Zscaler Reports Strong Financial Results for Fiscal Fourth Quarter and Year 2026

Zscaler, the leader in cloud security, reported strong financial results for its fiscal fourth quarter and fiscal year 2026, with revenue and annual recurring revenue (ARR) both growing 25% year over year.

CEO and Founder Jay Chaudhry said, "AI represents a significant opportunity for Zscaler. By directly connecting users, workloads, branches, and now agents to the applications they need, we are uniquely positioned to help companies combat threats from agentic AI and securely deploy AI agents and models."

The company's financial highlights for the fourth quarter and fiscal year 2026 include:

- Revenue of $898.2 million, up 25% year over year. - ARR of $3,771 million, also up 25% year over year, with net new ARR growing 24%. - Non-GAAP operating margin reaching a record 24%. - Cash provided by operations of $279.3 million, or 31% of revenue. - Deferred revenue grew 19% year over year to $2,926 million as of July 31, 2026.

Kevin Rubin, Zscaler's chief financial officer, noted, "We delivered strong fourth-quarter growth, with both revenue and ARR increasing 25% year over year. Non-seat-based solutions continue to contribute significantly, and we saw record large-deal activity and improving sales productivity."

For the full fiscal year 2026, the financial results were:

- Revenue of $3,353 million, up 25% year over year. - ARR of $3,771 million, up 25% year over year. - Non-GAAP operating income of $767.1 million, or 23% of revenue. - Free cash flow of $779.1 million, or 23% of revenue.

Zscaler provided guidance for the first quarter and full year of fiscal 2027:

- 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, or 25% to 26% year-over-year growth. - Non-GAAP net income per share of $1.15 to $1.16, assuming 170 million fully diluted shares outstanding and a non-GAAP tax rate of 21%.

For the full fiscal year 2027, the outlook includes:

- 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 income from operations of $924 million to $932 million, or 21% year-over-year growth. - Non-GAAP net income per share of $4.86 to $4.90, assuming 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%.

Chaudhry added, "We are well-positioned to continue our growth trajectory in the coming quarters, driven by our strong product offerings and market demand for our Zero Trust Exchange platform."

Zscaler will host a conference call today at 1:30 p.m. Pacific time (4:30 p.m. Eastern time) to discuss these results and provide further guidance.

Zscaler (NASDAQ: ZS) is committed to accelerating digital transformation and ensuring security for its customers. The Zscaler Zero Trust Exchange platform is designed to protect against cyberattacks and data loss by securely connecting users, devices, and applications in any location.

Zscaler™ and other trademarks mentioned at https://www.zscaler.com/legal/trademarks are either registered trademarks or service marks of Zscaler, Inc. in the United States and/or other countries.

Conference Call Information: - Date: Today - Time: 1:30 p.m. Pacific time (4:30 p.m. Eastern time) - Dial-in: [insert dial-in details]

Forward-Looking Statements: This press release contains forward-looking statements that involve risks and uncertainties. Zscaler does not assume any obligation to update these statements.

Use of Non-GAAP Financial Information: Non