Zscaler Inc NASDAQ:ZS Price, Chart, News & Insight

Zscaler Stock Falls 3.3% Premarket as FY2027 Outlook Points to Slower Growth

Zscaler (NASDAQ: ZS) shares fell about 3.3% in premarket trading Friday despite reporting strong fiscal fourth-quarter results, as investors focused on guidance pointing to slower growth in fiscal 2027.

Fourth-quarter revenue rose 25% year over year to $898.2 million, while annual recurring revenue (ARR) increased 25% to $3.77 billion. Excluding the Red Canary acquisition, ARR grew 20%.

Profitability also improved. Non-GAAP operating income reached $218.4 million, producing a record 24% operating margin, while adjusted EPS increased to $1.19 from $0.89 a year earlier.

One weaker area was cash generation. Quarterly free cash flow dropped to $60.8 million from $171.9 million a year earlier, largely reflecting higher capital expenditures and internal-use software investment.

FY2027 Growth Outlook Weighs on Shares

The stock's decline appears primarily tied to Zscaler's forward outlook. For fiscal 2027, the company expects revenue of $3.91 billion to $3.94 billion, representing growth of 16.6% to 17.5%. ARR is projected to increase by roughly 16.6% to 17.4%.

That represents a substantial deceleration from the 25% headline revenue and ARR growth reported for fiscal 2026.

Zscaler nevertheless remains strongly positioned within the cloud cybersecurity and Zero Trust market. Management sees artificial intelligence as a major growth opportunity, with investments spanning Zero Trust SASE, Agentic SecOps, data security and security for AI.

The 3.3% premarket decline therefore appears less about weak quarterly execution and more about expectations for slower growth ahead. Investors will be watching whether Zscaler's expanding AI-security portfolio can sustain growth while the company continues improving profitability.

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WS Investor 09-04-26

Zscaler Expands Carahsoft Partnership to Target SMB and Mid-Market Cybersecurity Demand

Zscaler (NASDAQ: ZS) announced an expanded partnership with Carahsoft Technology on Tuesday aimed at bringing its enterprise-grade Zero Trust security platform to more small and medium-sized businesses and mid-market customers in the U.S.

The partnership will extend the reach of Zscaler’s Zero Trust Exchange through Carahsoft’s reseller and distribution network, with simplified pricing, standardized security packages and faster deployment designed specifically for smaller organizations.

Zscaler Targets an Underserved Cybersecurity Market

The initiative represents an effort by Zscaler to expand beyond its traditional large-enterprise customer base. SMB and mid-market companies increasingly face ransomware, phishing and identity-based attacks similar to those targeting large corporations, but typically operate with smaller cybersecurity teams and tighter IT budgets.

Under the expanded partnership, Zscaler will offer curated Zero Trust Exchange bundles and deployment accelerators intended to reduce implementation complexity. Pricing and packaging will also be adjusted to provide more predictable costs, while Carahsoft's reseller ecosystem will support procurement and deployment.

The companies will additionally provide partners with standardized onboarding processes, reference architectures and co-selling programs designed to accelerate customer acquisition.

Expanding the Addressable Market for Zero Trust

For Zscaler, the partnership could broaden the addressable market for its cloud security platform by making its technology more accessible to organizations that may previously have considered enterprise Zero Trust deployments too complex or expensive.

Zscaler's cloud-native Zero Trust Exchange replaces traditional appliance-based security architectures by connecting users, devices and applications without relying on implicit network trust. The platform currently operates across more than 160 public exchanges globally, alongside thousands of private exchanges at the edge.

The expanded Carahsoft relationship is therefore primarily a distribution and market-expansion initiative rather than a new product launch. By simplifying deployment and pricing while leveraging an established reseller network, Zscaler is seeking to capture cybersecurity spending from the large SMB and mid-market segment as demand for cloud-based security continues to grow.

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European Investor 08-18-26

ZS plunged nearly 31% after investors reacted harshly to the company’s fiscal third-quarter 2026 earnings report, despite the cybersecurity firm delivering strong headline growth and raising full-year guidance.

The sharp selloff appeared driven not by weak current results, but by concerns over slowing free cash flow margins, rising infrastructure spending and investor fears that expectations for the AI cybersecurity leader had become too elevated following its massive rally over the past year.

Zscaler reported third-quarter revenue of $850.5 million, up 25% year over year, while annual recurring revenue (ARR) also climbed 25% to $3.53 billion. The company highlighted record profitability, with non-GAAP operating margin reaching an all-time high of 23%. Non-GAAP earnings per share rose to $1.08 from $0.84 a year earlier.

Management emphasized that demand remains strong as enterprises increasingly adopt AI-driven security architectures. CEO Jay Chaudhry said Zscaler’s Zero Trust platform is “ideally positioned as the cybersecurity platform for the AI era,” while the company announced multiple AI-related initiatives, including partnerships with OpenAI, Anthropic and Singtel, alongside the planned acquisition of Symmetry Systems to strengthen AI agent security capabilities.

However, investors focused on several softer aspects beneath the strong top-line numbers. Operating cash flow declined year over year to $198 million from $211 million, while the company sharply lowered its full-year free cash flow margin forecast to 22.8%-23.3%, down from previous guidance of 26.5%-27%. Management said the reduction reflects rising capital expenditures tied to infrastructure expansion and long-term AI investments.

The market may also have reacted negatively to decelerating organic ARR growth. Excluding the Red Canary acquisition, ARR growth was 21%, below the reported 25% figure, potentially reinforcing concerns that underlying growth momentum is moderating as the company scales.

Despite the dramatic decline, Zscaler actually raised nearly every major full-year forecast metric. The company increased revenue guidance to as much as $3.3325 billion, lifted operating income expectations and boosted projected earnings per share to $4.10-$4.11.

The selloff suggests investors are reassessing valuation levels and future profitability assumptions rather than reacting to operational weakness. With AI-related cybersecurity spending becoming increasingly competitive and infrastructure-intensive, the market appears concerned that Zscaler’s next phase of growth may come with lower cash generation and higher execution risks than previously expected.

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Global Finance News 05-27-26

Zscaler announced a major expansion of its data sovereignty capabilities through its Zscaler Zero Trust Exchange, aimed at helping global organizations comply with local data regulations while maintaining secure cross-border operations.

The expansion includes new regional deployments and enhanced local control planes that allow enterprises to manage sensitive data within specific jurisdictions without sacrificing performance or security. Zscaler currently operates more than 160 data centers worldwide and uses a decentralized architecture separating control, data and logging planes to ensure that sensitive information remains within required geographic boundaries.

New features include in-region SSL inspection and malware analysis, enabling encrypted traffic to be inspected locally without transferring sensitive data outside the country. The company also introduced certified on-premises deployment options through Private Service Edges and regional support teams to assist organizations with national regulatory requirements.

Zscaler said the platform also supports stronger compliance capabilities such as customer-controlled encryption keys using hardware security modules, flexible regional logging options and a unified compliance framework designed to help organizations meet regulations including General Data Protection Regulation and NIS2 Directive.

The company added that its security cloud infrastructure is fully owned and operated by Zscaler, helping ensure service resilience and reducing the risk that outages at individual data centers could disrupt global operations.
Globe Newswire

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European Investor 03-12-26

Zscaler, Inc. reported strong second-quarter fiscal 2026 results, with revenue rising 26% year over year to $815.8 million and annual recurring revenue (ARR) increasing 25% to $3.36 billion, exceeding the high end of guidance.

Operating cash flow grew 14% to $204.1 million, while free cash flow rose 18% to $169.1 million. Non-GAAP operating income reached $181.0 million, or 22% of revenue, and non-GAAP net income per share climbed to $1.01 from $0.78 a year earlier. GAAP net loss totaled $34.3 million. ARR growth was 21% excluding contributions from the Red Canary acquisition.

The company raised its full-year fiscal 2026 ARR guidance to growth of 24%, now expected at $3.73 billion to $3.75 billion, and increased its revenue and profitability outlook. Zscaler highlighted continued demand across AI Security, Zero Trust Everywhere and Data Security, alongside recent acquisitions and global infrastructure expansion.

Source: Globe Newswire, February 26, 2026.

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Global Finance News 02-28-26

Zscaler, Inc. (NASDAQ: ZS) will release second quarter fiscal year 2026 earnings after the market closes on Thursday, February 26, 2026. The company will host an investor conference call at 1:30 p.m. Pacific time.

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WS Investor 02-06-26

Zscaler announced a series of new AI security innovations designed to help enterprises securely adopt generative and agentic AI at scale. The new Zscaler AI Security Suite aims to provide organizations with full visibility, control and governance across AI applications, models, agents and infrastructure, addressing growing risks such as data loss and cyberattacks that traditional security tools cannot manage.

The company said the new capabilities enable enterprises to inventory their AI footprint, securely control access to sanctioned AI services using Zero Trust principles, and protect AI infrastructure throughout the development lifecycle. Zscaler also highlighted new governance support aligned with frameworks such as the NIST AI Risk Management Framework and the EU AI Act, alongside integrations with major AI and cloud providers to accelerate secure AI adoption.

Source: GlobeNewswire

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WS Investor 01-27-26

Zscaler has been named AWS Marketplace Partner of the Year (North America) at AWS re:Invent 2025, recognizing its significant growth and impact within the AWS ecosystem. The award highlights Zscaler’s strong co-selling and co-innovation efforts with AWS, which helped the companies surpass $1 billion in AWS Marketplace sales. Zscaler’s Zero Trust security solutions are increasingly used to secure cloud migrations, AI workloads, and enterprise applications on AWS. Company executives said the recognition reflects customers’ trust in Zscaler to secure critical workloads and support rapid AI-driven innovation. AWS noted that winners were selected through a combination of self-nomination and data-driven evaluation by third-party firm Canalys.

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European Investor 12-02-25

Zscaler joins Microsoft’s new Entra Agent ID ecosystem

Zscaler announced it has been selected as an early adoption partner for Microsoft Entra Agent ID, a new identity framework designed to manage and secure AI agents. Zscaler will help test and shape the platform, integrating with Microsoft’s Agent Registry, Agent ID, and Agent Directory to support secure onboarding, governance, and lifecycle management of enterprise AI agents.

Zscaler says the collaboration will extend Zero Trust protections to AI workflows by ensuring all agent requests are authenticated and governed. Microsoft noted that Agent ID gives AI agents first-class identities with enterprise-grade governance, enabling safer deployment of agentic systems across organizations.

The partnership will allow customers to manage agents with consistent security policies across users, applications and AI systems, reducing operational complexity while supporting compliant AI adoption.

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Global Finance News 11-19-25

Zscaler to Report Q1 FY2026 Earnings on November 25

Zscaler (NASDAQ: ZS) announced it will release first-quarter fiscal 2026 financial results after market close on Tuesday, November 25, 2025. The company will host an investor conference call at 1:30 p.m. PT (4:30 p.m. ET) to discuss the results.

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The Investor 11-06-25

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