Q4.A seven-figure Zscaler expansion deal lifted an asset manager's annual spending nearly 40% to over $5M.
Zscaler, Inc. (ZS - Free Report) is strengthening its data security business as companies adopt artificial intelligence (AI) and face growing risks of sensitive information leaks. Its integrated security platform could help enterprises simplify data protection while creating opportunities to win larger deals and expand existing customer relationships.
Data Security has become an important growth driver for Zscaler. In the third quarter of fiscal 2026, its Data Security annual recurring revenues (ARR) crossed $500 million, growing more than 30% year over year. The company offers tools for data discovery, classification, data loss prevention and data security posture management. These capabilities help businesses identify sensitive information and control how it is accessed and shared across cloud applications and endpoints.
Customer demand is also encouraging. In the fourth quarter of fiscal 2026, about 70% of Zscaler’s Security for AI deals included its Data Security solution. This highlights the connection between AI adoption and the need to protect confidential business information. Zscaler also won a seven-figure expansion deal with a global asset management firm that selected its data security posture management solution over a private competitor. The customer’s annual spending increased nearly 40%, reaching more than $5 million in ARR.
The company reported fiscal 2026 revenues of $3.35 billion, up 25% year over year. If data security adoption continues to expand, cross-selling could support future growth and strengthen Zscaler’s position in the AI security market. The Zacks Consensus Estimate for Zscaler’s fiscal 2027 revenues is currently pegged at $3.93 billion, indicating a 17.2% year-over-year increase.
How Do Rivals Fare Against ZS in Data Security Space?Zscaler competes with several cybersecurity players, including Palo Alto Networks, Inc. (PANW - Free Report) and Rubrik, Inc. (RBRK - Free Report) , that are enhancing capabilities in the data security space.
Palo Alto Networks competes with Zscaler through its cloud security and AI-powered security platforms, which help businesses protect applications and sensitive information. In the fourth quarter of fiscal 2026, its revenues grew 34% year over year to $3.41 billion, while Next-Generation Security ARR increased 63% to $9.1 billion. Palo Alto Networks’ broad platform gives customers more options for consolidating security tools.
Rubrik focuses on protecting business data, recovering information after cyberattacks and reducing data-related risks. In the second quarter of fiscal 2027, revenues increased 38% year over year to $427.3 million, while subscription ARR rose 33% to $1.66 billion. Its Rubrik Security Cloud platform also incorporates AI-driven capabilities to strengthen data protection and cyber recovery.
Zscaler’s Price Performance, Valuation & EstimatesZS shares have risen 2.9% year to date, while the Zacks Security industry has surged 82.6%.
Zscaler YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, ZS trades at a forward price-to-sales ratio of 9.27, significantly below the industry’s average of 17.84.
Zscaler Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Zscaler’s fiscal 2027 and 2028 earnings implies a year-over-year increase of 16.6% and 13.3%, respectively. Estimates for fiscal 2027 and 2028 have been revised upward over the past 30 days.
Image Source: Zacks Investment Research
Zscaler currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Pomerantz LLP prověřuje možné porušení federálních zákonů o cenných papírech společností Zscaler. Akcie ZS 27. května klesly o 31,52 % poté, co společnost zveřejnila výhled tržeb pod úrovní tržního konsenzu.
NEW YORK, Oct. 13, 2026 (GLOBE NEWSWIRE) -- Pomerantz LLP is investigating claims on behalf of investors of Zscaler, Inc. (“Zscaler” or the “Company”) (NASDAQ: ZS). Such investors are advised to contact Danielle Peyton at [email protected] or 646-581-9980, ext. 7980.
The investigation concerns whether Zscaler and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.
[Click here for information about joining the class action]
On May 26, 2026, Zscaler reported its financial results for the third quarter of its 2026 fiscal year. Although Zscaler’s revenue and earnings exceeded expectations, the Company guided for current-quarter revenue of between $875 million to $878 million, falling short of the $879 million consensus expectation.
On this news, Zscaler’s stock price fell $58.19 per share, or 31.52%, to close at $126.41 per share on May 27, 2026.
Then, on September 24, 2026, Zscaler announced the departure of Mike Rich from his role as the Company’s Chief Revenue Officer.
On this news, Zscaler’s stock price fell $21.59 per share, or 10.06%, to close at $193.05 per share on September 25, 2026.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com.
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Zscaler očekává ve fiskálním roce 2027 růst tržeb o 17 % oproti 25 % ve fiskálním roce 2026; objednávky zabezpečení AI ve čtvrtém čtvrtletí vzrostly mezikvartálně o více než 50 %.
Key Takeaways Zscaler expects FY27 revenue growth of 17%, down from 25% in FY26, despite rising AI demand.Security for AI bookings surged over 50% QoQ in Q4, highlighting growing demand for AI security products.About 70% of AI security deals included Data Security, while metered offerings ARR grew over 100% in FY26.
Zscaler, Inc. (ZS - Free Report) faces a key challenge as its revenue growth is expected to slow in fiscal 2027. However, rising demand for artificial intelligence (AI) security products could help the cybersecurity company strengthen customer relationships and create new growth opportunities. The key question is whether these offerings can generate enough business to offset slower growth elsewhere.
In fiscal 2026, Zscaler’s revenues increased 25% year over year to $3.35 billion, while annual recurring revenues (ARR) rose 25% to $3.77 billion. However, management expects fiscal 2027 revenues of $3.91-$3.94 billion, implying growth of roughly 17%. This outlook signals that Zscaler must convert new opportunities into revenues to sustain its earlier growth pace.
AI security offers one potential solution. Security for AI bookings grew more than 50% sequentially in the fourth quarter of fiscal 2026. Zscaler is also developing products such as Zero Trust Exchange for Agents and Endpoint AI Security to address risks from AI applications and autonomous agents. These offerings could help enterprises protect sensitive data, manage access and reduce exposure to emerging threats.
The opportunity extends beyond new products. About 70% of Security for AI deals in the fourth quarter included Data Security, creating opportunities to sell additional services to existing customers. Meanwhile, non-seat-based metered offerings accounted for around 30% of new and upsell annual contract value in fiscal 2026, with related ARR growing more than 100% year over year.
Still, strong bookings must translate into sustained revenue growth. Zscaler needs to scale its new AI products, win new customers and expand spending among existing clients. Its AI portfolio could help narrow the growth gap, but execution will determine the impact. The Zacks Consensus Estimate for fiscal 2027 revenues is currently pegged at $3.93 billion, indicating a year-over-year increase of 17.2%.
Can AI Security Sustain Growth for ZS’ Rivals?Palo Alto Networks, Inc. (PANW - Free Report) and Fortinet Inc. (FTNT - Free Report) are among the biggest competitors of Zscaler in the AI security space.
Palo Alto Networks is seeing growing demand for its AI security products as enterprises move more AI workloads into production. Prisma AIRS, the company's AI security platform, surpassed $100 million in ARR in the fourth quarter of fiscal 2026. It reached this milestone within four quarters of general availability, making it the fastest-scaling product in Palo Alto Networks' history. The product also had more than 800 customers, with most of the company's largest transactions in the fourth quarter, including multiple Prisma AIRS modules.
In fourth-quarter fiscal 2026, revenues grew 34% year over year to $3.41 billion, while Next-Generation Security annual recurring revenues surged 63% to $9.1 billion. Revenues from the Network & AI Security segment reached $2.33 billion in the fourth quarter.
Fortinet is another competitor building AI security capabilities across its platform. On Aug. 17, 2026, the company acquired Virtue AI, adding agentic AI red-teaming, continuous AI validation, agent governance and real-time guardrails that complement its FortiAIGate solution for protecting large language models. Fortinet's strategy of integrating networking and security on a single operating system, FortiOS, powered by its proprietary FortiASIC chips, resonates strongly with enterprises modernizing infrastructure for AI.
In the second quarter of 2026, revenues climbed 26% year over year to $2.05 billion, as product revenues soared 52% to $773 million on robust FortiGate unit growth and higher average selling prices. Billings jumped 33% to $2.37 billion. In the second quarter, Fortinet also secured an eight-figure deal from a neocloud provider to protect AI data centers, underscoring its price-to-performance advantage. Customer investments to secure AI workloads and mitigate AI-related risks drove both new business and upgrade activity across the installed base.
Zscaler’s Price Performance, Valuation & EstimatesZS shares have returned 3.9% year to date, while the Zacks Security industry has surged 117.6%.
Zscaler YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, ZS trades at a forward price-to-sales ratio of 9.40, significantly below the industry’s average of 21.34.
Zscaler Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Zscaler’s fiscal 2027 and 2028 earnings implies a year-over-year increase of 16.6% and 13.3%, respectively. Estimates for fiscal 2027 have been revised upward over the past 30 days, while for fiscal 2028 estimates have been raised in the past seven days.
Image Source: Zacks Investment Research
Zscaler currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Společnost Zscaler potvrdila celoroční výhled tržeb ve výši 3,91–3,94 mld. USD a oznámila bezpečnostní spolupráci s IBM a Red Hat; její akcie během seance vzrostly o 6 %.
Zscaler just dropped two pieces of news that sent the entire cybersecurity sector surging well past the broader market, and the debate over whether the rally holds any staying power is only getting louder.
A reaffirmed revenue outlook and a fresh security partnership have pushed cybersecurity to the front of the market, and the group’s leader is setting the pace. Zscaler (NASDAQ:ZS | ZS Price Prediction) shares are up 6% to $230.74, heading a rally that’s lifting the sector’s largest platform vendors along with it.
Meanwhile, Palo Alto Networks (NASDAQ:PANW) stock is up 4% to $415.78, trailing the gain in Zscaler stock while still posting a strong advance for a company of its scale. Also, CrowdStrike Holdings (NASDAQ:CRWD) shares are up 4% to $272.77, another solid climb that sits behind the leader’s.
Broader fund readings confirm that the strength runs well beyond three tickers. The First Trust NASDAQ Cybersecurity ETF (NASDAQ:CIBR) is up 3%, a gain spread across the wider security basket. That compares favorably to the SPDR S&P 500 ETF Trust, which is up 0.5%, leaving cybersecurity far ahead of the broad market.
Reaffirmed Outlook and IBM Pact Lift Zscaler Zscaler reaffirmed its full-year revenue outlook earlier this week, guiding to $3.91 billion to $3.94 billion. Confirming that range eases a worry that has hung over the whole group, namely that enterprise security spending was beginning to slow, a concern that would hit every vendor in the space. For a company holding its guidance, a steady forecast carries more weight than a routine update typically would.
Zscaler made an announcement alongside the outlook. It announced a collaboration with IBM (NYSE:IBM) and Red Hat aimed at protecting private applications during the window between the public disclosure of a software vulnerability and the arrival of a patch. That gap is the period when attackers move fastest, which makes it one of the most exposed moments in any enterprise’s security program, and both items landed earlier in the week, so the rally reflects a continued response to that news.
With Zscaler stock at the front of the rally, Zscaler’s guidance stands as the cleanest evidence available on where security budgets are heading. The cybersecurity fund’s 3% gain, set against the S&P 500 fund’s 0.5% rise, supports that interpretation. A confirmed range from a pure-play zero-trust vendor offers a clear look at whether enterprises are still putting money to upgrading their defenses.
What to Watch Next Zscaler’s bull case is that confirming guidance removes the fear that security spending was slowing. Supporters can also point to the vulnerability window as a problem enterprises pay to solve, which gives the IBM and Red Hat work a clear commercial purpose. On that view, the steady outlook and the new collaboration point in the same direction, toward durable demand for zero-trust security.
However, the bear case deserves equal attention, and it centers on what a repeated forecast can’t deliver, since reaffirming an existing outlook adds no new growth and Zscaler shares have already rallied sharply in the session. That leaves little room for error if the next quarter disappoints.
Shareholders can watch for whether the IBM and Red Hat collaboration turns into customer wins that support Zscaler’s reaffirmed range. Early evidence of demand for the vulnerability-window protection could help settle the debate between those two camps. Position sizes should stay measured, since a stock that has climbed this far can reverse quickly on any stumble.
Contact [email protected] for any questions or corrections.
Pomerantz LLP prověřuje možné porušení zákonů o cenných papírech ve společnosti Zscaler. Akcie ZS po zveřejnění výhledu tržeb pod úrovní konsensu klesly 27. května 2026 o 31,52 %.
, /PRNewswire/ -- Pomerantz LLP is investigating claims on behalf of investors of Zscaler, Inc. ("Zscaler" or the "Company") (NASDAQ: ZS). Such investors are advised to contact Danielle Peyton at [email protected] or 646-581-9980, ext. 7980.
The investigation concerns whether Zscaler and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.
[Click here for information about joining the class action]
On May 26, 2026, Zscaler reported its financial results for the third quarter of its 2026 fiscal year. Although Zscaler's revenue and earnings exceeded expectations, the Company guided for current-quarter revenue of between $875 million to $878 million, falling short of the $879 million consensus expectation.
On this news, Zscaler's stock price fell $58.19 per share, or 31.52%, to close at $126.41 per share on May 27, 2026.
Then, on September 24, 2026, Zscaler announced the departure of Mike Rich from his role as the Company's Chief Revenue Officer.
On this news, Zscaler's stock price fell $21.59 per share, or 10.06%, to close at $193.05 per share on September 25, 2026.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com.
Attorney advertising. Prior results do not guarantee similar outcomes.
Jefferies považuje scénář společnosti Zscaler dosáhnout do fiskálního roku 2031 ARR ve výši 10 miliard USD za ambiciózní; vyžadoval by zrychlení růstu na zhruba 22 % ročně.
Zscaler Inc. (NASDAQ:ZS)’s reaffirmation of its fiscal 2027 guidance supports confidence in its near-term growth outlook, but its $10 billion annual recurring revenue target for fiscal 2031 looks ambitious, Jefferies said.
The cybersecurity company reaffirmed its first-quarter and fiscal 2027 guidance at its investor day, easing concerns about disruption from recent go-to-market leadership changes.
Jefferies said Zscaler’s broader strategy remains unchanged, although management is placing greater emphasis on winning new customers, and expects efficiency to improve over the next six to 12 months.
The bank raised its price target to $250, valuing Zscaler at 18.5 times estimated fiscal 2031 enterprise value to free cash flow under its $8 billion ARR scenario.
The bank said there could be some customer or employee attrition in the first half of fiscal 2027, but new growth disclosures increased its confidence that Zscaler could outperform its fiscal 2027 ARR guidance.
Jefferies sees two to three percentage points of potential upside to the company’s fiscal 2027 ARR growth outlook.
Zscaler set a fiscal 2031 ARR target of more than $8 billion, implying a compound annual growth rate of about 17% from $3.8 billion in fiscal 2026.
Management also outlined an upside scenario of $10 billion in ARR, implying growth of about 22% annually, with artificial intelligence (AI) potentially contributing an additional $2 billion.
Jefferies said the $10 billion target would require a significant acceleration in growth and could prove difficult to achieve unless security operations and AI security businesses gain meaningful traction.
The bank said Zscaler’s Agentic SecOps business generated $235 million of fiscal 2026 ARR, up 21% organically excluding $141 million from the Red Canary acquisition.
The offering combines agentic security operations, deception, exposure management, threat hunting and managed detection and response, with management targeting a $57 billion total addressable market.
Jefferies remains cautious about near-term traction and expects CrowdStrike to be a strong competitor because of its established position in endpoint security and security operations.
Zscaler, Inc. (ZS) Analyst/Investor Day October 6, 2026 8:30 AM EDT
Company Participants
Kimberly Watkins - SVP of Investor Relations & Strategic Finance
Jagtar Chaudhry - Co-Founder, CEO & Chairman of the Board
Adam Geller - Chief Product Officer
Dhawal Sharma - Executive Vice President of AI Security & Strategic Initiatives
Ross Tackett - Chief Revenue Officer
Kevin Rubin - Chief Financial Officer
Conference Call Participants
Jon Eastern
Bob Stasio
Kurt De Ruwe
Michael Cikos - Needham & Company, LLC, Research Division
Saket Kalia - Barclays Bank PLC, Research Division
Keith Bachman - BMO Capital Markets Equity Research
Brian Essex - JPMorgan Chase & Co, Research Division
Brad Zelnick - Deutsche Bank AG, Research Division
Fatima Boolani - Citigroup Inc., Research Division
Joseph Gallo - Jefferies LLC, Research Division
Ittai Kidron - Oppenheimer & Co. Inc., Research Division
Adam Borg - Stifel, Nicolaus & Company, Incorporated, Research Division
John DiFucci - Guggenheim Securities, LLC, Research Division
Peter Levine - Evercore ISI Institutional Equities, Research Division
Roger Boyd - UBS Investment Bank, Research Division
Shrenik Kothari - Robert W. Baird & Co. Incorporated, Research Division
Gray Powell - BTIG, LLC, Research Division
Gregg Moskowitz - Mizuho Securities USA LLC, Research Division
Eric Heath - KeyBanc Capital Markets Inc., Research Division
Joshua Tilton - Wolfe Research, LLC
Junaid Siddiqui - Truist Securities, Inc., Research Division
Richard Poland - Wells Fargo Securities, LLC, Research Division
Conversation
Operator
Welcome to Zscaler Investor Day. Please welcome to the stage Zscaler SVP of Investor Relations and Strategic Finance, Kim Watkins.
Kimberly Watkins
SVP of Investor Relations & Strategic Finance
Thank you. Hello, everyone. It's my pleasure to welcome you to Zscaler's 2026 Investor Day. And whether you're here with us in New York or you're watching on the webcast, we really appreciate you taking the time to be with us today.
So it has been 5 years since we hosted an Investor Day. During that time, we've grown into a broad and
Zscaler oznámila spolupráci s IBM a Red Hat na ochraně privátních aplikací před útoky využívajícími nově zveřejněné zranitelnosti. Řešení má blokovat exploitaci v reálném čase a zároveň dodat ověřené opravy.
SAN JOSE, Calif., Oct. 05, 2026 (GLOBE NEWSWIRE) -- Zscaler, Inc. (NASDAQ: ZS), the cybersecurity platform for the AI era, today announced a collaboration with IBM and Red Hat to help organizations protect private applications during the period between vulnerability disclosure and patch deployment. The collaboration combines Zscaler Autonomous Application Shield, delivered through the Zscaler Zero Trust ExchangeTM security platform, with Lightwell from IBM and Red Hat to deliver adaptive, application-specific protection with validated software remediation in a single coordinated response.
The economics of exploitation have shifted. Capabilities that once required elite skills and weeks of manual effort are now widely available, and attackers are weaponizing newly disclosed vulnerabilities faster than enterprise patch cycles can respond. According to Mandiant's M-Trends 2026 report, the mean time to exploit a vulnerability has fallen below zero, meaning vulnerabilities are increasingly exploited before a public patch exists. Patching remains necessary, but on its own it can no longer keep pace. Organizations need protection that can be applied at machine speed while remediation is prepared and deployed.
This collaboration extends Zscaler's protection-first operating model for private applications, which assumes a remediation window will always exist and builds resilience around it: hide applications with Zscaler Private AccessTM (ZPATM) so they are harder to discover and target, segment access with Autonomous User-to-App Segmentation so a foothold does not become broad reachability, and shield reachable applications with Autonomous Application Shield so exploit attempts are stopped inline while the root cause is fixed. By uniting Zscaler Autonomous App Shield with Lightwell, the collaboration provides customers a coordinated path from immediate protection to durable fix.
Operating through the Zero Trust Exchange, Zscaler App Connectors continuously perform safe assessments of each private application's exposure points and vulnerabilities. The Zscaler cloud individually evaluates each application, ensuring only necessary protections are applied. When a new vulnerability emerges, adaptive protections can be applied inline and in real time, without waiting for a patch. Through this collaboration, Lightwell helps Zscaler defend its customers from potential cyber threats, with Zscaler blocking exploit attempts immediately at the network level. Lightwell then provides validated remediations for affected open source software, enabling customers to fix the underlying flaw at the source.
“As attackers weaponize newly disclosed vulnerabilities faster than enterprises can respond, organizations need a way to protect private applications immediately while fixes are being prepared and deployed,” said Joby Menon, Senior Vice President of Product Management at Zscaler. “Our collaboration with IBM and Red Hat brings together inline, application-specific protection and validated remediation to help customers reduce risk during that gap.”
Through this collaboration, Zscaler, IBM, and Red Hat will deliver integrated capabilities across the application security lifecycle, addressing critical needs including:
Exposure Discovery: Providing a current understanding of a private application's actual risk profile, updated as fast as applications change, rather than relying on periodic scans.Preemptive, Application-Specific Protection: Bridging the gap between vulnerability and patching. Applying only the protections a given application needs during the gap between disclosure and patching, reducing exposure while remediation is underway and avoiding one-size-fits-all policy noise.Machine-Speed Response: Deploying protections inline and in real time when a new vulnerability emerges, informed by global threat intelligence from across Zscaler's worldwide customer base.Validated Source-Level Remediation: Delivering tested software fixes through Lightwell so organizations can resolve the underlying vulnerability, with advisory and deployment support to prioritize and validate protections across complex environments. "AI is shrinking the window between vulnerability discovery and vulnerability exploitation. A window that was months or weeks is now hours and minutes,” said Gunnar Hellekson, vice president and general manager, Lightwell, Red Hat. “Lightwell helps keep open source safe by patching and fixing these vulnerabilities at machine speed. Collaborating with partners like Zscaler brings Lightwell’s capabilities to the forefront of enterprise networks, mitigating potential vulnerabilities head-on while patches are applied to critical systems."
Autonomous Application Shield is currently available through an Early Access Program. Availability, capabilities, and timing of the collaboration described herein are subject to change.
For a deeper dive into how Zscaler is helping protect against AI threats, please visit this blog.
Forward-Looking Statements
This press release contains forward-looking statements that are based on our management's beliefs and assumptions and on information currently available to our management. These forward-looking statements include the expected performance and benefits of Zscaler Autonomous Application Shield and its collaboration with IBM and Red Hat, including the delivery of adaptive, machine-speed protection for private applications. These forward-looking statements are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995. A significant number of factors could cause actual results to differ materially from statements made in this press release, including those factors related to Zscaler's ability to achieve partner and customer adoption of Autonomous Application Shield and the collaboration described herein. Additional risks and uncertainties are set forth in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on September 3, 2026, which is available on our website at ir.zscaler.com and on the SEC's website at www.sec.gov. Any forward-looking statements in this release are based on the limited information currently available to Zscaler as of the date hereof, which is subject to change, and Zscaler will not necessarily update the information, even if new information becomes available in the future.
About Zscaler
Zscaler (NASDAQ: ZS) accelerates digital transformation so customers can be more agile, efficient, resilient, and secure. The Zscaler Zero Trust ExchangeTM platform protects thousands of customers from cyberattacks and data loss by securely connecting users, devices, and applications in any location. Distributed across 200+ public data centers globally and thousands of private sites at the edge, the SASE-based Zero Trust Exchange is the world’s largest in-line cloud security platform.
Zscaler (ZS - Free Report) closed the most recent trading day at $196.60, moving -1.1% from the previous trading session. The stock trailed the S&P 500, which registered a daily gain of 0.73%. Elsewhere, the Dow gained 0.49%, while the tech-heavy Nasdaq added 1.19%.
The stock of cloud-based information security provider has risen by 11.8% in the past month, leading the Computer and Technology sector's gain of 6.36% and the S&P 500's gain of 0.55%.
The investment community will be closely monitoring the performance of Zscaler in its forthcoming earnings report. The company's earnings per share (EPS) are projected to be $1.16, reflecting a 20.83% increase from the same quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $937.61 million, up 18.97% from the prior-year quarter.
For the full year, the Zacks Consensus Estimates project earnings of $4.91 per share and a revenue of $3.93 billion, demonstrating changes of +16.63% and +17.22%, respectively, from the preceding year.
Investors should also note any recent changes to analyst estimates for Zscaler. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 451.17% higher. Zscaler presently features a Zacks Rank of #3 (Hold).
With respect to valuation, Zscaler is currently being traded at a Forward P/E ratio of 40.48. This denotes a discount relative to the industry average Forward P/E of 54.15.
We can additionally observe that ZS currently boasts a PEG ratio of 2.96. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. Security stocks are, on average, holding a PEG ratio of 3.03 based on yesterday's closing prices.
The Security industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 68, putting it in the top 28% of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
Zscaler (NASDAQ:ZS – Get Free Report)‘s stock had its “outperform” rating reissued by Wedbush in a research report issued on Monday, Benzinga reports. They currently have a $215.00 price target on the stock. Wedbush’s target price would indicate a potential upside of 11.37% from the company’s current price.
A number of other brokerages also recently weighed in on ZS. KeyCorp increased their price target on shares of Zscaler from $185.00 to $210.00 and gave the company an “overweight” rating in a report on Friday, August 21st. Guggenheim reaffirmed a “buy” rating on shares of Zscaler in a research report on Friday. Stifel Nicolaus lifted their target price on Zscaler from $175.00 to $200.00 and gave the stock a “buy” rating in a research report on Wednesday, August 19th. Zacks Research cut Zscaler from a “hold” rating to a “strong sell” rating in a report on Thursday, September 3rd. Finally, Sanford C. Bernstein lifted their price objective on Zscaler from $224.00 to $298.00 and gave the stock an “outperform” rating in a report on Thursday, September 17th. Thirty-four analysts have rated the stock with a Buy rating, six have given a Hold rating and two have issued a Sell rating to the company’s stock. Based on data from MarketBeat, the company presently has a consensus rating of “Moderate Buy” and an average target price of $219.28.
View Our Latest Stock Report on Zscaler
Zscaler Price Performance Shares of Zscaler stock opened at $193.05 on Monday. Zscaler has a 12-month low of $114.63 and a 12-month high of $336.99. The company has a quick ratio of 1.70, a current ratio of 1.70 and a debt-to-equity ratio of 0.65. The stock has a 50 day moving average price of $174.24 and a two-hundred day moving average price of $153.53. The stock has a market capitalization of $31.48 billion, a P/E ratio of -495.00, a PEG ratio of 20.12 and a beta of 0.95. Zscaler (NASDAQ:ZS – Get Free Report) last issued its quarterly earnings results on Thursday, September 3rd. The company reported $1.19 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.09 by $0.10. The company had revenue of $898.19 million for the quarter, compared to the consensus estimate of $876.96 million. Zscaler had a positive return on equity of 1.23% and a negative net margin of 1.88%.The firm’s revenue was up 24.9% compared to the same quarter last year. During the same period last year, the business posted $0.89 earnings per share. Zscaler has set its FY 2027 guidance at 4.860-4.900 EPS and its Q1 2027 guidance at 1.150-1.160 EPS. Equities analysts expect that Zscaler will post 0.7 earnings per share for the current year.
Insiders Place Their Bets In other Zscaler news, insider Adam Geller sold 5,578 shares of the company’s stock in a transaction on Wednesday, September 16th. The stock was sold at an average price of $192.76, for a total value of $1,075,215.28. Following the sale, the insider directly owned 43,553 shares in the company, valued at $8,395,276.28. This represents a 11.35% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CFO Kevin Rubin sold 5,957 shares of the stock in a transaction on Wednesday, September 16th. The stock was sold at an average price of $192.76, for a total value of $1,148,271.32. Following the transaction, the chief financial officer owned 43,287 shares of the company’s stock, valued at $8,344,002.12. This represents a 12.10% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders sold a total of 28,656 shares of company stock worth $5,526,076 in the last 90 days. 17.20% of the stock is owned by corporate insiders.
Institutional Investors Weigh In On Zscaler Large investors have recently made changes to their positions in the company. WINTON GROUP Ltd lifted its holdings in Zscaler by 56.5% during the 2nd quarter. WINTON GROUP Ltd now owns 4,890 shares of the company’s stock valued at $690,000 after purchasing an additional 1,765 shares during the last quarter. NewEdge Advisors LLC increased its holdings in shares of Zscaler by 7.8% during the second quarter. NewEdge Advisors LLC now owns 4,626 shares of the company’s stock worth $653,000 after buying an additional 336 shares in the last quarter. Hudock Inc. bought a new position in shares of Zscaler in the second quarter valued at approximately $311,000. Allworth Financial LP boosted its holdings in shares of Zscaler by 7.7% in the 2nd quarter. Allworth Financial LP now owns 3,578 shares of the company’s stock worth $505,000 after acquiring an additional 256 shares in the last quarter. Finally, Arizona State Retirement System grew its position in Zscaler by 6.4% during the 2nd quarter. Arizona State Retirement System now owns 29,965 shares of the company’s stock worth $4,230,000 after acquiring an additional 1,799 shares during the last quarter. Institutional investors own 46.45% of the company’s stock.
About Zscaler (Get Free Report)
Zscaler, Inc is a cloud-native cybersecurity company that provides security services designed to help organizations connect users, devices, applications and workloads securely over the internet. Its platform is built around a zero-trust security model, which verifies access based on identity, context and policy rather than relying primarily on a traditional corporate network perimeter.
The company’s offerings include Zscaler Internet Access, which secures access to internet and software-as-a-service applications, and Zscaler Private Access, which provides secure, policy-based access to private applications without requiring conventional virtual private networks.
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SAN JOSE, Calif., Sept. 24, 2026 (GLOBE NEWSWIRE) -- Zscaler, Inc. (NASDAQ: ZS), the cybersecurity platform for the AI era, today announced the appointment of Ross Tackett as the company’s Chief Revenue Officer, effective October 1, 2026. In this role, Tackett will lead Zscaler’s global revenue operations, sales organization, strategic partner ecosystem, and go-to-market execution.
Tackett, who most recently served as Zscaler’s Head of Worldwide Sales, has been with the company for three years and brings more than three decades of technology sales leadership experience and a proven track record of scaling multi-billion-dollar enterprise go-to-market organizations, accelerating international expansion, and building high-performing revenue teams. He previously spent more than a decade in sales leadership roles at ServiceNow, and more than 16 years in sales leadership roles at Dell. Tackett succeeds Mike Rich who is stepping down as CRO for personal reasons. Rich will remain with Zscaler as a strategic advisor through December 31, 2026.
“Ross Tackett brings an exceptional combination of operational discipline, global scale, and customer-first leadership to this important role,” said Jay Chaudhry, CEO, Chairman, and Founder of Zscaler. “Having worked closely with Ross as Head of Worldwide Sales, I have seen firsthand his ability to inspire teams, execute at scale, and drive commercial expansion. His deep domain expertise and international experience throughout his career makes him the ideal leader to guide our global sales organization as enterprises urgently modernize their infrastructure with the Zero Trust Exchange and defend against AI-driven threats. I also want to express my gratitude to Mike Rich for his contributions and leadership, and for staying on to ensure a seamless transition.”
“Zscaler pioneered Zero Trust security and continues to set the benchmark for innovation in the AI era,” said Tackett. “Enterprises worldwide are retiring complex, vulnerable legacy firewall and VPN-based security in favor of Zero Trust architecture, and Zscaler is uniquely positioned as the platform of choice. I look forward to continuing to work closely with Jay, our executive leadership, and our world-class sales organization to scale our global commercial engine and deliver tangible, transformative business outcomes for our customers.”
“Leading Zscaler’s sales organization has been an incredible privilege and I am proud of the milestones our global team has achieved together,” said Rich. “Having partnered side-by-side with Ross, I know our go-to-market team is in outstanding hands. His promotion reflects the strength of our leadership bench, and I look forward to actively supporting him and the company through the end of the year to ensure sustained momentum.”
About Zscaler
Zscaler (NASDAQ: ZS) accelerates digital transformation so customers can be more agile, efficient, resilient, and secure. The Zscaler Zero Trust Exchange™ platform protects thousands of customers from cyberattacks and data loss by securely connecting users, devices, and applications in any location. Distributed across 200+ public data centers globally and thousands of private sites at the edge, the SASE-based Zero Trust Exchange is the world’s largest in-line cloud security platform.
Forward-Looking Statements
This press release contains forward-looking statements that are based on our management's beliefs and assumptions and on information currently available to our management. These forward-looking statements include, but not limited to, statements regarding our leadership transition, plans, beliefs, and expectations, operational continuity, market opportunities, and strategic growth trajectories. These forward-looking statements are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995.
There are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including but not limited to, our ability to successfully manage the transition, our ability to maintain key relationships with existing customers and prospects, our ability to retain our existing and hire new go-to-market personnel, and our ability to continue to capitalize on our account centric sales motion. Additional risks and uncertainties are included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth from time to time in our filings and reports with the Securities and Exchange Commission ("SEC"), including our Annual Report on Form 10-K for the fiscal year ended July 31, 2026, filed on September 3, 2026, as well as future filings and reports by us, copies of which are available on our website at ir.zscaler.com and on the SEC’s website at www.sec.gov. Any forward-looking statements in this release are based on the limited information currently available to Zscaler as of the date hereof, which is subject to change, and Zscaler will not necessarily update the information, even if new information becomes available in the future.
SAN JOSE, Calif., Sept. 23, 2026 (GLOBE NEWSWIRE) -- Zscaler, Inc. (NASDAQ: ZS), the cybersecurity platform for the AI era, today announced that it will host its Investor Day in New York City on Tuesday, October 6, 2026, at 8:30 a.m. Eastern Time. The half-day event will feature presentations from members of Zscaler’s leadership team on the company’s vision, strategy, long-term growth drivers, and financial outlook.
Registration for the live webcast can be found at https://ir.zscaler.com/events/event-details/zscaler-investor-day-2026. A replay will be available on Zscaler’s Investor Relations website after the event concludes.
About Zscaler
Zscaler (NASDAQ: ZS) accelerates digital transformation so customers can be more agile, efficient, resilient, and secure. The Zscaler Zero Trust Exchange™️ platform protects thousands of customers from cyberattacks and data loss by securely connecting users, devices, and applications in any location. Distributed across 200+ public data centers globally and thousands of private sites at the edge, the SASE-based Zero Trust Exchange is the world’s largest in-line cloud security platform.
Key Takeaways Cisco's security revenues rose 14% as AI infrastructure orders and networking demand strengthened.Zscaler's revenues grew 24.9%, but fiscal 2027 revenue and ARR growth are projected near 17%.Cisco trades at 5.80X forward P/S versus Zscaler's 8.53X, alongside stronger absolute cash generation. Zscaler, Inc. (ZS - Free Report) and Cisco Systems, Inc. (CSCO - Free Report) are well-known companies in the fast-growing enterprise cybersecurity market, but their business models are very different. Zscaler is a cloud-native security specialist built around zero-trust access, SASE and AI security, while Cisco combines cybersecurity with networking, observability and infrastructure.
Both companies are seeing stronger demand as enterprises secure cloud workloads and AI systems. However, investors must be wondering which stock offers the better combination of growth, financial strength, valuation and risk.
Let’s delve deeper to determine which stock offers a better investment option right now.
Zscaler: Strong Business, But Growth Is Losing MomentumZscaler continues to post solid financial results. In the fourth quarter of fiscal 2026, revenues increased 24.9% year over year to $898.2 million, while non-GAAP earnings per share (EPS) jumped 33.7% to $1.19. Annual recurring revenue (ARR) also rose 25% to $3.77 billion, and RPO increased roughly 27% to $7.4 billion. Net new ARR growth (excluding contribution from the Red Canary acquisition) accelerated to 17% in the fourth quarter compared with 7% in fiscal 2025. This suggests customers are not simply renewing existing subscriptions but are expanding their use of Zscaler's platform.
The company’s Zero Trust platform remains its biggest strength. More than 950 enterprises had adopted its Zero Trust Everywhere offering by the end of the fourth quarter, up from more than 700 in the previous quarter and 350 in the year-ago quarter. With about 11,000 enterprise customers globally, Zscaler still has plenty of room to expand.
The company is also widening its opportunity beyond traditional user-based security. In the fourth quarter, Zscaler’s non-seat-based offerings generated about 30% of new and upsell annual contract value, with ARR tied to these offerings growing more than 100%. Its Z-Flex program also produced more than $770 million of fourth-quarter contract value, while larger customers continued expanding their deployments.
AI is another important opportunity. Zscaler is extending its Zero Trust technology to protect AI applications and agents, while the Symmetry Systems acquisition could improve visibility into identity and access across AI environments. The company’s Security for AI bookings rose more than 50% sequentially in the fourth quarter, and its Zero Trust Exchange is being positioned to secure users, workloads, branches, AI applications and agents. It is processing more than 750 billion transactions per day through its security cloud, which supports its ability to collect security telemetry at scale.
Zscaler's biggest problem is its slowing growth. The company once routinely delivered revenue growth above 40%. This has now fallen to the mid-20% range, and management is projecting roughly 17% growth in both revenues and ARR.
At the same time, Zscaler is preparing for higher infrastructure spending. AI workloads require more computing, storage, networking and memory capacity, pushing capital expenditures higher. Capital expenditures accounted for 8.3% of fiscal 2026 revenues, up from 6.1% in fiscal 2025. Management expects capital spending to remain elevated in fiscal 2027 and potentially reach the low-teens percentage of revenues.
Higher investment can be justified when it leads to faster growth. The problem for Zscaler is that spending is rising, while revenue and ARR growth are expected to slow.
Free cash flow also reflects this pressure. Zscaler's free cash flow margin declined to 23% in fiscal 2026 from 27% in fiscal 2025. Management expects the margin to remain around 23%-23.5% in fiscal 2027.
Cisco: Diversification Strengthens Its Cybersecurity CaseCisco has a much larger revenue base and a more diversified business model. In the fourth quarter of fiscal 2026, the company’s revenues rose 18% to $17.25 billion, and non-GAAP EPS increased 23% to $1.22. CSCO also generated operating cash flow of $5.39 billion in the fourth quarter and $14.2 billion in the full fiscal year 2026, providing considerable support for investments and shareholder returns.
The strongest growth driver is increasingly tied to AI infrastructure and networking. Cisco received $9.3 billion of hyperscaler AI infrastructure orders in fiscal 2026, about 4.5 times fiscal 2025's level. It recognized roughly $4 billion of AI infrastructure revenues in fiscal 2026 and expects that figure to rise to $7.5 billion in fiscal 2027. The AI opportunity is expanding beyond hyperscalers. CSCO recorded $1.3 billion of fiscal 2026 AI orders from neocloud, sovereign-cloud and enterprise customers.
The company's networking strength is becoming increasingly relevant to cybersecurity. Cisco reported 40% year-over-year growth in networking product orders in the fourth quarter, marking the eighth straight quarter of double-digit growth. This matters because CSCO can connect networking, security and observability products instead of competing purely as a cybersecurity vendor.
Cisco’s cybersecurity business is also gaining traction. Security revenues increased 14% year over year in the fourth quarter, while the broader security portfolio posted double-digit order growth. More than 1,500 customers purchased newer offerings such as Secure Access, XDR, Hypershield and AI Defense in the fourth quarter, taking net new customers for these products above 6,400 since launch. Firewall orders increased by more than 30%. The company is using its broader portfolio, including Splunk, to build a more integrated security offering.
A massive enterprise network-refresh cycle provides another durable growth driver. Cisco estimates more than $100 billion of networking refresh opportunities over the coming years. Campus networking orders rose more than 15% in fiscal 2026, yet only about 7% of Cisco’s campus switching installed base had been refreshed by fiscal year-end, suggesting substantial runway. The refresh cycle is being accelerated by AI workloads, Wi-Fi 7 adoption, higher bandwidth requirements and cybersecurity needs. Campus networking orders increased 20% in the fourth quarter, while wireless bookings advanced more than 25%. Wi-Fi 7 represented more than half of wireless bookings, creating additional demand for multi-gigabit campus switches.
Cisco is not without challenges. The major concern is margin pressure. The company’s fourth-quarter fiscal 2026 non-GAAP gross margin declined 210 basis points (bps) year over year to 66.3%, while product gross margin fell 270 bps to 64.8%. Cisco attributed the decline primarily to a greater mix of hardware revenues and higher memory costs, partly offset by productivity gains and pricing actions. Cisco guided first-quarter fiscal 2027 non-GAAP gross margin to 65-66%, indicating continued pressure.
Another challenge Cisco is grappling with is the sluggish recurring and services growth. Services revenues were flat year over year at $3.79 billion in the fourth quarter of fiscal 2026. ARR increased only 3% to $32.1 billion despite total revenues jumping 18%. Observability revenues rose just 6%. These trends contrast with the much stronger growth currently being generated by networking hardware.
Valuation Face-Off: Cisco Trades at a Low MultipleThe valuation gap favors Cisco from a multiple perspective. Zscaler trades at a forward 12-month price-to-sales (P/S) multiple of 8.53 compared with 5.80 for Cisco. This premium reflects Zscaler's faster growth and more focused exposure to cloud cybersecurity and zero-trust adoption. However, investors are paying more for that growth even as Zscaler's fiscal 2027 revenue growth is projected to moderate to roughly 17%.
CSCO vs. ZS: Forward 12-Month Price-To-Sales Ratio
Image Source: Zacks Investment Research
Cisco's lower P/S multiple comes alongside much larger revenues, stronger absolute cash generation and a broader mix of networking, security and AI infrastructure businesses. The market is already reflecting different expectations for the two stocks. Cisco shares have soared 38.2% year to date, while Zscaler has declined 6.5%.
CSCO vs. ZS: YTD Price Return Performance
Image Source: Zacks Investment Research
Conclusion: Buy Cisco Stock for NowZscaler remains an attractive long-term cybersecurity company. Its zero-trust platform is gaining adoption, its AI security opportunity is expanding, and its efforts to increase sales of non-seat-based products could support future growth. However, the investment case is becoming more demanding as revenue and ARR growth slow and infrastructure spending increases.
Cisco offers a more balanced setup. Its cybersecurity business is growing, its networking franchise is benefiting from AI-driven demand, and its hyperscaler AI infrastructure orders have risen sharply. At the same time, the company generates substantial cash and trades at a lower P/S multiple than Zscaler.
For investors deciding between the two stocks today, buy Cisco stock for now. The combination of valuation support, strong cash generation, cybersecurity growth and a rapidly expanding AI infrastructure opportunity gives Cisco a more balanced risk-reward profile at this stage.
Cisco carries a Zacks Rank #2 (Buy), making it a clear winner over Zscaler, which has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zscaler oznámil, že bookings v oblasti Security for AI ve 4. fiskálním čtvrtletí roku 2026 vzrostly sekvenčně o více než 50 %. AI Protect zároveň překonal hranici 100 milionů USD za posledních 12 měsíců.
Key Takeaways Zscaler's Security for AI bookings rose more than 50% sequentially in fiscal Q4 2026.AI Protect bookings topped $100 million over 12 months, while 70% of AI deals included Data Security.Zscaler's fiscal 2027 revenue guidance implies about 17% growth, down from 25% in fiscal 2026. Zscaler, Inc. (ZS - Free Report) is gaining traction in the fast-growing market for securing artificial intelligence (AI), with AI-related bookings becoming a new growth driver. The company’s Security for AI bookings increased more than 50% sequentially in the fourth quarter of fiscal 2026. This momentum shows that customers are looking for tools to control AI-related risks.
Zscaler’s Security for AI platform helps enterprises discover AI applications, control access, protect data and manage risks as employees and AI agents use these technologies. In the fourth quarter, the company also introduced Zero Trust Exchange for Agents and Endpoint AI Security, which are expected to scale in the second half of fiscal 2027. Agentic SecOps is another planned offering aimed at addressing security risks from AI-driven operations.
Customer demand is also expanding across Zscaler’s AI portfolio. AI Protect bookings crossed $100 million over the trailing 12 months. In the fourth quarter, about 70% of Security for AI deals also included Data Security, pointing to opportunities for cross-selling.
The opportunity is meaningful, but scaling quickly will require strong execution. Zscaler generated $898.2 million in fourth-quarter revenues, up 25% year over year. Annual recurring revenues (ARR) rose 25% to $3.77 billion. However, fiscal 2027 revenue guidance implies growth of about 17%, significantly lower than 25% registered in fiscal 2026. If Zscaler converts rising AI interest into larger, repeatable contracts, AI could help broaden its growth engine and support platform adoption.
Zscaler’s Competitors Are Also Expanding AI Security PushZscaler’s rivals such as Palo Alto Networks, Inc. (PANW - Free Report) and CrowdStrike Holdings, Inc. (CRWD - Free Report) are also enhancing their capabilities in the AI security space.
Palo Alto Networks is targeting AI deployments through its security platforms, giving enterprises tools to protect AI workloads and manage emerging risks. The company’s Prisma AIRS has expanded from securing AI models and applications into a broader architecture for agentic security. In the fourth quarter of fiscal 2026, AIRS reached about $120 million in ARR within roughly one year of general availability and exceeded 800 customers, more than doubling sequentially.
Overall, Palo Alto Networks’ fourth-quarter revenues rose 34% year over year to $3.41 billion, while Next-Generation Security ARR jumped 63% to $9.1 billion. For fiscal 2027, it expects revenues of $14.1-$14.2 billion, up 23%-24%, showing continued momentum.
CrowdStrike is another competitor building AI security capabilities across its platform. The company is extending Falcon into AI security as agentic applications create new identity, data and endpoint risks. In the second quarter of fiscal 2027, AIDR (AI Detection and Response) ending ARR nearly tripled from the first quarter. During its last quarterly results, the company also stated that endpoint usage of Claude rose more than 400% and custom agent usage increased more than 100% in a customer sample.
Its fourth-quarter revenues surged 25.8% year over year to $1.47 billion, while total ARR grew 25% to $5.84 billion. CrowdStrike has introduced Continuous Identity for AI Agents and expanded AIDR integrations across major AI gateways. Management expects AI to drive a broader security modernization cycle, giving Falcon additional opportunities across endpoint, identity, cloud and SIEM as enterprises govern AI adoption broadly across expanding deployments.
Zscaler’s Price Performance, Valuation & EstimatesZS shares have plunged 12.3% year to date, while the Zacks Security industry has surged 88.1%.
Zscaler YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, ZS trades at a forward price-to-sales ratio of 8.01, significantly below the industry’s average of 18.61.
Zscaler Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Zscaler’s fiscal 2027 and 2028 earnings implies a year-over-year increase of 15% and 13%, respectively. Estimates for fiscal 2027 and 2028 have been revised upward over the past 30 days.
Image Source: Zacks Investment Research
Zscaler currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Kyberbezpečnostní akcie prudce rostou po varováních o bezpečnosti AI; CrowdStrike, Zscaler a Palo Alto přidávají v pondělním obchodování 12 %, 12 % a 11 %.
AI safety warnings from two frontier lab CEOs sent shockwaves through chipmakers over the weekend, but cybersecurity stocks are telling a completely different story about what those warnings mean for the threat environment ahead.
CrowdStrike (NASDAQ:CRWD | CRWD Price Prediction) stock is up 12% to $232.08, Zscaler (NASDAQ:ZS) stock is rising 12% to $183.97, and Palo Alto Networks (NASDAQ:PANW) stock is jumping 11% to $366.40 in midday Monday trading. The pure-play security names are catching a sector bid on fresh artificial intelligence (AI) safety warnings from two frontier lab CEOs over the weekend, on the reasoning that a more dangerous threat environment expands security spending. CrowdStrike is the clearest expression of the theme, given how directly its products are sold against AI-driven cyber threats.
Okta (NASDAQ:OKTA) stock is joining the move as the identity-security peer to the group, with management having positioned agent identity as a durable AI-security opportunity on its most recent call. The First Trust NASDAQ Cybersecurity ETF (NASDAQ:CIBR) is up 4%, while the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is down 0.7%. The individual pure-plays are running well ahead of the sector fund, which concentrates the bid in this narrow group and leaves CIBR’s wider networking and infrastructure membership largely out of the move.
AI Safety Warnings Spark the Security Bid Anthropic CEO Dario Amodei published a 3,800-word essay on Saturday, according to Yahoo Finance, calling on frontier AI companies to slow the pace at which they improve model capabilities so risk prevention can keep up. Amodei wrote, “We must slow the pace at which we improve the capabilities of A.I. models. Progress will still seem fast, and we must make wise use of the time we gain.” OpenAI CEO Sam Altman said he agreed, and followed with a post early Monday warning about losing control of the future to AI and about too much concentration of power.
Those warnings are cutting into chipmakers and AI infrastructure shares, and cybersecurity is catching the offsetting flow on the same words. CrowdStrike carries a company-specific catalyst on top: CEO George Kurtz responded to Amodei’s essay over the weekend, arguing that frontier AI laboratories will keep advancing their technology regardless of any single company’s decision and that the cybersecurity industry’s job is to make that development safer. The Kurtz remarks followed CrowdStrike’s Fal.Con conference, where the company introduced Falcon Guardian, SafeMind and an Agentic Identity Provider, and analysts at RBC Capital, Raymond James and Wedbush each reiterated positive ratings and raised their price targets on CrowdStrike after the event.
Money Moving Into the Security Theme The year-to-date figures show the bid running across all three names alike. CrowdStrike stock is up 98% year to date and Palo Alto stock is up 99% year to date, while Zscaler stock is down 18% year to date. All three are rising by similar amounts today, which points to money flowing into the security category as a block rather than to any judgment about which of these businesses benefits most from an AI-driven threat environment.
CrowdStrike is the clearest expression of the trade the AI pacing debate has created, since the same warnings pressuring chipmakers describe exactly the threat environment its products are sold against. The bull case for CrowdStrike is that faster, AI-driven attacks expand security budgets regardless of how quickly frontier models advance, and its CEO’s weekend argument that the labs will keep building either way reinforces that view. A bear case for CrowdStrike is that a stock which has already nearly doubled this year is being repriced on weekend commentary rather than on any change in bookings, and Zscaler rising just as much while sitting on a full-year loss is the detail that makes this look like a sentiment move.
What to Watch Next The next scheduled catalyst for CrowdStrike is its Q3 FY27 report, with the company guiding to revenue of $1.523 billion to $1.529 billion and non-GAAP diluted EPS of $0.31. That report can show whether the AI safety narrative is translating into net new ARR alongside the record $332.8 million CrowdStrike posted in Q2 FY27, when total revenue grew 25.8% year over year to $1.47 billion. Full-year FY27 revenue guidance stands at $5.991 billion to $6.011 billion, and management raised its net new ARR growth outlook by 630 basis points with the Q2 update.
Investors can look for signs that the security bid holds beyond a single weekend of AI commentary from the frontier lab CEOs. Sentiment moves of this size can unwind as fast as they arrive, and sizing your CrowdStrike exposure to match the stock’s volatility remains the practical response for anyone chasing this bid after a run of nearly 100% on the year.
Contact [email protected] for any questions or corrections.
Zscaler vstupuje do fiskálního roku 2027 s širším portfoliem a rostoucí poptávkou po AI bezpečnosti a zero-trust architektuře. Bookings v oblasti AI bezpečnosti za 12 měsíců přesáhly 100 milionů USD.
Palo Alto vs. Zscaler: Which Cybersecurity Stock Looks Stronger After Earnings?Zscaler NASDAQ: ZS CEO and Founder Jay Chaudhry said the company entered fiscal 2027 with an expanded product portfolio, improving sales momentum and growing customer interest in AI security and zero-trust architecture.
Speaking at Citi’s TMT Conference with Fatima Boolani, Chaudhry said Zscaler’s platform now spans zero trust for users, branches, devices, workloads and agents. He said the company also expanded its AI-security lineup from one product a year ago, GenAI Security, to six integrated products.
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Zscaler’s Strong Quarter Still Left Investors Waiting on 1 Key Signal“We have better portfolio platform than anyone out there,” Chaudhry said, adding that the pace of product development by Zscaler’s internal AI-security startup exceeded his expectations.
Sales transformation and customer metrics Chaudhry said the company’s sales transformation, initiated roughly 2.5 years ago after Mike Rich joined the organization, has shifted the go-to-market process toward enterprise-account focus. He pointed to improvement in net-new annual recurring revenue growth as evidence of progress.
Net-new ARR growth was limited in fiscal 2024, according to Chaudhry. Growth reached 7% in fiscal 2025. It rose to 10% in the first half of fiscal 2026 and 17% in the fourth quarter. Contrarian Alert: 5 Downgraded Stocks That May Reward Long-Term InvestorsChaudhry also cited a net promoter score in the 80-to-85 range and said customer satisfaction has supported upselling. Zscaler had about 785 customers with more than $1 million in ARR, he said, while the number of customers using its Zero Trust Everywhere offerings increased from 300 a year earlier to 950.
The company completed a record number of $1 million deals in the fourth quarter, created record pipeline during the period and reported its highest sales productivity in about four years, Chaudhry said.
AI security demand is building, but deal sizes remain small Chaudhry said concerns around “frontier models” have altered conversations with chief information security officers, chief information officers and corporate boards. He said large enterprises have formed cyber task forces following what he called “Mythos,” with the goal of assessing risks and reporting to boards more frequently.
According to Chaudhry, AI models can discover internet-exposed assets and potential vulnerabilities at a much greater rate than prior tools. He said Zscaler is working with customers to reduce their exposed attack surfaces by placing applications behind zero-trust controls.
He also said organizations are seeking ways to deploy AI agents safely, including controlling which agents can communicate with other agents. Zscaler’s approach is based on extending its zero-trust architecture from user-to-application connections to branches, devices, cloud workloads and agents.
Security-for-AI bookings exceeded $100 million over the 12 months disclosed after the third quarter, Chaudhry said. In the fourth quarter, bookings in the category rose 50% sequentially. Still, he said many customers are initially making smaller purchases as they evaluate products before committing to multimillion-dollar deployments.
Chaudhry added that 70% of AI-security deals closed in the fourth quarter also included data-security products. He said AI-related concerns are also accelerating some zero-trust deployments, as customers seek to reduce the potential “blast radius” from a breach.
Agentic SecOps and Red Canary integration Zscaler launched Agentic SecOps at the conference, a product initiative supported by the company’s Red Canary acquisition. Chaudhry said Red Canary contributed managed-security operations expertise, playbooks and agents that Zscaler incorporated into its new SecOps offering.
He said the acquisition was intended to accelerate development of an agentic SecOps solution rather than make Zscaler solely a managed detection and response provider. Customers will be able to purchase the product and may also choose managed services, he said.
Red Canary has been a revenue headwind rather than a tailwind so far because standalone MDR businesses have traditionally experienced higher churn, particularly among smaller customers, Chaudhry said. Zscaler plans to move Red Canary customers from the existing offering to its new solution and has factored uncertainty around that transition into expectations.
Chaudhry said Zscaler believes its advantage in agentic SecOps is its ability to use first-party inline and endpoint telemetry, identify threats quickly and enforce policy without first moving data to a separate data lake.
Flexible purchasing and fiscal 2027 priorities Zscaler also introduced Z Flex, a flexible purchasing structure intended to reduce procurement friction. Chaudhry said the arrangement allows customers to swap modules, purchase additional products through a rate card and use rollout ramps for broader deployments. Customers using Z Flex generated upsell that was 30% higher than customers not using the program during its first year, he said.
Looking toward fiscal 2027, Chaudhry identified AI security and Zero Trust Everywhere as the areas most likely to provide upside. He also said he is watching adoption of the company’s Agentic Exchange, which is currently in limited availability with customers. The exchange is designed to manage policy enforcement and communications among agents from multiple platforms and providers.
About Zscaler (NASDAQ:ZS)Zscaler, Inc is a cloud-native cybersecurity company that provides security services designed to help organizations connect users, devices, applications and workloads securely over the internet. Its platform is built around a zero-trust security model, which verifies access based on identity, context and policy rather than relying primarily on a traditional corporate network perimeter.
The company's offerings include Zscaler Internet Access, which secures access to internet and software-as-a-service applications, and Zscaler Private Access, which provides secure, policy-based access to private applications without requiring conventional virtual private networks.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].
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Zscaler rozšiřuje zero-trust ochranu pro AI agenty a spouští Agentic SOC, který má zpracovávat 750 miliard signálů denně. Firma zároveň uvedla, že její AI nabídky jsou stále převážně v rané fázi.
Palo Alto vs. Zscaler: Which Cybersecurity Stock Looks Stronger After Earnings?Zscaler NASDAQ: ZS executives outlined how the cybersecurity company is adapting its zero-trust architecture for AI agents, while also discussing new product launches, sales initiatives and the potential for continued growth in its core business.
Speaking at a company session, Head of Product Adam Geller said Zscaler’s proxy-based architecture remains central to its security approach because it provides an inspection point for traffic moving between users, applications, data sources and, increasingly, AI agents.
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Zscaler’s Strong Quarter Still Left Investors Waiting on 1 Key Signal“The whole point of doing cybersecurity is you’re looking for either threats coming in or you’re trying to understand where data is moving and should it be moving or not,” Geller said. While simply connecting systems can move data from point A to point B, a proxy can observe activity and enforce policy, he said.
AI Traffic Requires Different Security Inspection Geller said securing AI interactions differs from traditional web security because AI systems may involve extended, multi-turn conversations rather than single transactions that need a near-instantaneous approval or denial decision.
Contrarian Alert: 5 Downgraded Stocks That May Reward Long-Term InvestorsFor example, a request mentioning a “cookie” could concern a recipe, but additional exchanges could reveal it relates to an authentication session cookie containing sensitive information. As a result, security platforms need to understand a broader context window and inspect multiple turns of an interaction, he said.
AI security also introduces risks beyond traditional malware, vulnerabilities and data leakage. Organizations may need to determine whether someone is attempting to poison an AI model or cause it to perform an unintended action, Geller said. “When you’re proxying AI communications, you need different kinds of inspection engines for that traffic.”
Chief Financial Officer Kevin Rubin said customer conversations have intensified as organizations assess vulnerabilities and exposures they may not have previously identified. He said patching alone may not address risks associated with old equipment or operating systems that are difficult to update.
Rubin said Zscaler’s answer is to help customers hide applications, reduce their attack surface and limit an attacker’s ability to move laterally after a potential breach.
Agentic SOC Launch Draws on Security Signals Geller highlighted Zscaler’s Agentic SOC launch, which uses an agent framework to help customers detect, investigate and respond to security incidents. The system is designed to process the 750 billion signals Zscaler sees daily, according to Geller.
He said the product was built around “agent-first interaction” rather than a traditional security operations center model that collects data into a data lake, normalizes it and produces alerts for human analysts. Zscaler’s Agentic SOC uses a family of dozens of agents for detection, investigation and response, with capabilities also incorporating elements from the company’s Red Canary acquisition.
Addressing competitive questions around endpoint and security information and event management data, Geller said Zscaler has both network visibility and a presence on 60 million endpoints. He said the company’s endpoint capabilities provide data including data-loss prevention, policy inspection, user performance and software inventory.
Zscaler’s agents can also use endpoint detection and response data from partners including CrowdStrike, Microsoft Defender and SentinelOne, Geller said. He added that network telemetry can help investigators understand where a user or machine went and what activity occurred beyond an endpoint alert.
Sales Strategy and Product Adoption Rubin said Zscaler has expanded the range of ways it can approach prospective customers. In addition to user transformation, the company can discuss security for manufacturing facilities and branches, AI initiatives, application exposure management and Agentic SOC capabilities, he said.
However, Rubin emphasized that several AI offerings are still new. The Zscaler Zero Trust Exchange for AI Agents is in early access rather than general availability, while many AI capabilities have been released within the last six months.
Net retention rate was 115% for each of the last four quarters, according to Rubin. Z Flex, the company’s flexible pricing and packaging offer for longer-term and larger commitments, has produced a 30% uplift in annual recurring revenue in customer contracts on a before-and-after basis, Rubin said. Zscaler serves about 4,600 enterprise customers out of a target population of roughly 20,000, or about 25% penetration, Rubin said. To pursue new customers, Rubin said Zscaler is investing in sales representatives dedicated to enterprise prospecting territories, updating seller incentives and working with Carahsoft to pursue more opportunities in markets where Zscaler does not devote substantial internal resources.
Rubin said fourth-quarter sales productivity was the highest quarterly level the company has seen, while fiscal 2026 productivity was the highest since 2022. He said Agentic SOC is likely a larger fiscal 2028 opportunity, while Zero Trust Exchange for AI Agents could become more meaningful in the back half of the year.
On the outlook for Zscaler’s core Zero Trust business, Rubin said the company still sees substantial opportunity among customers that have not adopted its platform. Geller added that AI could drive an increase in internally developed applications, including applications built by employees who are not traditional developers. Those applications will still need security controls, he said.
Rubin said that, in the view of Zscaler founder Jay Chaudhry, securing agent-to-agent communication could represent an opportunity significantly larger than securing users.
About Zscaler (NASDAQ:ZS)Zscaler, Inc is a cloud-native cybersecurity company that provides security services designed to help organizations connect users, devices, applications and workloads securely over the internet. Its platform is built around a zero-trust security model, which verifies access based on identity, context and policy rather than relying primarily on a traditional corporate network perimeter.
The company's offerings include Zscaler Internet Access, which secures access to internet and software-as-a-service applications, and Zscaler Private Access, which provides secure, policy-based access to private applications without requiring conventional virtual private networks.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].
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Concurrent Investment Advisors LLC zvýšila ve 2. čtvrtletí podíl ve Zscaler o 292,3 % na 6 033 akcií. Zscaler zároveň oznámila EPS 1,19 USD a tržby 898,19 mil. USD, obojí nad odhady.
Concurrent Investment Advisors LLC grew its stake in shares of Zscaler, Inc. (NASDAQ:ZS – Free Report) by 292.3% during the second quarter, according to the company in its most recent 13F filing with the Securities & Exchange Commission. The fund owned 6,033 shares of the company’s stock after acquiring an additional 4,495 shares during the quarter. Concurrent Investment Advisors LLC’s holdings in Zscaler were worth $852,000 as of its most recent SEC filing.
A number of other institutional investors and hedge funds have also recently modified their holdings of the company. Binnacle Investments Inc purchased a new position in shares of Zscaler during the 3rd quarter valued at $25,000. AlphaCentric Advisors LLC bought a new position in shares of Zscaler in the 4th quarter valued at about $29,000. University of Texas Texas AM Investment Management Co. purchased a new position in Zscaler in the fourth quarter worth about $30,000. Mcguire Capital Advisors Inc. bought a new position in Zscaler during the fourth quarter valued at $32,000. Finally, Western Wealth Management LLC bought a new stake in Zscaler in the first quarter worth about $33,000. 46.45% of the stock is currently owned by hedge funds and other institutional investors.
Zscaler Price Performance Zscaler stock opened at $164.54 on Friday. The stock has a market capitalization of $26.83 billion, a P/E ratio of -421.90, a P/E/G ratio of 21.15 and a beta of 0.95. The company’s fifty day moving average price is $163.38 and its 200 day moving average price is $150.35. The company has a debt-to-equity ratio of 0.65, a quick ratio of 1.70 and a current ratio of 1.70. Zscaler, Inc. has a 1 year low of $114.63 and a 1 year high of $336.99.
Zscaler (NASDAQ:ZS – Get Free Report) last posted its quarterly earnings data on Thursday, September 3rd. The company reported $1.19 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.09 by $0.10. The company had revenue of $898.19 million for the quarter, compared to analysts’ expectations of $876.96 million. Zscaler had a positive return on equity of 1.23% and a negative net margin of 1.88%.Zscaler’s revenue was up 24.9% compared to the same quarter last year. During the same period in the previous year, the firm posted $0.89 EPS. Zscaler has set its FY 2027 guidance at 4.860-4.900 EPS and its Q1 2027 guidance at 1.150-1.160 EPS. As a group, equities research analysts anticipate that Zscaler, Inc. will post 0.56 earnings per share for the current fiscal year. Insiders Place Their Bets In related news, insider Robert Schlossman sold 3,146 shares of the business’s stock in a transaction dated Tuesday, June 16th. The shares were sold at an average price of $126.43, for a total value of $397,748.78. Following the sale, the insider directly owned 69,366 shares in the company, valued at approximately $8,769,943.38. The trade was a 4.34% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, insider Adam Geller sold 2,817 shares of the company’s stock in a transaction dated Monday, June 22nd. The shares were sold at an average price of $122.60, for a total transaction of $345,364.20. Following the completion of the transaction, the insider directly owned 42,314 shares in the company, valued at $5,187,696.40. The trade was a 6.24% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 16,772 shares of company stock valued at $2,139,799 over the last 90 days. Company insiders own 17.20% of the company’s stock.
Wall Street Analyst Weigh In A number of analysts have recently issued reports on ZS shares. Canaccord Genuity Group reissued a “buy” rating and set a $210.00 target price on shares of Zscaler in a research note on Friday, September 4th. Cantor Fitzgerald restated an “overweight” rating and set a $225.00 price objective on shares of Zscaler in a research note on Friday, September 4th. HC Wainwright upgraded shares of Zscaler from a “buy” rating to a “buy” rating in a report on Monday, May 18th. Stephens set a $215.00 price target on Zscaler in a research note on Friday, September 4th. Finally, Wells Fargo & Company upped their target price on Zscaler from $210.00 to $215.00 and gave the company an “overweight” rating in a research report on Friday, September 4th. Thirty-four analysts have rated the stock with a Buy rating, six have issued a Hold rating and two have given a Sell rating to the company’s stock. According to data from MarketBeat.com, the stock has a consensus rating of “Moderate Buy” and an average price target of $216.53.
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Zscaler Profile (Free Report)
Zscaler, Inc is a cloud-native cybersecurity company that provides security services designed to help organizations connect users, devices, applications and workloads securely over the internet. Its platform is built around a zero-trust security model, which verifies access based on identity, context and policy rather than relying primarily on a traditional corporate network perimeter.
The company’s offerings include Zscaler Internet Access, which secures access to internet and software-as-a-service applications, and Zscaler Private Access, which provides secure, policy-based access to private applications without requiring conventional virtual private networks.
Featured Stories Five stocks we like better than Zscaler Block Makes a Federal Trust Bank Move That Could Reshape Its Fintech Model Kroger’s Textbook Entry for Buy-and-Hold Investors AST SpaceMobile Looks to Extend Its 30-Day FCC Satellite Testing Window Amgen Drops 10% on a Trial It Didn’t Even Run Want to see what other hedge funds are holding ZS? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Zscaler, Inc. (NASDAQ:ZS – Free Report).
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Zscaler za šest měsíců klesl o 0,6 %, zatímco širší bezpečnostní odvětví přidalo 84,8 %. Firma zároveň očekává ve fiskálním roce 2027 zpomalení růstu tržeb i ARR na zhruba 17 %.
Key Takeaways Zscaler shares fell 0.6% in six months as major cybersecurity peers posted gains above 87%.Zscaler expects fiscal 2027 revenue and ARR growth of roughly 17%, down from 25% in fiscal 2026.Capital spending may reach the low teens of revenues in FY27, with free cash flow margins near 23%-23.5%. Zscaler, Inc. (ZS - Free Report) has struggled to keep pace with the broader cybersecurity sector. The stock has fallen 0.6% over the past six months, while the broader Zacks Security industry has gained 84.8%.
The performance gap becomes even more striking when compared with major peers, including Palo Alto Networks, Inc. (PANW - Free Report) , CrowdStrike Holdings, Inc. (CRWD - Free Report) and Fortinet, Inc. (FTNT - Free Report) . Palo Alto Networks, CrowdStrike and Fortinet have surged 103.5%, 93.4% and 87.3%, respectively, during the same period.
Zscaler 6-Month Price Return Performance
Image Source: Zacks Investment Research
This raises an important question for investors: Is Zscaler simply being overlooked, or is the weak stock performance signaling deeper problems
The numbers suggest the latter may be the bigger concern.
Zscaler’s Growth Story Is Losing MomentumZscaler's biggest problem is no longer its position in the cybersecurity market. It is the pace at which the business is growing.
For years, Zscaler was known for delivering revenue growth above 40%. That growth rate has steadily declined. In the fourth quarter of fiscal 2026 and for the full fiscal year, revenues increased 25% year over year. Annual recurring revenues (ARR) also rose 25% to $3.77 billion at the end of the fourth quarter.
While 25% growth is still respectable, it is a major slowdown for a company once viewed as one of the fastest-growing cybersecurity stocks.
ZS expects growth to weaken further in fiscal 2027. Zscaler is projecting roughly 17% growth in both revenues and ARR. Management has pointed to several reasons for the weaker outlook, including changes in sales leadership and execution uncertainties surrounding new product integrations.
The Zacks Consensus Estimate for fiscal 2027 revenue growth is in line with management’s guidance and points to another slowdown in fiscal 2028, with revenues expected to increase only 15.7%.
Zscaler Sales Estimates
Image Source: Zacks Investment Research
ZS’ Rising Spending Is Another Major ConcernZscaler is also spending more to support its long-term growth plans. The rapid adoption of artificial intelligence (AI) is creating new opportunities for cybersecurity companies. However, AI workloads also require more computing, memory, storage and networking capacity. Rising infrastructure costs are putting additional pressure on Zscaler's spending.
Capital expenditures accounted for 8.3% of fiscal 2026 revenues, up from 6.1% in fiscal 2025. Management expects capital spending to remain elevated in fiscal 2027 and potentially reach the low-teens percentage of revenues.
Higher investment can be justified when it leads to faster growth. The problem for Zscaler is that spending is rising, while revenue and ARR growth are expected to slow.
Free cash flow also reflects this pressure. Zscaler's free cash flow margin declined to 23% in fiscal 2026 from 27% in fiscal 2025. Management expects the margin to remain around 23%-23.5% in fiscal 2027.
Macroeconomic uncertainty, tariffs and geopolitical tensions add to the near-term risks. These factors could keep customers cautious about technology spending and make it harder for Zscaler to regain its previous growth rate.
Zscaler’s Cheap Valuation Could Be a TrapZscaler looks cheap compared with other cybersecurity stocks. The company currently trades at around 6.63 times forward 12-month sales, well below the 17.05 times for the broader Zacks Security industry.
Zscaler Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The discount is even more noticeable compared with major cybersecurity peers like Fortinet, Palo Alto Networks and CrowdStrike. Fortinet trades at 13.19 times forward 12-month sales, Palo Alto Networks at 19.16 times and CrowdStrike at 31.63 times.
At first glance, this valuation gap looks like a bargain for a high-quality cybersecurity stock.
However, a low valuation does not automatically make a stock attractive. Investors often pay higher multiples for companies that can deliver stronger and more consistent growth. But Zscaler's growth continues to slow, which justifies its low valuation.
In other words, ZS stock is cheap because investors are already pricing in a weaker growth outlook.
Final Thoughts: Exit ZS Stock for NowZscaler remains a major cybersecurity company with significant long-term opportunities, particularly as AI and cloud adoption create new security challenges. However, the stock's current investment case is difficult to defend.
The company is facing slowing revenue and ARR growth, rising capital spending and weaker free-cash-flow margins. At the same time, Palo Alto Networks, CrowdStrike and Fortinet are delivering much stronger stock returns.
Zscaler’s discounted valuation is attractive on the surface, but it is not enough to offset the deterioration in growth. It is wise to exit Zscaler stock for now and wait for clearer evidence that growth is stabilizing.
Zscaler currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A security partnership with OpenAI sent Cloudflare shares surging while cybersecurity giants CrowdStrike and Palo Alto sat out the rally entirely, raising a pointed question about which AI security narrative investors actually believe.
Shares of Cloudflare (NYSE:NET | NET Price Prediction) are ripping higher in Wednesday morning trading on a security tie-in with privately held OpenAI that investors are treating as a marquee validation of the company’s agentic-AI positioning. Cloudflare stock is up 9% to $308.52, extending the year-to-date gain to 56%. The size of the move relative to NET stock’s peers makes this a single-name repricing rather than a broad cybersecurity bid.
Zscaler (NASDAQ:ZS) is participating on a smaller scale, likely on the read-across from its own established OpenAI relationship through the DayBreak project and prior work with Anthropic. Zscaler stock is up 3% to $166.48, adding a bid to a name that had been under pressure heading into today.
Cloudflare’s Q2 FY2026 report already flagged the theme, with revenue of $696.1 million, up 36% year over year, and non-GAAP EPS of $0.29 against the $0.27 consensus. CEO Matthew Prince framed the company as sitting at the center of a “fundamental rewrite of the Internet for machine-to-machine traffic,” and the OpenAI service gives that pitch a concrete artifact investors can point to.
OpenAI Daybreak Partnership Fuels the Bid On September 3, Cloudflare announced a context-aware vulnerability discovery and remediation service delivered through Cloudflare Managed Defense and built on OpenAI’s Daybreak cyber models. The service identifies high-risk software vulnerabilities, blocks attacks at the network edge, and generates code patches, though no financial terms accompany the partnership.
The announcement lands several sessions before today’s move, so this reads as investor conviction building around an existing launch rather than breaking news. Momentum and late recognition are doing part of the work, and Prince stated on the Q2 FY2026 call that “the number one thing that’s causing our phone to ring from big companies is them saying, listen, we know we have to do AI, but we need to do it more securely,” a positioning the OpenAI service now anchors with a shippable product.
Sector Peers Sit Out the Rally The gap between Cloudflare and the rest of the group is the real story. CrowdStrike (NASDAQ:CRWD) stock is down 0.5% to $209.04, while Palo Alto Networks (NASDAQ:PANW) stock is down 0.85% to $334.13. Both companies have well-developed AI-security stories of their own that aren’t catching today’s bid.
For sector framing, the First Trust NASDAQ Cybersecurity ETF (NASDAQ:CIBR) is up 0.4% to $94.41, a muted gain that underscores how concentrated today’s flow is in Cloudflare. Furthermore, the Invesco QQQ Trust (NASDAQ:QQQ) is down 0.54% to $714.46. The CIBR ETF holds all four of today’s featured stocks, with Palo Alto and CrowdStrike as its heaviest cybersecurity weights and Cloudflare and Zscaler as smaller positions.
On the CrowdStrike Q2 FY2027 call, CEO George Kurtz stated that AIDR “can be bigger than the EDR business” given the volume of AI agents each employee will run, and net new ARR of $332.8 million grew 51% year over year. Palo Alto CEO Nikesh Arora called AI “a long-term tailwind for cybersecurity” on the Q4 FY2026 call after adding nearly $1 billion in net new next-generation security ARR in a single quarter. The absence of a sympathy move in either name reinforces the read that investors are paying for Cloudflare’s specific OpenAI positioning rather than a sector re-rate.
What to Watch Insider filings show recent share disposals from Cloudflare President and Co-Chair Michelle Zatlyn, CEO Matthew Prince, and CFO Thomas Seifert dated August 15, with additional Zatlyn dispositions running through August 21. The recurring monthly cadence points to scheduled trading plans rather than reactive selling, worth naming since a headline about a large insider sale can otherwise land the wrong way.
Investors can watch for whether Cloudflare stock holds above $300 as the session progresses, and whether the OpenAI narrative eventually pulls in secondary names beyond Zscaler. The company’s next scheduled data point is Q3 2026 results, with prior guidance calling for revenue of $736 million to $737 million and diluted net income per share of $0.34. Position sizing on one’s NET stock exposure here should reflect that today’s move is momentum-led rather than tied to newly disclosed financial terms.
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Z-Flex od společnosti Zscaler přinesl ve 4. čtvrtletí více než 770 milionů USD TCV, což je mezikvartálně o více než 60 % více. Zákazníci Z-Flexu ve fiskálním roce 2026 zvýšili průměrné ARR téměř o 30 %.
Key Takeaways Z-Flex generated over $770 million in fourth-quarter TCV, up more than 60% sequentially for Zscaler.Z-Flex customers posted nearly 30% average ARR uplift in fiscal 2026 as flexible deals eased expansion.Zscaler expects fiscal 2027 revenue growth of 16.6%-17.5% after fourth-quarter revenues rose 24.9%. Zscaler, Inc.’s (ZS - Free Report) Z-Flex offering is emerging as an important growth lever, helping the cybersecurity company deepen customer relationships while making it easier for enterprises to expand across its platform. The momentum was particularly strong in the fourth quarter of fiscal 2026.
In the fourth quarter, Z-Flex generated more than $770 million in total contract value (TCV), up more than 60% sequentially. For the full fiscal 2026, TCV exceeded $1.7 billion. Z-Flex offering gives customers multi-year commitments while allowing them to activate or swap modules without starting a new procurement process. This flexibility can shorten sales cycles and create more opportunities for upselling.
The results suggest that customers are responding well. Z-Flex customers recorded an average ARR (annual recurring revenues) uplift of nearly 30% in fiscal 2026. Zscaler’s fourth-quarter revenues increased 24.9% year over year to $898.2 million, while ARR rose 25% to $3.77 billion. Non-seat-based metered solutions, which include offerings beyond traditional user-based security, accounted for about 30% of new and upsell ACV in the fourth quarter and full-fiscal 2026, with related ARR growing more than 100%.
The key question is whether Z-Flex can keep driving adoption as Zscaler enters a slower-growth fiscal 2027. The company expects full-year revenue growth of 16.6%-17.5%. Still, rising platform adoption, larger customer deals and strong Z-Flex momentum provide reasons for optimism. If Zscaler can use flexible contracts to expand customer spending, Z-Flex could become an important support for growth while improving long-term revenue visibility.
PANW and CRWD: ZS’ Rivals Focus on Flexible PlatformsZscaler is not alone in using security platforms to expand customer spending. The company’s major competitors, Palo Alto Networks, Inc. (PANW - Free Report) and CrowdStrike Holdings, Inc. (CRWD - Free Report) , are also focusing on platform strategies to boost customer adoption.
Palo Alto Networks’ platformization strategy is translating into larger commitments, supported by expanding next-generation security ARR and RPO. PANW’s security platforms simplify security infrastructure for organizations by eliminating the need for multiple, stand-alone security appliances and software products.
This reduces the total cost of ownership, giving Palo Alto Networks a competitive edge and boosting customer adoption. In the third quarter of fiscal 2026, next-generation security ARR rose 60% year over year to $8.13 billion, and total RPO increased 36% to $18.4 billion, showing larger commitments across the platform.
Similar to Zscaler, CrowdStrike is also focusing on a flexible platform, Falcon Flex. By letting customers commit upfront and draw down spending across products over time, Falcon Flex is becoming a larger driver of platform consolidation.
In the second quarter of fiscal 2027, CrowdStrike added more than 935 Flex accounts, more than the prior three quarters combined, and Flex ending ARR exceeded $2.29 billion, up 101% year over year. Customers converting from standard subscriptions to Flex generated more than 40% average ending ARR uplift.
For Zscaler, the challenge is to make Z-Flex’s flexibility a clear advantage as rivals use platform-based models to drive adoption and larger customer commitments.
Zscaler’s Price Performance, Valuation & EstimatesZS shares have plunged 24.9% year to date, while the Zacks Security industry has surged 71.6%.
Zscaler YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, ZS trades at a forward price-to-sales ratio of 6.96, significantly below the industry’s average of 17.11.
Zscaler Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Zscaler’s fiscal 2027 and 2028 earnings implies a year-over-year increase of 7.1% and 16.4%, respectively. Estimates for fiscal 2027 have been revised downward over the past 60 days, while fiscal 2028 estimates have been lowered in the past 30 days.
Image Source: Zacks Investment Research
Zscaler currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zscaler uvedl Agentic SOC, novou AI-first platformu pro bezpečnostní operace, která má v reálném čase detekovat a zastavovat AI útoky. Produkt je dostupný globálně.
SAN JOSE, Calif., Sept. 09, 2026 (GLOBE NEWSWIRE) -- Zscaler, Inc. (NASDAQ: ZS), the cybersecurity platform for the AI era, today announced Zscaler Agentic SOC, a new approach to security operations built to proactively reduce exposures, scale human expertise and stop AI-driven attacks at machine speed. In today’s threat landscape, simply layering in AI capabilities onto the existing security stack will not provide the protection needed. Zscaler is delivering a new solution to the security operations center (SOC), purpose-built from the ground up with an AI-first approach to detect, investigate, and stop threats at machine speed.
Today’s threat landscape is defined by speed and stealth as AI-driven attacks move faster than SOC teams can manually correlate, analyze, and remediate. Threatlabz, Zscaler’s global research team, is also seeing a rise in evasive tactics, including the use of trusted sites to host attacks, abuse of legitimate remote management tools, and browser-based attacks. Zscaler Agentic SOC is built to meet that challenge by combining unique Zscaler telemetry, the world’s largest decoy mesh network, expert-validated agents, integrated Zscaler Zero Trust controls, and customers’ third-party controls to detect threats earlier and automate containment at machine speed.
To power Agentic SOC, Zscaler has partnered with leading frontier AI labs, including Anthropic and OpenAI. By integrating their frontier models alongside Zscaler's proprietary threat intelligence and zero trust telemetry, Zscaler is able to deliver AI agents that reason with greater depth, accuracy, and explainability than any single model or approach could achieve alone. This extends beyond threat detection, with Zscaler's open platform approach enabling direct integration with frontier models, allowing security teams to ingest vulnerability findings and operationalize them within their SOC workflows. This collaboration reflects Zscaler's commitment to building on the best available AI that includes speed, reliability and transparency that security operations demand.
“AI-driven attacks are moving faster than traditional SOC models were ever designed to handle,” said Deepen Desai, Executive Vice President of Cybersecurity at Zscaler. “Agentic SOC is a fundamental rethinking of security operations, built with agentic capabilities at its core to reduce exposures proactively, extend human expertise with AI agents and contain threats at machine speed. With unmatched inline telemetry, specialized AI agents and closed-loop remediation, Zscaler is giving security teams the visibility and control they need to outpace modern attackers.”
“The past year has made one thing clear: AI attacks are fundamentally changing the threat landscape, operating at a speed, scale, and level of adaptability that looks very different from traditional human-led activity,” said Allie Mellen, principal analyst and author of Code War: How Nations Hack, Spy, and Shape the Digital Battlefield. “To defend effectively, organizations must double down on the fundamentals — Zero Trust principles, preventing data exfiltration, limiting access, and making AI attacks as expensive as possible.”
Reimagining SecOps: The Zscaler Differentiation
Unified exposure and threat management: Zscaler connects proactive attack surface reduction with reactive threat defense in a single platform, enriching context and accelerating protection.Unmatched zero trust telemetry: Zscaler sits inline, capturing network, identity, endpoint, cloud and AI insights across its 750 billion daily zero trust transactions that security teams can operationalize for real-time detection and response.Specialized AI agents built on frontline experience: Zscaler AI agents have been trained and continuously tuned on more than 10 years of frontline SOC, managed detection and response and threat-hunting experience, informed by threat intelligence derived from thousands of customer environments globally.Closed-loop inline remediation: Zscaler automatically contains threats at machine speed with native inline controls that can isolate compromised users, block command-and-control communications, and cut off lateral movement. Integrations with customers’ third-party tooling provide increased options for nuanced responses to active threats. “Our team was drowning in alert noise, forcing top analysts into triage instead of proactive threat hunting,” said Andrea Liccardi, Sr. Cybersecurity Manager, Maire Tecnimont. “Zscaler Agentic SOC gives us full attack-path context using telemetry we already had in place, helping our team move from fragmented signals to faster, more informed decisions. Zscaler has proven to be one of our most valuable cybersecurity partners, continuously helping us improve operational efficiency, visibility, and our ability to focus our analysts on what really matters.”
Open Platform Integration
Zscaler Agentic SOC seamlessly integrates with your existing security ecosystem, pulling in third-party data to contextualize risks and threats. By triggering automated outbound actions, it proactively eliminates exposures and contains attacks at machine speed.
Key Features of Zscaler Agentic SOC
Data-rich context graph: Correlates real-time zero trust telemetry with third-party data to map, prioritize and investigate complex incident chains.Specialized AI agents: Autonomous agents perform dedicated roles across triage, root-cause investigation, assigning verdicts, and triggering response workflows, reducing analyst workload and accelerating defenses.Advanced detections informed by threat intelligence: Applies frontline threat research and rich telemetry to identify sophisticated attacks earlier and with greater precision.Continuous threat hunting and expert support: Combines AI speed with seasoned human judgment from Zscaler and Red Canary security experts. Availability and Additional Information
Zscaler Agentic SOC is available globally today. To learn more, register for the global launch webinar or visit zscaler.com/solutions/agentic-secops.
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Forward-Looking Statements
This press release contains forward-looking statements that are based on our management's beliefs and assumptions and on information currently available to our management. These forward-looking statements include the expected adoption, performance and benefits of Zscaler Agentic SOC, including its AI agents, third-party integrations and automated threat-containment and remediation capabilities. These forward-looking statements are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995. A significant number of factors could cause actual results to differ materially from statements made in this press release, including those factors related to Zscaler’s ability to deliver and achieve customer adoption of Zscaler Agentic SOC and the performance and effectiveness of its AI-driven and automated capabilities. Additional risks and uncertainties are set forth in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on September 3, 2026, which is available on our website at ir.zscaler.com and on the SEC's website at www.sec.gov. Any forward-looking statements in this release are based on the limited information currently available to Zscaler as of the date hereof, which is subject to change, and Zscaler will not necessarily update the information, even if new information becomes available in the future.
About Zscaler
Zscaler (NASDAQ: ZS) accelerates digital transformation so customers can be more agile, efficient, resilient, and secure. The Zscaler Zero Trust Exchange™ platform protects thousands of customers from cyberattacks and data loss by securely connecting users, devices, and applications in any location. Distributed across over 200 public data centers globally and thousands of private sites at the edge, the SASE-based Zero Trust Exchange is the world’s largest in-line cloud security platform.
Media Contact
Nick Gonzalez, Director, Public Relations, [email protected]
Zscaler vykázal ve 4. fiskálním čtvrtletí výnosy 898,19 mil. USD, meziročně +24,9 %, a upravený EPS byl o 10 centů nad odhady. Investoři ale čekají na jasnější signál, že přechod vedení obchodního týmu probíhá hladce.
Zscaler NASDAQ: ZS gave the market everything it could ask for in its fiscal fourth-quarter 2026 earnings report: outperformance, acceleration, wider margins, and strong guidance. The one thing it didn’t give was firm reassurance that the sales leadership transition was going smoothly. Execs noted the transition would play out in the first half of the year, but offered little color beyond that. The critical takeaway is that this is the catalyst for higher share prices, and news could come at any time.
Zscaler is not advancing as strongly as other cybersecurity stocks because of lost sales execs. While one was replaced early in the quarter, the loss led to cautious guidance, cautious analysts, and tepid stock price action. The upshot is that Zscaler, as the sector laggard with a catalyst ahead, is well positioned to advance aggressively once the headwind is removed. Until then, investors can focus on the results and price action, which underpin and reflect a market reversal.
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Zscaler Bottoms, on Cusp of Major Price InflectionZscaler’s chart price action is bullish, reflecting a Double-Bottom reversal pattern. The only bad news is that the pattern has yet to be confirmed, but that is likely over the coming months. Signs of strength include the action itself, high volume on buying days, and strengthening MACD, which points to improving momentum—each upswing is a little stronger than the last and likely to strengthen again, given the strength of results and guidance. Critical target levels are near $158 and $195, with the $158 support target potentially tested before a fresh high is set. Technical triggers include confirmed support at the low end of the range and/or a clear break to fresh highs.
Q4 results indicate the reversal will progress and new highs will be set. Revenue grew by 24.9%, accelerating year-over-year (YOY) to $898.19 million to outpace consensus by over 230 basis points. Strength came from new clients, penetration, and AI demand, with Security for AI Solutions growing 50% sequentially. Annual recurring revenue, an indicator of future revenue, also grew 25% both quarter over quarter and year over year, pointing to sustained strength in the coming quarters.
Margin news aligns with the bullish outlook, with GAAP and non-GAAP margins improving at the gross and operating levels. Key details include narrowing losses and improving adjusted profitability, with non-GAAP operating margin up 220 basis points (bps) to 24.3%. Adjusted earnings per share (EPS) were also solid, up by 34% and 10 cents better than expected. The only negative is a rising share count, but the increase is marginal, linked to share-based compensation, and insufficient to offset the equity gains.
The balance sheet reflects the impact of capital expenditures (CapEx), with cash down YOY, but that is the worst of the news. The cash depletion is offset by increased inventory and receivables; current and total assets are up, and liabilities increase. The net impact was a 44% increase in shareholder equity and the expectation of ample future cash flow to sustain future improvement.
Analysts Respond With Optimism: Forecast Complete Reversal in Price ActionZscaler Stock Forecast Today12-Month Stock Price Forecast:
$215.90
27.15% Upside
Moderate Buy
Based on 42 Analyst Ratings
Current Price$169.80High Forecast$390.00Average Forecast$215.90Low Forecast$150.00Zscaler Stock Forecast Details
Analysts expressed some skepticism about the sales team transition but were otherwise pleased with the results. Several analysts raised price targets immediately after the report, reinforcing the consensus target, which implies upside from recent levels. The fresh high is key because it puts the market above the critical resistance target and into a full technical reversal. In this scenario, ZS shares could move toward the high end of the range, pegged at $390.
Institutional activity suggests downside is limited, as they own about 46% of the stock and have been accumulating. More importantly, MarketBeat data indicates accelerated activity ahead of the release, underpinning late-summer support. The group is likely to remain active on dips, with the critical support target likely to trigger activity.
Zscaler’s biggest risk after the report is deceleration. While the latest results reflected acceleration, the guidance forecasts deceleration, which presents a headwind for sentiment. The caveat is that the quarter was strong and guidance came in well above forecasts. The likely outcome is that Zscaler has room to outperform its own guidance, potentially by a wide margin, as its zero-trust tools are in high demand, keeping analysts bullish and lifting estimates to align with reality. Agentic AI is the cybersecurity driver, and we’re in the very earliest phases of agentic rollout. Investors can expect agentic traffic and security needs to grow significantly over the next few years.
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Zscaler klesl o 4 % poté, co slabší výhled růstu pro fiskální rok 2027 zastínil překonání očekávání ve 4. čtvrtletí. Firma zároveň oznámila restrukturalizaci, která má snížit globální počet zaměstnanců o 3 %.
Zscaler posted a clean earnings beat and still sent the whole cybersecurity sector into retreat, raising an uncomfortable question about whether even the strongest growth numbers can justify where these stocks are priced right now.
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Cybersecurity software is under pressure again Friday morning after Zscaler (NASDAQ:ZS | ZS Price Prediction) issued fiscal 2027 growth guidance that overshadowed a clean fourth-quarter beat, and peers are drifting with it. The move sits against a broader tape that’s only modestly softer, so the group weakness stands out.
The SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is down 0.5% to $769.39, giving back a small piece of a hot summer run. The Invesco QQQ Trust (NASDAQ:QQQ) is essentially flat at $717.38, with large-cap tech holding its ground even as software wobbles.
Zscaler stock is down 4% to $170.25 and was down 21% year to date (YTD) through Thursday’s close, the sharpest post-earnings move in the group and a clear signal that fiscal 2027 guidance is what set the tone. Meanwhile, Palo Alto (NASDAQ:PANW) shares are unchanged at $331.96, perhaps still digesting a similar guidance-day reaction from earlier in the week. CrowdStrike (NASDAQ:CRWD) stock is down 1% to $212.99, seemingly slipping in sympathy on a day the company itself has no catalyst.
Guidance Steals the Show Zscaler reported fiscal fourth-quarter revenue of $898.2 million, up 25% year over year (YoY), alongside adjusted earnings of $1.19 per share that topped consensus. CEO Jay Chaudhry credited adoption of the company’s Zero Trust architecture and pointed to agentic AI as a durable driver. Annual recurring revenue reached $3.77 billion, up 25%, with organic ARR growing 20% once the Red Canary contribution is stripped out, according to Zscaler.
For fiscal 2027, Zscaler guided revenue and annual recurring revenue growth to a range of 16.6% to 17.5%, well below the 25% pace Zscaler just delivered in fiscal 2026. The company also announced a restructuring expected to reduce its global workforce by 3%, a cost signal that lines up with a slower growth rate. Management framed the deceleration as the effect of lapping Red Canary’s contribution, though investors aren’t waiting for that reconciliation to travel through the model.
Palo Alto and CrowdStrike Fit the Same Pattern Palo Alto reported strong fiscal fourth-quarter results on September 1, with revenue up 34.5% YoY to $3.41 billion and next-generation security ARR growing 63% to $9.10 billion, according to Zscaler. In the following session, Palo Alto stock still slipped, echoing a familiar setup where a valuation-heavy leader beats and gives back ground anyway. Its fiscal 2027 revenue guide of $14.10 billion to $14.20 billion implies 23% to 24% growth, a step down from fiscal 2026, and Palo Alto stock was up 80% YTD through Thursday’s close, even after this week’s slide.
CrowdStrike delivered its own strong quarter on August 26, with Q2 FY2027 net new ARR of $332.8 million growing 51% YoY and management raising the full-year revenue guide to $5.99 billion to $6.01 billion, according to Zscaler. The shares are easing today without a fresh CrowdStrike catalyst, which reads as sector sentiment traveling through the group after Zscaler’s outlook shock. CrowdStrike stock was up 81% YTD through Thursday’s close, so the three-name pattern points to a market repricing growth durability across cybersecurity leaders, with the two names that entered the session at rich multiples leaking less than the one whose multiple already reflected weaker growth.
What to Watch Next Zscaler’s Investor Day in New York on October 6, together with a September 9 launch webcast for the company’s agentic SecOps solution, gives management two near-term chances to reframe the growth conversation with fresh product detail. The Q1 fiscal 2027 revenue guide of $935 million to $939 million already implies 19% YoY growth, above the full-year midpoint and suggesting the deceleration back-loads later in the year as Red Canary comps normalize, according to Zscaler.
Investors can watch for whether Zscaler’s product cadence, its Security for AI ramp, and Z-Flex momentum stabilize the growth narrative before Q2 fiscal 2027 guidance lands. Anyone weighing cybersecurity-sector exposure here should size their positions to survive multi-quarter guidance resets, since valuation compression across the group can outlast any single earnings reaction.
Contact [email protected] for any questions or corrections.
Achieves strong Q4 and FY26 revenue growth of 25% year over year
Generates Q4 and FY26 ARR growth of 25% year over year
SAN JOSE, Calif., Sept. 03, 2026 (GLOBE NEWSWIRE) -- Zscaler, Inc. (Nasdaq: ZS), the leader in cloud security, today announced financial results for its fiscal fourth quarter and fiscal year ended July 31, 2026.
“AI represents one of the most significant opportunities in Zscaler's history. By connecting users, workloads, branches, and now agents directly to the applications they need without placing them on the network, we are uniquely equipped to help companies both combat the threats created by agentic AI and securely deploy AI agents and models,” said Jay Chaudhry, CEO, Chairman and Founder of Zscaler. “Our continued innovation across Zero Trust SASE, Agentic SecOps, Data Security, and Security for AI is driving increased platform adoption and creating new avenues for growth, as reflected in our strong Q4 results. As AI becomes foundational to how organizations operate, we are well positioned to extend our leadership as the cybersecurity platform for the AI era.”
“We delivered a strong fourth quarter, with revenue and ARR both growing 25% year over year, net new ARR growing 24%, and non-GAAP operating margin reaching a record 24%,” said Kevin Rubin, chief financial officer of Zscaler. “Our growth engine continues to broaden beyond users, with a strong contribution from non-seat-based solutions, continued Z-Flex momentum, record large-deal activity, and improving sales productivity. I am excited about our momentum as we enter fiscal 2027.”
Fourth Quarter Fiscal 2026 Results
Revenue: Grew 25% year over year to $898.2 million.ARR: Grew 25% year over year to $3,771 million, of which $246 million was net new ARR during the fourth quarter of fiscal 2026. Excluding the acquisition of Red Canary, which contributed ARR of $141 million, ARR grew 20% to $3,630 million and net new ARR grew 17%.Income (loss) from operations: GAAP loss from operations was $15.5 million, or 2% of revenue, compared to $32.2 million, or 4% of revenue, in the fourth quarter of fiscal 2025. Non-GAAP income from operations was $218.4 million, or a record 24% of revenue, compared to $158.9 million, or 22% of revenue, in the fourth quarter of fiscal 2025.Net income (loss): GAAP net loss was $3.4 million, compared to $17.6 million in the fourth quarter of fiscal 2025. Non-GAAP net income was $198.2 million, compared to $146.7 million in the fourth quarter of fiscal 2025.Net income (loss) per share, diluted: GAAP net loss per share, diluted, was $0.02, compared to $0.11 in the fourth quarter of fiscal 2025. Non-GAAP net income per share was $1.19, compared to $0.89 in the fourth quarter of fiscal 2025.Cash flow: Cash provided by operations was $279.3 million, or 31% of revenue, compared to $250.6 million, or 35% of revenue, in the fourth quarter of fiscal 2025. Free cash flow was $60.8 million, or 7% of revenue, compared to $171.9 million, or 24% of revenue, in the fourth quarter of fiscal 2025, reflecting capex and internal use software of $218.5 million in the fourth quarter of fiscal 2026 versus $78.7 million in the fourth quarter of fiscal 2025.Deferred revenue: Grew 19% year over year to $2,926 million as of July 31, 2026. Full Year Fiscal 2026 Results
Revenue: Grew 25% year over year to $3,353 million. Excluding the acquisition of Red Canary, Revenue grew 20% to $3,209 million.Income (loss) from operations: GAAP loss from operations was $133.3 million, or 4% of revenue, compared to $128.5 million, or 5% of revenue, in fiscal 2025. Non-GAAP income from operations was $767.1 million, or 23% of revenue, compared to $580.1 million, or 22% of revenue, in fiscal 2025.Net income (loss): GAAP net loss was $63.2 million, compared to $41.5 million in fiscal 2025. Non-GAAP net income was $704.2 million, compared to $534.8 million in fiscal 2025.Net income (loss) per share, diluted: GAAP net loss per share, diluted, was $0.39, compared to $0.27 in fiscal 2025. Non-GAAP net income per share was $4.21, compared to $3.28 in fiscal 2025.Cash flow: Cash provided by operations was $1,130 million, or 34% of revenue, compared to $972.5 million, or 36% of revenue, in fiscal 2025. Free cash flow was $779.1 million, or 23% of revenue, compared to $726.7 million, or 27% of revenue, in fiscal 2025. Change in Non-GAAP Measures Presentation
Beginning in fiscal 2026, we adopted a long-term projected non-GAAP tax rate of 21%, reduced from the previous rate of 23% which was applied to all prior periods. This adjustment aligns with the enactment of the One Big Beautiful Bill Act. The revised tax rate will apply prospectively. We will continue to assess the appropriate non-GAAP tax rate on a regular basis, which could be subject to changes for a variety of reasons, including the rapidly evolving global tax environment, significant changes in our geographic earnings mix, or other changes to our strategy or business operations.
Financial Outlook
For the first quarter of fiscal 2027, the company expects:
Revenue of $935 million to $939 million, approximately 19% year-over-year growth.Non-GAAP gross margin of approximately 80%Non-GAAP income from operations of $215 million to $217 million, approximately 25% to 26% year-over-year growth, representing a 23% operating margin.Non-GAAP net income per share of approximately $1.15 to $1.16, assuming approximately 170 million fully diluted shares outstanding and a non-GAAP tax rate of 21%. For the full year fiscal 2027, the company expects:
ARR of $4.396 billion to $4.426 billion, growth of approximately 16.6% to 17.4%.Revenue of approximately $3.908 billion to $3.938 billion, growth of 16.6% to 17.5%.Non-GAAP gross margin of approximately 80%Non-GAAP income from operations of $924 million to $932 million, growth of approximately 21%.Non-GAAP net income per share of $4.86 to $4.90, assuming approximately 173 million fully diluted shares outstanding and a non-GAAP tax rate of 21%.Free cash flow margin of approximately 23.0 to 23.5%. These statements are forward-looking and actual results may differ materially. Refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.
Guidance for non-GAAP income from operations and non-GAAP net income per share exclude, as applicable, stock-based compensation expense and related employer payroll taxes, amortization expense of acquired intangible assets and amortization of debt issuance costs. We have not reconciled our expectations of non-GAAP income from operations and non-GAAP net income per share to their most directly comparable GAAP measures because certain items are out of our control or cannot be reasonably predicted. For those reasons, we are also unable to address the probable significance of the unavailable information, the variability of which may have a significant impact on future results. Accordingly, a reconciliation for the guidance for non-GAAP income from operations and non-GAAP net income per share is not available without unreasonable effort.
For further information regarding why we believe that these non-GAAP measures provide useful information to investors, the specific manner in which management uses these measures, and some of the limitations associated with the use of these measures, please refer to the "Explanation of Non-GAAP Financial Measures" section of this press release.
Conference Call and Webcast Information
Zscaler will host a conference call for analysts and investors to discuss its fourth quarter of fiscal 2026 and outlook for its first quarter of fiscal 2027 and full year fiscal 2027 today at 1:30 p.m. Pacific time (4:30 p.m. Eastern time).
Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties, including, but not limited to, statements regarding our future financial and operating performance, including our financial outlook for the first quarter of fiscal 2027 and full year fiscal 2027. There are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including but not limited to: macroeconomic influences and instability, geopolitical events, operations and financial results and the economy in general; risks related to the use of AI in our platform; our ability to identify and effectively implement the necessary changes to address execution challenges; risks associated with managing our rapid growth, including fluctuations from period to period; our limited experience with new products and subscription and support introductions and the risks associated with new products and subscription and support offerings, including the discovery of software bugs; our ability to attract and retain new customers; the failure to timely develop and achieve market acceptance of new products and subscriptions as well as existing products and subscriptions and support; rapidly evolving technological developments in the market for network security products and subscription and support offerings and our ability to remain competitive; length of sales cycles; useful lives of our assets and other estimates; and general market, political, economic and business conditions.
Additional risks and uncertainties that could affect our financial results are included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth from time to time in our filings and reports with the Securities and Exchange Commission ("SEC"), including our Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2026, filed on May 26, 2026, as well as future filings and reports by us, copies of which are available on our website at ir.zscaler.com and on the SEC’s website at www.sec.gov. You should not rely on these forward-looking statements, as actual outcomes and results may differ materially from those contemplated by these forward-looking statements as a result of such risks and uncertainties. Additional information will also be set forth in other filings that we make with the SEC from time to time. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we do not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.
Use of Non-GAAP Financial Information
We believe that the presentation of non-GAAP financial information provides important supplemental information to management and investors regarding financial and business trends relating to our financial condition and results of operations. For further information regarding why we believe that these non-GAAP measures provide useful information to investors, the specific manner in which management uses these measures, and some of the limitations associated with the use of these measures, please refer to the “Explanation of Non-GAAP Financial Measures” section of this press release.
About Zscaler
Zscaler (NASDAQ: ZS) accelerates digital transformation so customers can be more agile, efficient, resilient, and secure. The Zscaler Zero Trust Exchange™ platform protects thousands of customers from cyberattacks and data loss by securely connecting users, devices, and applications in any location. Distributed across over 200 public data centers globally and thousands of private sites at the edge, the SASE-based Zero Trust Exchange is the world’s largest in-line cloud security platform.
Zscaler™ and the other trademarks listed at https://www.zscaler.com/legal/trademarks are either (i) registered trademarks or service marks or (ii) trademarks or service marks of Zscaler, Inc. in the United States and/or other countries. Any other trademarks are the properties of their respective owners.
Investor Relations Contacts
Kim Watkins
SVP, Investor Relations & Strategic Finance [email protected]
ZSCALER, INC.Condensed Consolidated Statements of Operations(in thousands, except per share amounts)(unaudited) Three Months Ended Year Ended July 31, July 31, 2026 2025 2026 2025 Revenue$898,185 $719,226 $3,352,523 $2,673,115 Cost of revenue(1) (2) (3) 208,964 172,240 777,629 618,178 Gross profit 689,221 546,986 2,574,894 2,054,937 Operating expenses: Sales and marketing(1) (2)(3) 381,363 330,594 1,495,812 1,259,158 Research and development(1) (2) (3) 241,483 177,606 903,399 672,485 General and administrative(1)(3)(4) 81,867 71,028 308,950 251,754 Total operating expenses 704,713 579,228 2,708,161 2,183,397 Loss from operations (15,492) (32,242) (133,267) (128,460)Interest income 35,042 33,175 136,132 125,364 Interest expense(5) (2,746) (2,074) (11,794) (9,522)Other expense, net (1,900) (762) (8,210) (5,673)Income (loss) before income taxes 14,904 (1,903) (17,139) (18,291)Provision for income taxes 18,273 15,675 46,040 23,187 Net loss$(3,369) $(17,578) $(63,179) $(41,478)Net loss per share, basic and diluted$(0.02) $(0.11) $(0.39) $(0.27)Weighted-average shares used in computing net loss per share, basic and diluted 161,872 156,496 160,219 154,404
(1) Includes stock-based compensation expense and related payroll taxes:
Cost of revenue$22,978 $19,324 $87,469 $70,998 Sales and marketing 69,116 60,780 294,537 259,562 Research and development 93,176 69,149 341,880 257,663 General and administrative 29,938 31,542 117,762 97,311 Total$215,208 $180,795 $841,648 $685,534
(2) Includes amortization expense of acquired intangible assets:
Cost of revenue$8,003 $3,655 $27,855 $14,975 Sales and marketing 4,277 425 15,613 1,700 Research and development — — — 145 Total$12,280 $4,080 $43,468 $16,820
(3) Includes restructuring and other charges:
Cost of revenue$583 $138 $1,333 $138 Sales and marketing 3,692 — 6,501 — Research and development 617 4,783 1,799 4,783 General and administrative 627 — 627 — Total$5,519 $4,921 $10,260 $4,921 (4) Includes acquisition-related expenses:$923 $1,316 $5,000 $1,316 (5) Includes amortization of debt issuance costs:$2,045 $1,346 $8,166 $4,293
ZSCALER, INC.Condensed Consolidated Balance Sheets(in thousands)(unaudited) July 31, July 31, 2026 2025 Assets Current assets: Cash and cash equivalents$928,354 $2,389,023 Short-term investments 2,545,797 1,183,386 Accounts receivable, net 1,149,073 992,181 Deferred contract acquisition costs 215,577 180,819 Prepaid expenses and other current assets 192,432 148,881 Total current assets 5,031,233 4,894,290 Property and equipment, net 753,001 543,377 Operating lease right-of-use assets 137,231 89,772 Deferred contract acquisition costs, noncurrent 402,423 328,722 Acquired intangible assets, net 214,355 47,323 Goodwill 1,218,098 417,730 Other noncurrent assets 110,373 98,674 Total assets$7,866,714 $6,419,888 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable$47,972 $46,906 Accrued expenses and other current liabilities 133,304 93,984 Accrued compensation 234,640 181,807 Deferred revenue 2,480,501 2,054,417 Operating lease liabilities 64,894 52,497 Total current liabilities 2,961,311 2,429,611 Convertible senior notes 1,696,355 1,700,727 Deferred revenue, noncurrent 445,272 413,609 Operating lease liabilities, noncurrent 94,575 43,352 Other noncurrent liabilities 70,940 33,316 Total liabilities 5,268,453 4,620,615 Stockholders’ Equity Common stock 163 159 Additional paid-in capital 3,874,379 2,980,591 Accumulated other comprehensive income (loss) (23,544) 8,081 Accumulated deficit (1,252,737) (1,189,558)Total stockholders’ equity 2,598,261 1,799,273 Total liabilities and stockholders’ equity$7,866,714 $6,419,888
ZSCALER, INC.Condensed Consolidated Statements of Cash Flows(in thousands)(unaudited) Three Months Ended Year Ended July 31, July 31, 2026 2025 2026 2025 Cash Flows from Operating Activities Net loss$(3,369) $(17,578) $(63,179) $(41,478)Adjustments to reconcile net loss to cash provided by operating activities: Depreciation and amortization expense 42,933 30,260 148,544 104,361 Amortization expense of acquired intangible assets 12,280 4,080 43,468 16,820 Amortization of deferred contract acquisition costs 54,018 44,811 203,693 166,310 Amortization of debt issuance costs 2,045 1,346 8,166 4,293 Operating lease costs 22,487 15,102 82,934 62,998 Stock-based compensation expense 211,591 172,654 821,923 661,350 Accretion of investments purchased at a discount (87) (2,061) (4,655) (15,923)Unrealized (gains) losses on hedging transactions, net 264 1,231 (772) 369 Deferred income taxes (20,713) 3,490 (20,387) (14,351)Other 627 (72) 7,484 987 Changes in operating assets and liabilities, net of effects of business acquisitions: Accounts receivable (420,031) (376,516) (139,989) (256,010)Deferred contract acquisition costs (127,492) (90,467) (312,152) (230,453)Prepaid expenses, other current and noncurrent assets 977 (29,390) (28,076) (41,572)Accounts payable 9,365 (11,415) (10,627) 17,532 Accrued expenses, other current and noncurrent liabilities 18,243 12,213 36,417 5,180 Accrued compensation 54,003 26,690 44,590 20,997 Deferred revenue 445,776 483,041 379,873 573,052 Operating lease liabilities (23,632) (16,815) (67,601) (62,009)Net cash provided by operating activities 279,285 250,604 1,129,654 972,453 Cash Flows from Investing Activities Purchases of property, equipment and other assets (199,837) (60,046) (277,304) (164,252)Capitalized internal-use software (18,684) (18,637) (73,207) (81,508)Payments for business acquisitions, net of cash acquired (148,026) — (918,074) (834)Purchase of strategic investments (6,171) (38) (10,413) (824)Purchases of short-term investments (282,564) (393,993) (2,254,279) (1,280,629)Proceeds from maturities of short-term investments 171,232 225,132 589,880 1,101,025 Proceeds from sale of short-term investments 113,097 — 290,665 — Net cash used in investing activities (370,953) (247,582) (2,652,732) (427,022)Cash Flows from Financing Activities Proceeds from issuance of common stock upon exercise of stock options — 84 3,984 3,581 Proceeds from issuance of common stock under the employee stock purchase plan 37,910 41,219 59,416 63,563 Payment of holdback amounts related to a business acquisition — (352) (110) (792)Proceeds from issuance of the 2028 convertible senior notes — 1,725,000 — 1,725,000 Payments for issuance costs related to the 2028 convertible senior notes — (24,150) (684) (24,150)Purchases of capped calls related to the 2028 convertible senior notes — (196,650) (197) (196,650)Payments for settlement of the 2025 convertible senior notes — (1,150,040) — (1,150,040)Net cash provided by financing activities 37,910 395,111 62,409 420,512 Net increase (decrease) in cash and cash equivalents (53,758) 398,133 (1,460,669) 965,943 Cash and cash equivalents at beginning of period 982,112 1,990,890 2,389,023 1,423,080 Cash and cash equivalents at end of period$928,354 $2,389,023 $928,354 $2,389,023
ZSCALER, INC.Reconciliation of GAAP to Non-GAAP Financial Measures(in thousands, except percentages)(unaudited) Three Months Ended Year Ended July 31, July 31, 2026 2025 2026 2025 Revenue$898,185 $719,226 $3,352,523 $2,673,115 Non-GAAP Gross Profit and Non-GAAP Gross Margin GAAP gross profit$689,221 $546,986 $2,574,894 $2,054,937 Add: Stock-based compensation expense and related payroll taxes(1) 22,978 19,324 87,469 70,998 Amortization expense of acquired intangible assets 8,003 3,655 27,855 14,975 Restructuring and other charges 583 138 1,333 138 Non-GAAP gross profit$720,785 $570,103 $2,691,551 $2,141,048 GAAP gross margin 77% 76% 77% 77%Non-GAAP gross margin 80% 79% 80% 80% Non-GAAP Income from Operations and Non-GAAP Operating Margin GAAP loss from operations$(15,492) $(32,242) $(133,267) $(128,460)Add: Stock-based compensation expense and related payroll taxes(2) 215,208 180,795 841,648 685,534 Amortization expense of acquired intangible assets 12,280 4,080 43,468 16,820 Restructuring and other charges 5,519 4,921 10,260 4,921 Acquisition-related expenses 923 1,316 5,000 1,316 Non-GAAP income from operations$218,438 $158,870 $767,109 $580,131 GAAP operating margin(2)% (4)% (4)% (5)%Non-GAAP operating margin 24% 22% 23% 22%
(1) Includes acquisition-related stock-based compensation expense and related payroll taxes of $0.1 million for the fourth quarter of fiscal 2025, and $0.1 million and $0.2 million for fiscal 2026 and fiscal 2025, respectively. Acquisition-related stock-based compensation includes deferred merger consideration subject to post-combination service vesting conditions, performance stock awards, and acquisition replacement awards.
(2) Includes acquisition-related stock-based compensation expense and related payroll taxes of $19.8 million and $8.2 million for the fourth quarter of fiscal 2026 and fiscal 2025, respectively, and $57.4 million and $33.1 million for fiscal 2026 and fiscal 2025, respectively.
ZSCALER, INC.Reconciliation of GAAP to Non-GAAP Financial Measures(in thousands, except per share amounts)(unaudited) Three Months Ended Year Ended July 31, July 31, 2026 2025 2026 2025 Non-GAAP Net Income per Share, Diluted Net loss$(3,369) $(17,578) $(63,179) $(41,478)Add: GAAP provision for income taxes 18,273 15,675 46,040 23,187 GAAP income (loss) before income taxes 14,904 (1,903) (17,139) (18,291)Add: Stock-based compensation expense and related payroll taxes(1) 215,208 180,795 841,648 685,534 Amortization expense of acquired intangible assets 12,280 4,080 43,468 16,820 Restructuring and other charges 5,519 4,921 10,260 4,921 Acquisition-related expenses 923 1,316 5,000 1,316 Amortization of debt issuance costs 2,045 1,346 8,166 4,293 Non-GAAP net income before income taxes 250,879 190,555 891,403 694,593 Non-GAAP provision for income taxes(2) 52,684 43,830 187,193 159,757 Non-GAAP net income$198,195 $146,725 $704,210 $534,836 GAAP provision for income taxes 18,273 15,675 46,040 23,187 Add: Income tax and other tax adjustments(2) 34,411 28,155 141,153 136,570 Non-GAAP provision for income taxes(2)$52,684 $43,830 $187,193 $159,757 Non-GAAP effective tax rate(2) 21% 23% 21% 23% Non-GAAP net income$198,195 $146,725 $704,210 $534,836 Add: Non-GAAP interest expense, net of tax related to the convertible senior notes — 183 — 1,011 Numerator used in computing non-GAAP net income per share, diluted$198,195 $146,908 $704,210 $535,847 GAAP net loss per share, diluted$(0.02) $(0.11) $(0.39) $(0.27)Stock-based compensation expense and related payroll taxes(3) 1.29 1.09 5.04 4.20 Amortization expense of acquired intangible assets 0.07 0.02 0.26 0.10 Restructuring and other charges 0.03 0.03 0.06 0.03 Acquisition-related expenses 0.01 0.01 0.03 0.01 Amortization of debt issuance costs 0.01 0.01 0.05 0.03 Income tax and other tax adjustments(2) (0.21) (0.17) (0.84) (0.84)Non-GAAP interest expense, net of tax related to the convertible senior notes — — — 0.01 Adjustment to total fully diluted earnings per share(4) 0.01 0.01 — 0.01 Non-GAAP net income per share, diluted$1.19 $0.89 $4.21 $3.28 Weighted-average shares used in computing GAAP net loss per share, diluted 161,872 156,496 160,219 154,404 Add: Outstanding potentially dilutive equity incentive awards 706 4,457 2,959 3,949 Add: Convertible senior notes 3,925 6,211 3,925 7,269 Less: Antidilutive impact of capped call transactions(5) — (1,580) — (2,210)Weighted-average shares used in computing non-GAAP net income per share, diluted 166,503 165,584 167,103 163,412 (1) Includes acquisition-related stock-based compensation expense and related payroll taxes of $19.8 million and $8.2 million for the fourth quarter of fiscal 2026 and fiscal 2025, respectively, and $57.4 million and $33.1 million for fiscal 2026 and fiscal 2025, respectively.
(2) Beginning in fiscal 2026, we adopted a long-term projected non-GAAP tax rate of 21%, reduced from the previous rate of 23%, which was applied to all prior periods. This adjustment aligns with the enactment of the One Big Beautiful Bill Act. The revised tax rate will apply prospectively. We will continue to assess the appropriate non-GAAP tax rate on a regular basis, which could be subject to changes for a variety of reasons, including the rapidly evolving global tax environment, significant changes in our geographic earnings mix, or other changes to our strategy or business operations.
(3) The dilutive impact of acquisition-related stock-based compensation expense and related payroll taxes was $0.12 and $0.05 per share for the fourth quarter of fiscal 2026 and fiscal 2025, respectively, and $0.34 and $0.20 per share for fiscal 2026 and fiscal 2025, respectively.
(4) The sum of the fully diluted earnings per share impact of individual reconciling items may not total to fully diluted non-GAAP net income per share due to the weighted-average shares used in computing the GAAP net loss per share differs from the weighted-average shares used in computing the non-GAAP net income per share, and due to rounding of the individual reconciling items. The GAAP net loss per share calculation uses a lower share count as it excludes potentially dilutive shares, which are included in calculating the non-GAAP net income per share.
(5) We exclude the in-the-money portion of the convertible senior notes for non-GAAP weighted-average diluted shares as they are covered by our capped call transactions. Our outstanding capped call transactions are antidilutive under GAAP but are expected to mitigate the dilutive effect of the convertible senior notes, and therefore are included in the calculation of non-GAAP diluted shares outstanding. The capped calls have an antidilutive impact when the average stock price of our common stock in a given period is higher than their exercise price.
ZSCALER, INC.Reconciliation of GAAP to Non-GAAP Financial Measures(in thousands, except percentages)(unaudited) Three Months Ended Year Ended July 31, July 31, 2026 2025 2026 2025 Free Cash Flow Net cash provided by operating activities$279,285 $250,604 $1,129,654 $972,453 Less: Purchases of property, equipment and other assets (199,837) (60,046) (277,304) (164,252)Capitalized internal-use software (18,684) (18,637) (73,207) (81,508)Free cash flow$60,764 $171,921 $779,143 $726,693 Free Cash Flow Margin Net cash provided by operating activities, as a percentage of revenue 31% 35% 34% 36%Less: Purchases of property, equipment and other assets, as a percentage of revenue(22)% (8)% (8)% (6)%Capitalized internal-use software, as a percentage of revenue(2)% (3)% (3)% (3)%Free cash flow margin 7% 24% 23% 27%
ZSCALER, INC.
Explanation of Non-GAAP and Other Financial Measures
In addition to our results determined in accordance with generally accepted accounting principles in the United States of America (GAAP), we believe the following non-GAAP measures are useful in evaluating our operating performance. We use the following non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only, as it has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In particular, free cash flow is not a substitute for cash provided by operating activities. Additionally, the utility of free cash flow as a measure of our liquidity is further limited as it does not represent the total increase or decrease in our cash balance for a given period. In addition, other companies, including companies in our industry, may calculate similarly titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. A reconciliation of our historical non-GAAP financial measures to their most directly comparable financial measures stated in accordance with GAAP has been included in this press release. There is no GAAP measure that is comparable to ARR, so we have not reconciled the ARR data included to any GAAP measure. Investors are cautioned that there are a number of limitations associated with the use of non-GAAP financial measures and key metrics as analytical tools. Investors are encouraged to review these reconciliations, and not to rely on any single financial measure to evaluate our business.
Expenses Excluded from Non-GAAP Measures
Stock-based compensation expense is excluded primarily because it is a non-cash expense that management believes is not reflective of our ongoing operational performance. Employer payroll taxes related to stock-based compensation, which is a cash expense, are excluded because these are tied to the timing and size of the exercise or vesting of the underlying equity incentive awards and the price of our common stock at the time of vesting or exercise, which may vary from period to period independent of the operating performance of our business. Amortization expense of acquired intangible assets and amortization of debt issuance costs from the convertible senior notes are excluded because these are non-cash expenses and are not reflective of our ongoing operational performance. Acquisition-related expenses incurred with business acquisitions are excluded because these are not reflective of our ongoing operational performance. Restructuring and other charges includes severance and termination benefits in connection with a restructuring plan to streamline operations and to align people, roles and projects to our strategic priorities. These expenses are excluded because they fluctuate in amount and frequency and are not reflective of our core business operating performance.
Beginning in fiscal 2026, we adopted a long-term projected non-GAAP tax rate of 21%, reduced from the previous rate of 23% which was applied to all prior periods. This adjustment aligns with the enactment of the One Big Beautiful Bill Act. The revised tax rate will apply prospectively. We will continue to assess the appropriate non-GAAP tax rate on a regular basis, which could be subject to changes for a variety of reasons, including the rapidly evolving global tax environment, significant changes in our geographic earnings mix, or other changes to our strategy or business operations.
Non-GAAP and Other Financial Measures
Non-GAAP Gross Profit and Non-GAAP Gross Margin. We define non-GAAP gross profit as GAAP gross profit excluding stock-based compensation expense and related employer payroll taxes, amortization expense of acquired intangible assets and restructuring and other charges. We define non-GAAP gross margin as non-GAAP gross profit as a percentage of revenue.
Non-GAAP Income from Operations and Non-GAAP Operating Margin. We define non-GAAP income from operations as GAAP loss from operations excluding stock-based compensation expense and related employer payroll taxes, amortization expense of acquired intangible assets, restructuring and other charges and acquisition-related expenses. We define non-GAAP operating margin as non-GAAP income from operations as a percentage of revenue.
Non-GAAP Net Income per Share, Diluted. We define non-GAAP net income as GAAP net loss excluding stock-based compensation expense and related employer payroll taxes, amortization expense of acquired intangible assets, restructuring and other charges, amortization of debt issuance costs, acquisition-related expenses and the non-GAAP provision for income taxes adjustment. We define non-GAAP net income per share, diluted, as non-GAAP net income plus the applicable non-GAAP interest expense related to the convertible senior notes divided by the weighted-average diluted shares outstanding. The weighted-average diluted shares outstanding includes the effect of potentially diluted common stock equivalents outstanding during the period and the anti-dilutive impact of the capped call transactions entered into in connection with the convertible senior notes.
Annual Recurring Revenue. ARR refers to the next 12 months of revenue from subscription contracts as of the measurement date. To establish ARR for a customer, we assume that any contract expiring during the next 12 months will be renewed under the existing terms.
Bookings. We define bookings as the total customer contract value over the entire duration of each such customer contract. This includes all recurring subscription fees committed for the full term of each such customer contract.
Free Cash Flow and Free Cash Flow Margin. We define free cash flow as net cash provided by operating activities less purchases of property, equipment and other assets and capitalized internal-use software. We define free cash flow margin as free cash flow divided by revenue. We believe that free cash flow and free cash flow margin are useful indicators of liquidity that provide information to management and investors about the amount of cash generated from our operations that, after the investments in property, equipment and other assets and capitalized internal-use software, can be used for strategic initiatives.
Zscaler stock soared on Thursday after the cloud security company beat Wall Street's fiscal fourth-quarter estimates as rising artificial intelligence risk spurred urgent demand for cyber tools.
Here's how the company performed compared to LSEG estimates:
Earnings per share: $1.19 adjusted vs. $1.09 expectedRevenue: $898 million vs. $877 million expectedRevenue jumped 25% from about $719 million last year. Zscaler reported a net loss of $3.37 million, a loss of 2 cents per share, up from a net loss of $17.58 million, a loss of 11 cents per share, a year ago.
CEO Jay Chaudhry said the company's Zero Trust cloud security architecture and innovative technology drove this quarter's beat.
Chaudhry told CNBC he's "very bullish" on the recently launched platform for AI agent iteration, a potentially larger long-term annual recurring revenue opportunity. The tool is gaining early momentum and should accelerate rapidly into 2028 and 2029, he said.
"It's a longer-term opportunity, but I think it's a fantastic opportunity with significant barriers to entry," Chaudhry said.
Annual recurring revenue rose 25% from a year ago to $3.77 billion, beating a $3.75 billion estimate from StreetAccount.
Cybersecurity stocks have skyrocketed this year on demand for new tools to secure swarms of AI agents. The period has also been defined by highly sophisticated cyber models and agent-led attacks capable of bringing down entire systems.
Read more CNBC tech newsApple enters John Ternus era as AI challenges and memory crunch intensifyGoPro joins AI bonanza with pivot into data centers as shares skyrocket 40%AI data center play SB Energy, which is backed by Softbank and Nvidia, files for IPOWaymo and Zoox expand into more U.S. markets as robotaxi race heats upWhile competitors have notched new highs this year, Zscaler shares have plummeted 20%. Last quarter, the stock recorded its worst day ever after management said it was taking a "prudent approach" to guidance following two sales leader departures.
But Chaudhry says the market is misunderstanding Zscaler's differentiation play.
"The core competency we bring to the table is pretty unique, and as the adoption of AI agents happens, the market will recognize more and more that Zscaler is a critical player," he said.
Like other cyber executives, Chaudhry views security for AI as one of the biggest opportunities. Over the last year, bookings totaled $100 million and have grown 50% sequentially, quarter over quarter, he said.
Zscaler's guidance also beat estimates. The company expects $935 million to $939 million in revenue for the first quarter and adjusted EPS of $1.15 to $1.16. That beat a revenue estimate of $927 million and adjusted EPS of $1.08 per share
For the full year, the company projects revenue in the range of $3.91 billion and $3.94 billion, compared to a $3.90 billion estimate. Adjusted EPS is expected to range between $4.86 and $4.90, versus a $4.60 per-share estimate.
Zscaler (ZS -3.78%) reports its fiscal fourth-quarter results after the market's close tomorrow, Sept. 3. While several cybersecurity stocks are near all-time highs, Zscaler has been out of favor recently, as management gave cautious guidance in its previous earnings report.
However, with two of the largest cybersecurity companies, CrowdStrike (NASDAQ: CRWD) and Palo Alto Networks (NASDAQ: PANW), recently reporting results that show AI is boosting cybersecurity demand, could Zscaler beat the modest expectations investors have for its business?
Image source: The Motley Fool.
As we've seen numerous times this earnings season, beating top- and bottom-line expectations isn't always enough. With that in mind, here are some of the things I'll be watching tomorrow when the company reports.
3 Things I'll be watchingFirst of all, Zscaler doesn't exactly have a high bar to clear. Management's previous guidance calls for roughly 22% year-over-year revenue growth in the fiscal fourth quarter, and the company has a strong recent history of outperforming its own expectations. In the fiscal third quarter, Zscaler reported 25% growth in both revenue and ARR, as well as its highest-ever adjusted operating margin. But while I'll be watching this, it isn't my main focus.
In the company's fiscal third-quarter report, the problem wasn't Zscaler's top and bottom line. That isn't why the stock fell sharply after the report. It was the guidance. The company's initial fiscal 2027 outlook called for annual recurring revenue growth to slow to just 16%-17%. With CrowdStrike just reporting its highest net new ARR growth rate ever, a significant guidance raise from Zscaler could be a major catalyst for the stock.
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After all, a big reason CrowdStrike is trading near all-time highs is that management issued fiscal 2027 guidance calling for net new ARR growth of 630 basis points (6.3 percentage points) above the previous level.
I'll also be watching the RPO (remaining performance obligation), which essentially tells us Zscaler's revenue backlog. This grew 30% in the fiscal third quarter to $6.5 billion, and if the company continues to book revenue faster than its top-line reflects, it could indicate healthy growth acceleration in the near future.
It's all about the outlookAs we've seen with several other AI-focused businesses in this earnings season, simply beating expectations isn't enough. As I'm writing this, Palo Alto's stock is falling despite topping estimates. The biggest factor is what management says about the future. If the company confirms a deceleration in growth, even a strong top-line beat might not matter. On the other hand, strong guidance would likely make investors far more confident heading into the new fiscal year.
The acceleration of agentic AI and the threats that come with it have forced enterprises to bump up spending on cyber defenses. Zscaler's two largest peers just issued earnings reports that clearly show this. The company is well-positioned, with its zero-trust architecture, to lead the way in securing agentic workflows. If the numbers it reports tomorrow, along with its forward guidance and management commentary, indicate that the company is gaining traction in the agentic AI cybersecurity push, the stock could react very positively.
Bank of Nova Scotia bought a new stake in Zscaler, Inc. (NASDAQ:ZS – Free Report) during the 2nd quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission. The firm bought 253,500 shares of the company’s stock, valued at approximately $35,782,000. Bank of Nova Scotia owned about 0.16% of Zscaler at the end of the most recent quarter.
Several other institutional investors also recently modified their holdings of ZS. Vanguard Group Inc. lifted its stake in shares of Zscaler by 0.5% in the 4th quarter. Vanguard Group Inc. now owns 11,423,424 shares of the company’s stock valued at $2,569,357,000 after purchasing an additional 55,521 shares during the period. BlackRock Inc. acquired a new stake in shares of Zscaler during the second quarter worth $1,396,028,000. First Trust Advisors LP increased its holdings in Zscaler by 36.2% in the first quarter. First Trust Advisors LP now owns 3,518,678 shares of the company’s stock valued at $493,635,000 after purchasing an additional 935,781 shares during the last quarter. Price T Rowe Associates Inc. MD increased its holdings in Zscaler by 43.3% in the fourth quarter. Price T Rowe Associates Inc. MD now owns 2,572,358 shares of the company’s stock valued at $578,576,000 after purchasing an additional 777,414 shares during the last quarter. Finally, State Street Corp lifted its stake in Zscaler by 3.4% in the fourth quarter. State Street Corp now owns 2,337,604 shares of the company’s stock valued at $525,774,000 after buying an additional 77,800 shares during the period. Institutional investors and hedge funds own 46.45% of the company’s stock.
Zscaler Stock Performance Shares of Zscaler stock opened at $181.74 on Monday. The company has a debt-to-equity ratio of 0.72, a current ratio of 1.86 and a quick ratio of 1.86. The firm has a market cap of $29.39 billion, a price-to-earnings ratio of -378.62, a price-to-earnings-growth ratio of 106.97 and a beta of 0.94. The stock’s 50-day moving average is $151.10 and its 200-day moving average is $150.19. Zscaler, Inc. has a one year low of $114.63 and a one year high of $336.99.
Zscaler (NASDAQ:ZS – Get Free Report) last posted its quarterly earnings data on Tuesday, May 26th. The company reported $1.08 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $1.01 by $0.07. The company had revenue of $850.48 million for the quarter, compared to the consensus estimate of $835.14 million. Zscaler had a negative net margin of 2.44% and a negative return on equity of 0.37%. The firm’s revenue was up 25.4% compared to the same quarter last year. During the same period last year, the company earned $0.84 earnings per share. Zscaler has set its Q4 2026 guidance at 1.080-1.090 EPS and its FY 2026 guidance at 4.100-4.110 EPS. Equities analysts predict that Zscaler, Inc. will post 0.13 earnings per share for the current fiscal year. Zscaler News Summary Here are the key news stories impacting Zscaler this week:
Positive Sentiment: KeyBanc raised its price target to $210 from a lower prior target, citing what it views as a valuation discount and potential for the cybersecurity company to regain investor confidence. KeyBanc upgrades Zscaler price target Positive Sentiment: Additional bullish analyst actions supported the stock. Mizuho lifted its price target to $210, Stifel Nicolaus raised its target to $200, and Cantor Fitzgerald assigned Zscaler an “Overweight” rating. The actions suggest Wall Street sees upside despite the stock’s sharp decline from its 52-week high. Mizuho raises Zscaler price target Stifel raises Zscaler price target Cantor Fitzgerald rates Zscaler Overweight Positive Sentiment: Rising AI-driven cyber threats reinforce demand for Zscaler’s platform. NTT DATA CEO Abhijit Dubey said frontier AI is making attacks more sophisticated, expanding the attack surface, and accelerating attacks to machine speed—an industry trend that could increase demand for cloud-based zero-trust security. AI and cybersecurity threats Positive Sentiment: Zscaler’s expanded Carahsoft partnership targets U.S. small and midsize businesses with standardized bundles, simpler pricing, and broader partner enablement. The initiative could diversify Zscaler’s customer base and create an additional growth channel beyond large enterprises. Zscaler and Carahsoft SMB partnership Negative Sentiment: AI-lab IPO speculation remains a risk to sentiment. Reports that Anthropic may pursue a massive public offering renewed concerns that investors could redirect capital from enterprise software stocks toward AI companies, contributing to recent pressure on Zscaler. Zscaler and AI IPO concerns Analyst Upgrades and Downgrades A number of equities analysts have issued reports on ZS shares. Wells Fargo & Company raised their target price on Zscaler from $180.00 to $210.00 and gave the stock an “overweight” rating in a report on Monday, August 17th. Stifel Nicolaus increased their price target on shares of Zscaler from $175.00 to $200.00 and gave the company a “buy” rating in a research report on Wednesday, August 19th. The Goldman Sachs Group reissued a “neutral” rating and set a $179.00 price objective on shares of Zscaler in a research note on Wednesday, May 27th. Citigroup restated a “market outperform” rating on shares of Zscaler in a report on Wednesday, May 27th. Finally, Morgan Stanley lowered their target price on shares of Zscaler from $155.00 to $145.00 and set an “equal weight” rating for the company in a research note on Wednesday, May 27th. Thirty-four equities research analysts have rated the stock with a Buy rating, six have given a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat, the company currently has an average rating of “Moderate Buy” and an average target price of $215.36.
Read Our Latest Stock Report on ZS
Insider Buying and Selling In other news, CFO Kevin Rubin sold 503 shares of the business’s stock in a transaction dated Monday, July 27th. The shares were sold at an average price of $147.12, for a total transaction of $74,001.36. Following the transaction, the chief financial officer directly owned 41,398 shares in the company, valued at $6,090,473.76. The trade was a 1.20% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Adam Geller sold 2,817 shares of the business’s stock in a transaction dated Monday, June 22nd. The stock was sold at an average price of $122.60, for a total transaction of $345,364.20. Following the transaction, the insider owned 42,314 shares in the company, valued at $5,187,696.40. This represents a 6.24% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders sold 16,269 shares of company stock worth $2,052,589. 17.20% of the stock is owned by corporate insiders.
Zscaler Company Profile (Free Report)
Zscaler is a cloud security company that delivers a cloud-native platform to protect users, applications and data as organizations move away from traditional, network-centric security architectures. The company focuses on a zero trust approach that assumes no implicit trust for users or devices, providing secure access to the internet, SaaS applications and private applications regardless of where users are located. Zscaler positions its services as an alternative to legacy appliances and site-centric VPNs, aiming to simplify security while enabling modern, distributed workforces.
Key offerings are built around the Zscaler Zero Trust Exchange, a multi-tenant cloud platform that enforces security and access policies in-line.
Read More Five stocks we like better than Zscaler VIG, VYM, and VYMI: Which Vanguard Dividend ETF Is Right for You? 3 Closed-End Funds to Maximize Dividend Payments Rocket Lab’s Sell-Off Is Fading—Is It Finally Safe to Buy? $27 Billion in Buybacks: 3 Stocks Betting Their Strong Runs Aren’t Over Want to see what other hedge funds are holding ZS? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Zscaler, Inc. (NASDAQ:ZS – Free Report).
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Key Takeaways Zscaler plans higher CapEx as AI adoption drives demand for more infrastructure and secure workloads.ZS posted 25% revenue growth in Q3, while AI Protect generated more than $100 million in 12-month bookings.Zscaler cut FY26 free cash flow margin guidance to 22.8%-23.3% as CapEx pressures cash flow. Zscaler, Inc. (ZS - Free Report) is preparing for higher capital expenditures as the rapid adoption of artificial intelligence (AI) creates new cybersecurity demands. The company needs to expand its infrastructure to handle increasing data volumes and secure AI workloads, but the added spending could pressure free cash flow in the near term.
Management previously indicated that fiscal 2026 capital expenditures could reach the high-single-digit percentage range of revenues, up from its earlier mid-single-digit forecast. CapEx could increase by another 200 basis points as a percentage of revenues in fiscal 2027. Higher costs for memory, storage and processors are expected to drive much of the increase. To manage these costs, Zscaler has been moving some fiscal 2027 equipment purchases into the fourth quarter of fiscal 2026 to secure current prices.
The bigger question is whether AI-driven demand can generate enough growth to justify the investment. So far, the signs are encouraging. Zscaler’s third-quarter fiscal 2026 revenues increased 25% year over year to $850.4 million, while annual recurring revenues also rose 25% to $3.53 billion. Its AI Protect solution generated more than $100 million in bookings over the past 12 months, showing that AI security is moving beyond an early-stage opportunity.
Zscaler also has enough financial strength to support higher spending. The company generated free cash flow of $136 million in the third quarter and $718.4 million in the first nine months of fiscal 2026. Free cash flow margin for the first three quarters of fiscal 2026 was 29%. However, rising capital expenditure is likely to hurt the company’s cash flow. During the last quarterly results, management lowered its fiscal 2026 free cash flow margin guidance range to 22.8%-23.3% from the earlier forecast of 26.5%-27%.
Higher CapEx creates a near-term financial headwind, but strong AI security demand could make the investment worthwhile if Zscaler converts infrastructure spending into sustained revenue growth. The Zacks Consensus Estimate for fiscal 2026 and 2027 indicates year-over-year revenue growth of 24.6% and 16.9%, respectively.
How Are ZS’ Rivals Investing to Capture AI Security Growth?Palo Alto Networks, Inc. (PANW - Free Report) and CrowdStrike Holdings, Inc. (CRWD - Free Report) are taking a different approach to the AI security opportunity. Rather than relying heavily on physical infrastructure spending, both companies are directing more resources toward software, product development and acquisitions.
Palo Alto Networks has been expanding its AI and identity security capabilities through major acquisitions, including buyout deals for agentic security firm Portkey, endpoint specialist Koi Security, and major identity play CyberArk Software.
PANW has also been directing investment toward software integration, such as its Cortex XSIAM platform and Prisma AIRS AI Gateway. The company has also collaborated with AI infrastructure leaders like NVIDIA through which it is embedding security directly into AI infrastructure. This strategy allows Palo Alto Networks to pursue AI growth without relying primarily on higher traditional CapEx.
CrowdStrike is following a similar software-focused model. Its non-GAAP research & development spending jumped 25.3% year over year to $273.4 million in the first quarter of fiscal 2027.
The company has also strengthened its AI security portfolio through acquisitions, including SGNL in January 2026 and Pangea in September 2025. Pangea added AI detection and response capabilities to Falcon, helping CrowdStrike protect AI data, models, agents, identities and infrastructure.
Zscaler’s Price Performance, Valuation & EstimatesZS shares have plunged 16.7% year to date, while the Zacks Security industry surged 85%.
Zscaler YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, ZS trades at a forward price-to-sales ratio of 7.77, significantly below the industry’s average of 18.85.
Zscaler Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Zscaler’s fiscal 2026 and 2027 earnings implies a year-over-year increase of 26.2% and 10.7%, respectively. Estimates for fiscal 2026 have remained unchanged over the past 60 days, while fiscal 2027 estimates have been revised upward in the past 30 days.
Image Source: Zacks Investment Research
Zscaler currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zscaler ve 3. čtvrtletí fiskálního roku 2026 uzavřel rekordní počet ACV obchodů nad 1 milion USD. Roční opakované tržby vzrostly o 25 % na více než 3,5 miliardy USD.
Key Takeaways Zscaler closed a record number of ACV deals worth more than $1 million in the third quarter of fiscal 2026.Zscaler's ARR rose 25% to over $3.5 billion as more than 700 customers adopted Zero Trust Everywhere.ZS' Z-Flex contract value topped $480 million, up more than 60% sequentially, boosting upsell opportunities. Zscaler, Inc. (ZS - Free Report) is seeing strong momentum in large enterprise deals as organizations continue to modernize their cybersecurity infrastructure. Growing demand for Zero Trust security, AI-powered protection and platform consolidation is encouraging customers to sign larger, multi-year contracts, providing the company with better revenue visibility and long-term growth opportunities.
Zscaler delivered a record performance in the third quarter of fiscal 2026. The company closed its highest-ever number of annual contract value deals worth more than $1 million for the fiscal third quarter. Annual recurring revenues increased 25% year over year to more than $3.5 billion, while remaining performance obligations climbed about 30% to nearly $6.5 billion, reflecting a healthy pipeline of future revenues.
The expanding adoption of ZS’ platform is a key driver behind these larger deals. More than 700 enterprise customers are now using Zscaler’s Zero Trust Everywhere framework, up from more than 550 in the previous quarter. Customers are increasingly deploying multiple products, including Zero Trust Users, Zero Trust Cloud, Zero Trust Branch and AI Protect, instead of purchasing standalone security solutions.
Z-Flex is also supporting deal growth. The flexible purchasing program generated more than $480 million in total contract value during the quarter, up more than 60% sequentially. By allowing customers to activate additional products within existing agreements, Z-Flex is increasing upselling opportunities.
With enterprises consolidating cybersecurity vendors and expanding AI deployments, Zscaler appears well-positioned to continue winning larger contracts. This trend should support sustained revenue growth, stronger customer retention and higher recurring revenues over the long term. The Zacks Consensus Estimate for Zscaler’s fiscal 2026 revenues is pegged at $3.33 billion, implying year-over-year growth of nearly 24.6%.
How Do Zscaler’s Rivals Fare in Winning Large Deals?Two major rivals competing with Zscaler for large enterprise cybersecurity contracts are Palo Alto Networks, Inc. (PANW - Free Report) and CrowdStrike Holdings, Inc. (CRWD - Free Report) .
Palo Alto Networks’ platformization strategy, which combines network, cloud and security operations on one platform, is helping the company secure larger multi-product contracts and deepen relationships with global enterprises. In the third quarter of fiscal 2026, revenues increased 31% year over year to $3 billion, while next-generation security ARR climbed 60% to $8.13 billion.
CrowdStrike is also gaining traction with large customers through its Falcon cybersecurity platform. In the first quarter of fiscal 2027, ARR reached approximately $5.51 billion, up 24% year over year, while revenues rose 26% to roughly $1.39 billion. The company continues to expand adoption of multiple Falcon modules, increasing average contract values and encouraging customers to standardize on a single cybersecurity platform.
Zscaler’s Price Performance, Valuation & EstimatesZS shares have plunged 31.3% year to date against the Zacks Security industry’s surge of 64.2%.
Zscaler YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, ZS trades at a forward price-to-sales ratio of 7.49, significantly below the industry’s average of 18.06.
Zscaler Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Zscaler’s fiscal 2026 and 2027 earnings implies a year-over-year increase of 26.2% and 10.7%, respectively. Estimates for fiscal 2026 have remained unchanged over the past 60 days, while fiscal 2027 estimates have been revised upward in the past 30 days.
Image Source: Zacks Investment Research
Zscaler currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zscaler a Schwarz Digits spouštějí v Německu suverénní Zero Trust SASE platformu na platformě STACKIT pro zákazníky v Evropě. Cílí na ochranu proti hrozbám spojeným s AI a splnění evropských regulací.
Partnership operates the Zscaler Zero Trust Exchange™ platform on Schwarz Digits’ cloud infrastructure STACKIT in Germany.Joint offering delivers sovereign Zero Trust SASE for customers across Europe, combining Zscaler’s deep cybersecurity expertise with data sovereignty. BAD FRIEDRICHSHALL, Germany and MUNICH, July 28, 2026 (GLOBE NEWSWIRE) -- Zscaler, the cybersecurity platform for the AI era, and Schwarz Digits, the IT and digital division of Schwarz Group, today announced a strategic partnership. The collaboration combines the Zscaler Zero Trust Exchange platform with Schwarz Digits’ European sovereign cloud STACKIT. This creates a sovereign Zero Trust Secure Access Service Edge (SASE) service designed to prevent AI-driven threats and increase cyber resilience. Now available to customers across Europe, this offering is hosted in German data centers and operated by STACKIT. While built for organizations across every industry, the solution is tailored specifically for mission-critical operations in public administration, defense, financial services, and healthcare.
European customers are increasingly demanding sovereign technology while cybersecurity threats continue to escalate rapidly in scale, speed and sophistication, driven in particular by the use of AI by malicious actors. At the same time, European regulations including NIS2, DORA, the AI Act, and others have elevated cybersecurity to a board-level priority. Organizations must address digital sovereignty concerns while also meeting strict cybersecurity regulatory requirements and not losing sight of performance demands. This balancing act can be difficult to achieve.
Schwarz Digits and Zscaler solve these needs simultaneously by deploying the Zscaler security platform in Schwarz Digits’ data centers to deliver a holistic Zero Trust SASE sovereign cloud approach. Organizations can now secure their hybrid workforce while meeting demanding operational resilience and supply-chain security expectations. The joint offering covers the deployment, management, operation, and support of a state-of-the-art cybersecurity cloud platform, so that customer data and operations remain protected against cyber threats and aligned with European legal requirements.
Christian Müller, CEO of Schwarz Digits, explains: “Technological independence begins with infrastructure. Through this partnership, we are taking network security to a new level: we are evolving existing security architectures and focusing on high-performance identity verification. For our customers, this means even stronger protection against cyberattacks.”
“In an era of AI-driven cyber threats, a modern Zero Trust SASE solution is the only effective way to protect sensitive enterprise data,” says Misha Kuperman, Chief Reliability Officer at Zscaler. “Our partnership with Schwarz Digits is a concrete demonstration of our long-term commitment to Europe: Together, we help our customers eliminate their attack surface and prevent the lateral movement of threats, while still maintaining compliance with European regulations through EU data residency. This enables the highest level of security while aligning with European digital sovereignty regulations.”
“Our customers in the private and public sector need secure, resilient IT infrastructure without compromising on digital sovereignty. By uniting the expertise of two technology leaders, we make this a reality: Zscaler provides an advanced Zero Trust SASE architecture to counter AI-driven cyberattacks, while Schwarz Digits ensures a sovereign cloud infrastructure through STACKIT. This helps to ensure all data remains in the EU and is protected against third-party access,” says Bernd Wagner, CSO of Schwarz Digits.
More information
Please find more information at www.schwarz-digits.de/en.
Media Contacts
Nick Gonzalez, Director of Public Relations [email protected]
About Zscaler
Zscaler (NASDAQ: ZS) is a pioneer and global leader in zero trust security. The world’s largest businesses, critical infrastructure organizations, and government agencies rely on Zscaler to secure users, branches, applications, data & devices, and to accelerate digital transformation initiatives. Distributed across 160+ data centers globally, the Zscaler Zero Trust Exchange™ platform combined with advanced AI combats billions of cyber threats and policy violations every day and unlocks productivity gains for modern enterprises by reducing costs and complexity.
Forward-Looking Statements
This press release contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to our management. These forward-looking statements include the expected delivery, adoption, and performance of the Zero Trust security service, including deployment on STACKIT infrastructure. These forward-looking statements are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995. A significant number of factors could cause actual results to differ materially from statements made in this press release, including those factors related to the deployment, performance, regulatory alignment, customer adoption and market acceptance of the joint offering across Europe. Additional risks and uncertainties are set forth in our most recent Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (“SEC”) on May 26, 2026, which is available on our website at ir.zscaler.com and on the SEC’s website at www.sec.gov. Any forward-looking statements in this release are based on the limited information currently available to Zscaler as of the date hereof, which is subject to change, and Zscaler will not necessarily update the information, even if new information becomes available in the future.
About Schwarz Digits
Schwarz Digits is the IT and digital division of Schwarz Group and offers impressive digital products and services that meet the high German data protection standards. With the aim of achieving the greatest possible digital sovereignty, Schwarz Digits provides the IT infrastructure and solutions for the extensive ecosystem of Schwarz Group’s companies and develops it for the future. Schwarz Digits' sovereign core services include Cloud, Cyber Security, Data and AI, Communication and Workspace. In addition, Schwarz Digits creates optimal conditions for the development of trend-setting innovations for end customers, companies and public sector organizations.
Zscaler měl na konci třetího čtvrtletí více než 700 zákazníků Zero Trust Everywhere, oproti více než 550 v předchozím čtvrtletí. ARR vzrostl o 25 % na více než 3,5 miliardy USD.
Key Takeaways Zscaler had more than 700 Zero Trust Everywhere customers, up from over 550 a quarter earlier.ARR rose 25% to $3.5 billion, while remaining performance obligations reached about $6.5 billion at Q3 end.Customers are expanding deployments across user, cloud, branch and data security solutions. Zscaler Inc.’s (ZS - Free Report) Zero Trust Everywhere strategy is becoming an important growth driver as enterprises look to secure users, cloud workloads and branch locations through a single platform. Instead of relying on multiple security products, customers are increasingly adopting Zscaler’s integrated Zero Trust architecture, creating more opportunities for the company to expand revenues from existing accounts.
The adoption trend is gaining momentum. At the end of the third quarter of fiscal 2026, Zscaler had more than 700 Zero Trust Everywhere enterprise customers, up from more than 550 in the previous quarter. These customers use the company’s Zero Trust Users, Zero Trust Cloud and Zero Trust Branch solutions together, reflecting broader platform adoption across organizations.
This strategy is also encouraging larger customer commitments. During the quarter, Zscaler reported annual recurring revenues (ARR) of more than $3.5 billion, up 25% year over year, while remaining performance obligations increased roughly 30% to about $6.5 billion. The company also closed a record number of new annual contract value deals worth more than $1 million during the third quarter.
Customer success stories highlight the opportunity. A healthcare technology company initially sought user security but later expanded its deployment to include Zero Trust Cloud, Zero Trust Branch and multiple data security modules. Existing customers are also increasing spending as they broaden platform adoption.
As cyber threats become more sophisticated and AI workloads continue to grow, enterprises are looking for unified security platforms rather than standalone products. With its expanding Zero Trust Everywhere customer base and strong cross-selling opportunities, Zscaler appears well-positioned to drive sustained revenue growth in the coming years. The Zacks Consensus Estimate for fiscal 2026 and 2027 revenues indicates year-over-year growth of 24.6% and 17.2%, respectively.
How Do Zscaler’s Rivals Compare in Platform Adoption?Cybersecurity companies pursuing a similar platform expansion strategy are Palo Alto Networks, Inc. (PANW - Free Report) and Fortinet, Inc. (FTNT - Free Report) .
Palo Alto Networks has been driving its platformization strategy by encouraging enterprises to replace multiple point products with its integrated security platform. In the third quarter of fiscal 2026, the company generated more than $3 billion in revenues, up 31% year over year, while next-generation security ARR climbed 60% to $8.13 billion. Its broad portfolio across network security, cloud security and security operations enables customers to consolidate vendors, increasing cross-selling opportunities and recurring revenues.
Fortinet is also expanding its unified cybersecurity platform through Secure Networking, Unified SASE and Security Operations solutions. In the first quarter of 2026, the company reported revenues of approximately $1.85 billion, up 20% year over year, while Unified SASE billings rose 23%. Fortinet continues to benefit as enterprises modernize branch security and adopt integrated security architectures.
Zscaler’s Price Performance, Valuation & EstimatesZS shares have plunged 33.3% year to date against the Zacks Security industry’s surge of 73.5%.
Zscaler YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, ZS trades at a forward price-to-sales ratio of 6.24, significantly below the industry’s average of 19.35.
Zscaler Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Zscaler’s fiscal 2026 and 2027 earnings implies a year-over-year increase of 26.2% and 10.6%, respectively. Estimates for fiscal 2026 and 2027 have been revised upward over the past 60 days.
Image Source: Zacks Investment Research
Zscaler currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zscaler uzavřel na 143,55 USD, což znamenalo denní pokles o 3,98 %, tedy výrazně víc než 0,28% ztrátu indexu S&P 500. Akcie jsou ale za poslední měsíc stále výše o 18,8 %.
In the latest trading session, Zscaler (ZS - Free Report) closed at $143.55, marking a -3.98% move from the previous day. This change lagged the S&P 500's 0.28% loss on the day. Elsewhere, the Dow lost 1.09%, while the tech-heavy Nasdaq added 0.2%.
The stock of cloud-based information security provider has risen by 18.8% in the past month, leading the Computer and Technology sector's loss of 1.22% and the S&P 500's gain of 1.64%.
Analysts and investors alike will be keeping a close eye on the performance of Zscaler in its upcoming earnings disclosure. The company is forecasted to report an EPS of $1.09, showcasing a 22.47% upward movement from the corresponding quarter of the prior year. In the meantime, our current consensus estimate forecasts the revenue to be $877.19 million, indicating a 21.96% growth compared to the corresponding quarter of the prior year.
ZS's full-year Zacks Consensus Estimates are calling for earnings of $4.14 per share and revenue of $3.33 billion. These results would represent year-over-year changes of +26.22% and +24.57%, respectively.
Investors should also take note of any recent adjustments to analyst estimates for Zscaler. Such recent modifications usually signify the changing landscape of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 9.1% higher within the past month. At present, Zscaler boasts a Zacks Rank of #3 (Hold).
Looking at its valuation, Zscaler is holding a Forward P/E ratio of 36.14. For comparison, its industry has an average Forward P/E of 50.32, which means Zscaler is trading at a discount to the group.
It is also worth noting that ZS currently has a PEG ratio of 2.47. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ZS's industry had an average PEG ratio of 3.31 as of yesterday's close.
The Security industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 169, this industry ranks in the bottom 32% of all industries, numbering over 250.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
Zscaler čelí rostoucím nákladům na infrastrukturu, ale ve 3. fiskálním čtvrtletí výnosy stouply o 25 % na 850 milionů USD a roční opakované tržby přesáhly 3,5 miliardy USD.
Key Takeaways Zscaler expects fiscal 2026 capex to reach high single digits of revenues as hardware costs rise.Zscaler raised branch appliance prices and is buying equipment early to lock in current prices.Zscaler revenues rose 25% to $850M in fiscal Q3, with annual recurring revenues above $3.5B. Zscaler, Inc. (ZS - Free Report) is facing rising infrastructure costs as demand for artificial intelligence (AI)-powered cybersecurity services increases. Higher prices for memory, storage and processors are expected to raise spending on data center equipment and Zero Trust Branch appliances. However, the company believes its growing scale, pricing actions and operational discipline can help offset these cost pressures over time.
Management expects capital expenditures to reach the high single digits as a percentage of revenues in fiscal 2026 compared with its earlier expectation of the mid-single digits. It also anticipates fiscal 2027 capital expenditures as a percentage of revenues to rise by as much as 200 basis points from the 2026 level because of higher hardware costs. To reduce the impact, Zscaler has already increased prices for its branch appliances and is purchasing equipment early to lock in current prices.
Despite these near-term challenges, the company continues to deliver strong financial performance. In the third quarter of fiscal 2026, revenues increased 25% year over year to $850 million, while annual recurring revenues exceeded $3.5 billion. Remaining performance obligations reached roughly $6.5 billion, providing strong visibility into future revenues.
Profitability also remains healthy. Zscaler’s third-quarter non-GAAP gross margin expanded 40 basis points year over year to 80.7%, while non-GAAP operating margin increased by 140 basis points to 23%. Year to date, the company generated a free cash flow margin of 29%, highlighting its ability to fund growth while maintaining financial discipline.
As its customer base expands and long-term contracts grow, Zscaler's larger revenue scale should help absorb higher infrastructure costs. Continued demand for AI security and Zero Trust solutions could further strengthen its operating leverage over the long run. The Zacks Consensus Estimate for fiscal 2026 is currently pegged at $3.33 billion, indicating a year-over-year increase of approximately 25%.
How Are ZS’ Rivals Managing Rising Infrastructure Costs?Zscaler’s major competitors, including Palo Alto Networks, Inc. (PANW - Free Report) and CrowdStrike Holdings, Inc. (CRWD - Free Report) , are also investing heavily in AI infrastructure to strengthen their cybersecurity capabilities.
Palo Alto Networks is investing heavily in AI, cloud security and platform integration while using its large scale to protect margins. In the third quarter of fiscal 2026, revenues increased 31% year over year to $3 billion, and next-generation security ARR surpassed $8 billion. Palo Alto Networks continues to consolidate multiple security products into one platform, helping spread infrastructure costs across a larger customer base and supporting long-term profitability.
CrowdStrike is also expanding AI-powered capabilities while keeping profitability strong. In the first quarter of fiscal 2027, revenues rose 26% year over year to approximately $1.39 billion, while annual recurring revenues reached about $5.51 billion, up 24%. Its cloud-native Falcon platform reduces the need for on-premise hardware, allowing the company to scale efficiently even as AI workloads increase.
Zscaler’s Price Performance, Valuation & EstimatesZS shares have plunged 33.5% year to date against the Zacks Security industry’s surge of 72.3%.
Zscaler YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, ZS trades at a forward price-to-sales ratio of 6.25, significantly below the industry’s average of 19.33.
Zscaler Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Zscaler’s fiscal 2026 and 2027 earnings implies year-over-year increases of 26.2% and 10.6%, respectively. Estimates for fiscal 2026 and 2027 have been revised upward over the past 60 days.
Image Source: Zacks Investment Research
Zscaler currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zscaler letos klesl zhruba o 34 % kvůli pokračujícím čistým ztrátám a zpomalujícímu růstu výnosů. Firma čeká ve fiskálním roce 2027 růst výnosů jen 16 % až 17 %.
Zscaler's (ZS +0.72%) stock price has dipped by roughly 34% year to date as continued net losses and a decelerating revenue growth rate weigh down on the cybersecurity stock. The company may get a boost as its cybersecurity solutions can safeguard artificial intelligence (AI) agents, which are expected to become more popular. However, there are meaningful hurdles that can prolong this correction.
Image source: Getty Images.
Zscaler's revenue growth has been steadily decelerating When a stock delivers substantial year-over-year revenue growth, it's easier to look over high net losses and focus on the bullish thesis. However, those same losses become more central to a stock analysis once revenue growth slows.
That has been the case for Zscaler in recent years. It has a five-year annualized revenue growth rate of 44% that drops to 34.8% for its three-year CAGR. Zscaler only reported 25% year-over-year revenue growth in its fiscal 2026 third quarter. It's a sign that growth has slowed down considerably, and the company remains unprofitable.
Zscaler mentioned in its Q3 FY26 press release that it is attracting new customers and expanding relationships with existing ones while hinting at a focus on "driving profitable growth across multiple vectors."
Profitability may be on the way soon, based on the company only posting a -1.6% net profit margin in its fiscal 2026 third quarter. However, the excitement about profitability may be muted by a steady trend of slower revenue growth.
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It's really hard to value Zscaler, but guidance suggests the overall picture will worsen Investors can't use the P/E ratio to assess Zscaler since it is unprofitable. The stock has a 6.6 price-to-sales ratio, which is much lower than those of CrowdStrike and Fortinet. It's not the best metric to use, since a company on the verge of bankruptcy can have a price-to-sales ratio below 1, but other valuation metrics like the P/E and PEG ratios aren't suitable at this stage.
While Zscaler has a healthy balance sheet that includes $4.6 billion in total current assets, its long-term outlook isn't great. Although the company touted agentic AI as a meaningful opportunity, guidance suggests that revenue deceleration will continue.
Zscaler anticipates 16% to 17% year-over-year revenue growth in fiscal 2027. It's a far cry from the 44% annualized revenue growth rate over the past five years. The company's financial growth rates are well removed from what they were when Zscaler commanded a price of almost $400 per share back in 2021.
Decelerating growth, combined with guidance suggesting more of the same, doesn't mean the AI opportunity is as groundbreaking as the company suggests. Artificial intelligence has been a major catalyst for many companies, but the numbers suggest this type of transformation isn't currently underway at Zscaler.
Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CrowdStrike, Fortinet, and Zscaler. The Motley Fool has a disclosure policy.
Zscaler ve 3. fiskálním čtvrtletí překonal odhady: zisk na akcii činil 1,08 USD a tržby vzrostly o 25 % na 850,4 milionu USD. Firma zároveň zvýšila výhled na 4. čtvrtletí i celý fiskální rok 2026.
A month has gone by since the last earnings report for Zscaler (ZS - Free Report) . Shares have added about 0.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Zscaler due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Zscaler, Inc. before we dive into how investors and analysts have reacted as of late.
Zscaler Q3 Earnings Surpass Estimates, Revenues Increase Y/YZscaler posted third-quarter fiscal 2026 non-GAAP earnings of $1.08 per share, up 28.6% year over year. The figure beat the Zacks Consensus Estimate of $1.00 by 8%.
Zscaler’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 8.4%.
Revenues rose 25% year over year to $850.4 million, topping the Zacks Consensus Estimate of $834 million by 1.88% and exceeding management’s guidance of $834-$836 million. The quarter reflected continued demand for the company’s Zero Trust platform, supported by expanding customer commitments.
Zscaler’s Q3 in DetailZscaler’s third-quarter momentum was broad-based geographically. The Americas represented 56% of revenues in the quarter, up approximately 31% year over year, and delivered the strongest growth rate among regions. EMEA accounted for 28% of revenues, up approximately 16%, while Asia Pacific and Japan contributed 16%, rising about 23%.
The company also noted that roughly 46% of its remaining performance obligation was classified as current, underscoring near-term visibility tied to committed, non-cancelable future revenues.
Remaining Performance Obligations (“RPO”), representing Zscaler’s committed non-cancelable future revenues, were $6.5 billion as of April 30, which increased 30% year over year. Current RPO accounted for 46% of the total revenues.
Enterprise traction continued to reflect in the customer mix. Zscaler ended the quarter with 748 customers generating more than $1 million of ARR, an 18% year-over-year increase. Customers generating more than $100,000 of ARR reached 4,003, up 19% from the prior-year period. Total ARR increased 25% year over year to $3.5 billion.
The company mentioned that newer offerings delivered just over 30% of new ACV in the quarter, and the ARR tied to those offerings more than doubled from the year-ago period, supporting broader platform adoption. Management highlighted record $1 million-plus new ACV deals in the quarter, pointing to continued success in securing larger, multi-year engagements and expanding relationships across its Zero Trust Exchange offerings.
Profitability improved as operating discipline offset investment needs. Non-GAAP gross margin was 80.7% compared with 80.3% a year ago, reflecting the company’s high-margin subscription model.
Non-GAAP operating income increased 34% year over year to $195.8 million. The non-GAAP operating margin expanded 140 basis points to 23%, with management citing leverage in sales and marketing as a key contributor.
Zscaler’s Balance Sheet & Cash FlowAs of April 30, 2026, Zscaler had $3.5 billion in cash, cash equivalents and short-term investments compared with $3.5 billion as of Jan. 31, 2026, and $1.7 billion of debt. Management also pointed to higher capital expenditures as a factor in its updated cash flow outlook.
The company generated operating and free cash flows of $198 million and $136 million, respectively, during the fiscal third quarter.
Zscaler's Guidance for FY26For the fourth quarter of fiscal 2026, Zscaler expects revenues of $875-$878 million.
Non-GAAP earnings per share are projected between $1.08 and $1.09.
For fiscal 2026, management forecasts its revenue outlook in the range of $3.3295 billion to $3.3325 billion, reflecting year-over-year growth of 24.6% to 24.7%.
Non-GAAP earnings per share for fiscal 2026 are expected in the band of $4.10-$4.11.
How Have Estimates Been Moving Since Then?Since the earnings release, investors have witnessed a upward trend in estimates revision.
The consensus estimate has shifted 531.25% due to these changes.
VGM ScoresCurrently, Zscaler has a average Growth Score of C, a score with the same score on the momentum front. However, the stock has a score of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
OutlookEstimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Zscaler has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Zscaler uvádí, že program Z-Flex ve 3. čtvrtletí přinesl přes 480 mil. USD v TCV, což je oproti předchozímu čtvrtletí o více než 60 % více. ARR vzrostly o 25 % na více než 3,5 mld. USD.
Key Takeaways Z-Flex generated more than $480M in TCV in Q3, rising more than 60% sequentially for Zscaler.Zscaler saw ARR rise 25% YoY to over $3.5B, while remaining performance obligations grew 30% to $6.5B.Z-Flex helped large clients increase spending by adding new modules, like AI Protect and Zero Trust Branch. Zscaler Inc.’s (ZS - Free Report) Z-Flex program is emerging as an important growth driver for the company. The offering allows customers to make multi-year commitments while giving them the flexibility to activate or switch products without going through a new purchasing process. This approach is helping Zscaler increase customer spending, improve visibility and strengthen long-term relationships.
The momentum behind Z-Flex accelerated during the third quarter of fiscal 2026. Z-Flex generated more than $480 million in the total contract value (TCV) during the quarter, representing growth of more than 60% sequentially. Over the last 12 months, Zscaler delivered more than $1 billion in Z-Flex TCV with an average contract duration of four years.
The program is also encouraging broader platform adoption. Several large customers expanded their use of existing products while adding new modules, including AI Protect and Zero Trust Branch solutions. During the last earnings call, management revealed that one large financial customer increased annual spending by nearly 50%, while another enterprise customer expanded its spending by 60%.
The strong uptake of Z-Flex is contributing to Zscaler’s overall growth. During the third quarter, annual recurring revenues (ARR) rose 25% year over year to more than $3.5 billion. Remaining performance obligations increased roughly 30% to $6.5 billion, providing strong revenue visibility. Total third-quarter revenues rose 25% year over year to $850.4 million.
Management believes Z-Flex shortens sales cycles, increases upselling opportunities and improves customer retention. As enterprises continue consolidating cybersecurity vendors and adopting broader Zero Trust platforms, Z-Flex could remain a meaningful catalyst for Zscaler’s long-term growth and revenue expansion. The Zacks Consensus Estimate for Zscaler’s fiscal 2026 revenues is pegged at $3.33 billion, indicating 24.6% year-over-year growth.
How Do ZS’ Rivals Compare in Flexible Customer Contracts?Two major cybersecurity companies competing with Zscaler in long-term customer engagements are Palo Alto Networks, Inc. (PANW - Free Report) and CrowdStrike Holdings, Inc. (CRWD - Free Report) .
Palo Alto Networks has successfully pushed its platformization strategy, encouraging customers to consolidate multiple security products under one vendor. In the third quarter of fiscal 2026, the company’s next-generation security ARR jumped 60% year over year to $8.1 billion, reflecting strong customer commitment to multi-product contracts.
Palo Alto Networks’ bundled offerings across network security, cloud security and security operations help improve customer retention and expand spending over time. This strategy shares similarities with Zscaler’s Z-Flex program, which promotes broader platform adoption through multi-year agreements.
CrowdStrike has also benefited from higher customer consolidation trends. The company’s ARR rose 24% year over year to $5.5 billion in the first quarter of fiscal 2027. More customers continue adopting multiple Falcon modules, helping expand contract values and increase retention rates. CrowdStrike’s subscription-based model provides recurring revenue visibility similar to Zscaler’s long-term commitments.
While both competitors, Palo Alto Networks and CrowdStrike, focus on platform expansion, Zscaler’s Z-Flex program offers customers additional flexibility to activate or swap products during contract periods, which strengthens its upselling opportunities and long-term revenue growth.
Zscaler’s Price Performance, Valuation & EstimatesZS shares have plunged 44.8% year to date against the Zacks Security industry’s rise of 43.2%.
Zscaler YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, ZS trades at a forward price-to-sales ratio of 5.22, significantly below the industry’s average of 15.65.
Zscaler Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Zscaler’s fiscal 2026 and 2027 earnings implies year-over-year increases of 25.9% and 10.9%, respectively. Estimates for fiscal 2026 and 2027 have been revised upward over the past 30 days.
Image Source: Zacks Investment Research
Zscaler currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
