Zscaler Surpasses Expectations with Strong Q4 Results, Driven by AI Security and Zero Trust Demand

Zscaler sees annual revenue above estimates on strength in cybersecurity demand

Sept 2 (Reuters) - Zscaler (ZS.O), opens new tab forecast annual revenue above Wall Street estimates on Tuesday, betting on robust demand for its cybersecurity services as businesses upscale infrastructure to accommodate AI, sending its shares up 3% in extended trading. A rise in cybercrime and hacks, coupled with the rapid adoption of generative artificial intelligence, have prompted companies to increase investments in cybersecurity to safeguard their digital infrastructure and sensitive data. Zscaler, which primarily competes in the fast-growing secure access secure edge (SASE) market, closed its $675 million acquisition of Red Canary in early August, expanding its capabilities and positioning itself more competitively in the AI-driven security market. "We are rapidly expanding our AI security portfolio to address the emerging risks of AI models and applications," CEO Jay Chaudhry said in a statement. Zscaler expects fiscal 2026 revenue in the range of $3.27 billion to $3.28 billion, compared with analysts' average estimate of $3.21 billion, according to data compiled by LSEG. For the first quarter, it forecast revenue between $772 million and $774 million, ahead of the estimate of $750.7 million. The company's revenue stood at $719.2 million during the fourth quarter ended July 31, while analysts' estimated $706.9 million. It posted adjusted earnings of 89 cents per share for the quarter, also above expectations of 80 cents. Reporting by Juby Babu in Mexico City; Editing by Shilpi Majumdar Our Standards: The Thomson Reuters Trust Principles., opens new tab

Zscaler tops Wall Street estimates with higher earnings and revenue in fiscal fourth quarter - SiliconANGLE

Zscaler tops Wall Street estimates with higher earnings and revenue in fiscal fourth quarter Shares in Zscaler Inc. were up more than 2% in late trading today after the cloud security company impressed with revenue and earnings beats in its 2025 fiscal fourth quarter. For the quarter that ended on July 31, Zscaler reported adjusted earnings per share of 89 cents, up from 72 cents in the same quarter of last year, on revenue of $719.2 million, up 21% year-over-year. Both figures were ahead of the 81 cents per share and revenue of $707.9 million expected by analysts. Zscaler saw cash flow from operations in the quarter come in at $250.6 million, up from $203.6 million in the fourth quarter of the previous fiscal year. As of the end of July, Zscaler had deferred revenue of $2.448 billion, up 30% year-over-year and the company had $3.5732 billion in cash, cash equivalents and short-term investments on hand. Business highlights in the quarter included an announcement in May that Zscaler had agreed to enter a definitive agreement to acquire managed detection and response firm Red Canary Inc. for an undisclosed sum. The acquisition, which was completed by Aug. 1, brings together Zscaler's zero trust platform with Red Canary's domain expertise in threat detection and response, spanning endpoints, identity, network and cloud workloads. The combination of the technology from the two companies addresses the operator pain points that often lead to missed signals, incomplete threat analysis and increased vulnerability to undetected threats. In June, Zscaler announced a series of product updates designed to help enterprises extend zero-trust security across their distributed environments. The updates included new offerings for securing remote and cloud-native infrastructures, as well as artificial intelligence-powered tools for data classification, threat detection and segmentation. "We had an outstanding Q4, in which we achieved a new milestone of more than $3 billion of annual recurring revenue while achieving our highest ever operating margin for a quarter," said Jay Chaudhry, chairman and chief executive officer of Zscaler, in the company's earnings release. "We believe Zscaler's Zero Trust and AI security solutions are imperative in today's world and are driving robust demand." For its full 2025 fiscal year, Zscaler reported adjusted earnings per share of $3.28, up from $2.60 in fiscal year 2024, on revenue of $2.673 billion, up 23% year-over-year. For its fiscal 2026 first quarter, Zscaler expects adjusted earnings per share of 85 cents to 86 cents on revenue of $772 million to $774 million. The earnings outlook at the midpoint was ahead of the 85 cents per share expected by analysts, while the revenue outlook was healthily ahead of an expected $752 million. For its full fiscal year 2026, the company expected adjusted earnings per share of $3.64 to $3.68 on revenue of $3.265 billion to $3.284 billion. Deepen Desai, chief security officer of Zscaler, spoke with theCUBE, SiliconANGLE Media's livestreaming studio, in August, where he discussed how the company is sharpening its zero trust approach as ransomware threats escalate.

Zscaler Q4 Earnings: Revenue Beat, Strong Guidance, Shares Climb - Zscaler (NASDAQ:ZS)

Zscaler Inc ZS reported financial results for the fourth quarter of fiscal 2025 after the market close on Tuesday. Here's a rundown of the cybersecurity company's report. ZS shares are powering higher after-hours on strong volume. Get the market research here. Q4 Highlights: Zscaler reported fourth-quarter revenue of $719.23 million, beating the consensus estimate of $706.91 million. The company reported fourth-quarter adjusted earnings of 89 cents per share, beating analyst estimates of 80 cents per share, according to Benzinga Pro. Total revenue increased 21% year-over-year as deferred revenue jumped 30% year-over-year to $2.46 billion and calculated billings grew 32% year-over-year to $1.2 billion. Annual recurring revenue grew 22% year-over-year to approximately $3.02 billion. Zscaler generated $250.6 million in cash flow from operations and $171.9 million of free cash flow in the fourth quarter. The company ended the quarter with approximately $3.57 billion in cash, cash equivalents and short-term investments. "We believe Zscaler's Zero Trust and AI security solutions are imperative in today's world and are driving robust demand. We recently delivered AI Guardrails for Public and Private apps, and we are rapidly expanding our AI security portfolio to address the emerging risks of AI models and applications," said Jay Chaudhry, chairman and CEO of Zscaler. What's Next: Zscaler expects first-quarter revenue to be in the range of $772 million to $774 million versus estimates of $750.51 million. The company anticipates first-quarter adjusted earnings of 85 cents to 86 cents per share versus estimates of 84 cents per share. Zscaler expects fiscal 2026 revenue of $3.27 billion to $3.28 billion versus estimates of $2.66 billion. The company anticipates full-year adjusted earnings of $3.64 to $3.68 per share versus estimates of $3.18 per share. Zscaler's management team will further discuss the quarter on an earnings call at 4:30 p.m. ET. ZS Price Action: Zscaler shares were up approximately 52% year-to-date heading into the report. The stock was up 4.08% in after-hours Tuesday, trading at $285.78 at the time of publication, according to Benzinga Pro. Read Next: VIX Jumps 20% As Stocks Slump, Gold Tops Record Highs: What's Moving Markets Tuesday? CrowdStrike Analysts Emphasize Long-Term Strength Of Cybersecurity Platform Photo: Sundry Photography/Shutterstock.com ZSZscaler Inc$285.002.87%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum87.20Growth68.54QualityN/AValue10.83Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Zscaler Just Boosted Zero-Trust Lead -- AI, Red Canary Deal Add Momentum - Zscaler (NASDAQ:ZS)

With cybersecurity threats escalating in frequency and sophistication, the demand for advanced security solutions is reaching new heights. As organizations worldwide prioritize safeguarding their digital assets, companies at the forefront of cybersecurity innovation are poised for significant growth. ZS shares are experiencing downward pressure. See the full story here. Zscaler Inc ZS is strengthening its position in zero-trust with its platformization strategy and in AI with the Red Canary acquisition, according to Morgan Stanley. The Zscaler Analyst: Analyst Meta Marshall upgraded the rating from Equal-Weight to Overweight, while raising the price target from $280 to $320. The Zscaler Thesis: Gartner estimates that 47% of enterprises are set to adopt secure access service edge (SASE) by 2027, up from the current 14%, which would be "a huge catalyst for the space," Marshall said in the upgrade note. Check out other analyst stock ratings. Zscaler is a market leader, with a 32% share in the zero-trust network access (ZTNA) market, which is critical to the SASE market, and this positions the company to "continue growing wallet share," he added. The Red Canary acquisition, which closed on Aug. 1, helps Zscaler enter the Managed Detection and Response (MDR) market, "which is set to see meaningful growth as enterprises try to automate the Security Operations Center (SOC) against a growing number of more advanced threats with AI," the analyst wrote. This is likely to be a growing investment area going forward, he added. Although the stock is up 50% year-to-date, it trades roughly in line with Zscaler's security peers, even though the company enjoys better positioning and growth opportunities, Marshall stated. ZS Price Action: Zscaler shares were down 1.31% at $273.42 at the time of publication on Tuesday. The stock is trading within its 52-week range of $153.44 to $318.45, according to Benzinga Pro data. Read Next: CrowdStrike Analysts Emphasize Long-Term Strength Of Cybersecurity Platform Photo: Sundry Photography/Shutterstock ZSZscaler Inc$274.78-0.82%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum87.20Growth68.54QualityN/AValue10.83Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Zscaler CEO Says 'We've Entered An Era of Omnipresent AI' As AI Security, Zero Trust, Data Protection Cross $1 Billion In ARR - Zscaler (NASDAQ:ZS)

Cybersecurity company Zscaler Inc. ZS announced during its fourth quarter results that its three strategic growth vectors, AI Security, Zero Trust Everywhere, and Data Security Everywhere, have collectively surpassed $1 billion in annual recurring revenue. The Era of Omnipresent AI The company's CEO, Jay Chaudhry, opened the company's earnings call on Tuesday by stating, "We have entered an era of omnipresent AI, which is fundamentally transforming enterprises and is leading to an explosive growth of AI ML traffic." According to Zscaler's internal data, AI and machine learning transactions on the company's cloud platform surged 3,500% year-over-year, reflecting unprecedented demand for AI-centric cybersecurity solutions, with new innovations such as agentic AI creating significant security complications. See Also: Palo Alto Investigates Data Theft After Hackers Exploit Stolen OAuth Tokens The company launched AI Guard and expanded its AgentIQ suite to meet emerging threats like model jailbreaking, prompt injection, and agent-to-agent communications. Chaudhry noted, "We're already the leading vendor for Zero Trust communication... agent-to-agent communication is a natural extension of our proven Zero Trust platform." With a total ARR of over $3 billion, Chaudhry says Zscaler is positioning itself to scale across what he calls a "large $100 billion security market." Earnings Beat And Guidance Raised Zscaler released its fourth-quarter results on Tuesday, reporting $719.23 million, up 21% year-over-year, and ahead of consensus estimates at $706.91 million. Profits during the quarter stood at $0.89 per share, beating analyst estimates of $0.80. The company expects its first-quarter revenue to be in the range of $772 million to $774 million, against estimates of $750.51 million. Shares of Zscaler were down 0.90% on Tuesday, closing at $274.57, but are up 1.85% after hours following the company's earnings announcement. The stock scores high on Momentum and Growth in Benzinga's Edge Stock Rankings, with a favorable price trend in the Medium and Long Terms. Click here for deeper insights into the stock. Read More: CrowdStrike Analysts Emphasize Long-Term Strength Of Cybersecurity Platform Photo courtesy: Sundry Photography/Shutterstock ZSZscaler Inc$278.791.54%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum86.21Growth68.98QualityN/AValue11.11Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

What's Going On With Zscaler Shares Wednesday? - Zscaler (NASDAQ:ZS)

Zscaler, Inc. ZS shares are trading lower Wednesday. The company reported fourth-quarter results after the market close on Tuesday. What To Know: Zscaler reported fourth-quarter adjusted earnings per share of 89 cents, beating the consensus estimate of 80 cents. The cybersecurity company reported revenue of $719.22 million, beating the consensus estimate of $706.90 million. Zscaler ended the quarter with annual recurring revenue above $3 billion for the first time. The company reported cash from operations of $250.6 million, up from $203.6 million in the prior year, and free cash flow of $171.9 million. Zscaler said closed its acquisition of Red Canary to strengthen AI-driven threat detection and automation during the quarter. The company also rolled out new products, including AI Guard and Zscaler Cellular, aimed at expanding its Zero Trust security portfolio and addressing emerging risks tied to AI and connected devices. Zscaler guided for first-quarter adjusted earnings per share of 85 cents to 86 cents, versus the consensus estimate of 84 cents. The company anticipates sales of $772 million to $774 million, versus the consensus estimate of $750.51 million. Zscaler expects full-year 2026 adjusted earnings per share from $3.64 to $3.68, versus the consensus estimate of $3.18. In addition, the company sees sales of $3.26 billion to $3.28 billion, versus the consensus estimate of $2.65 billion. Analyst Changes: Following the company's fourth-quarter earnings report, multiple analysts issued price target adjustments. JPMorgan analyst Brian Essex maintained an Overweight rating on Zscaler and raised the price target from $348 to $351. Barclays analyst Saket Kalia maintained an Overweight rating on Zscaler and raised the price target from $300 to $320. RBC Capital analyst Matthew Hedberg maintained an Outperform rating on Zscaler and raised the price target from $315 to $335. BMO Capital analyst Keith Bachman maintained an Outperform rating on Zscaler and raised the price target from $295 to $315. Scotiabank analyst Patrick Colville maintained a Sector Outperform and loweeds the price target from $360 to $334. UBS analyst Roger Boyd maintained a Buy rating on Zscaler and lowered the price target from $365 to $350. See Also: Google's No Longer Just Search - And Microsoft's Not Sleeping Well ZS Price Action: At the time of publication, Zscaler shares were trading down 2.26% at $268.40, according to data from Benzinga Pro. Image via Shutterstock ZSZscaler Inc$268.44-2.23%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum86.21Growth68.98QualityN/AValue11.11Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Zscaler Revenue Jumps 21% in Fiscal Q4

Zscaler (ZS -0.74%), a cloud security specialist known for its Zero Trust Exchange platform, reported Q4 FY2025 results on September 2, 2025. The company delivered GAAP revenue of $719.2 million, surpassing both its own GAAP revenue guidance ($705 million to $707 million) and analyst expectations. Non-GAAP earnings per share (EPS) hit $0.89, also beating non-GAAP estimates of $0.79 to $0.80. Annual Recurring Revenue (ARR) crossed the $3.0 billion mark for the first time, supported by 23% revenue growth and 22% ARR growth year over year. Free cash flow of $171.9 million was up 26.1% year-over-year, while the non-GAAP operating margin remained stable at 22%. Despite these milestones, Zscaler continued to post a GAAP net loss for the quarter. Overall, the period showed strong business momentum, with robust customer adoption, product innovation in artificial intelligence (AI)-based security, and disciplined financial execution. Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q3 2025 earnings report. Understanding Zscaler's Business and Recent Focus Zscaler (ZS -0.74%) is a cybersecurity company that provides a cloud-based security platform, known as Zero Trust Exchange. Its core offering shifts security away from physical hardware and on-premises appliances to a cloud service that inspects all user and application traffic, no matter where users are located. The Zero Trust model means users and devices are never trusted by default -- every request for access to data or systems must be continually verified. The company processes over 500 billion internet transactions per day, blocking more than 150 million threats. Zscaler has focused on relentless technological innovation, especially integrating artificial intelligence and machine learning into its products. Customer expansion, securing more large enterprises and government clients, and forming new channel partnerships have recently been major parts of its growth strategy. Key success factors include continuous product evolution and high customer retention. Quarterly Highlights and Notable Developments Zscaler delivered higher-than-expected GAAP revenue in Q4 FY2025, up 21% year over year and above the company's own forecast. ARR, which measures the annualized value of all active recurring revenue contracts, grew 22% year over year to $3,015 million. Calculated billings surged 32% year over year, an important metric tracking new and renewal contracts signed during the quarter, highlighting strong demand and successful upselling. Deferred revenue, a measure of contracted sales not yet recognized as revenue, reached $2.47 billion, up 30%. Profitability trends were also encouraging. Non-GAAP EPS climbed 23.6% year over year, while non-GAAP operating margin remained steady despite a sharp increase in research and development (R&D) spending. Free cash flow (non-GAAP) rose to $171.9 million, a 26.1% year-over-year increase. The company reported a GAAP net loss of $17.6 million, slightly wider than the $14.9 million loss in Q4 FY2024, reflecting higher operating costs including significant stock-based compensation expenditures. Product innovation remained central to the period's developments. Zscaler launched new AI-powered security modules, including "AI Guardrails for Public and Private apps." This product is designed to protect and control the use of AI models and data across cloud and private environments, addressing risks from large language models and generative AI. The Zero Trust Exchange platform also received enhancements for securing branch locations, multi-cloud deployments, and devices in industrial environments (IoT/OT). These new releases signal the company's focus on staying at the cutting edge of cybersecurity technology as customer needs evolve. Strategic acquisitions and partnerships played a key role this quarter. This integration strengthens Zscaler's position in security operations, data analytics, and managed services. The Red Canary team and technology are expected to support faster identification and mitigation of cyber threats for enterprise customers. Zscaler also achieved key certifications, such as the U.S. Department of Defense CMMC Level 2 and expanded competencies with Amazon Web Services, opening up new opportunities in the federal, healthcare, and education markets. Outlook and Investor Focus Areas Management provided forward guidance for both the next quarter and full fiscal year 2026. Zscaler expects Q1 FY2026 revenue of $772 million to $774 million. Non-GAAP operating income is projected between $166 million and $168 million, with non-GAAP EPS estimated at $0.85 to $0.86. For FY2026, the company guided for revenue between $3.265 billion and $3.284 billion, ARR of $3.676 billion to $3.698 billion, and non-GAAP EPS between $3.64 and $3.68. Looking forward, investors should keep a close eye on profitability trends, as GAAP net losses and high stock-based compensation are expected to continue as the company scales. The Red Canary acquisition will also be important to watch, as Zscaler integrates new personnel and managed security products while managing any shifts in operating costs. With competition intensifying -- particularly from other vendors investing in AI-based cybersecurity, such as Rubrik and SentinelOne -- Zscaler's ability to deliver differentiated innovation and retain high-value customers will be critical. Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

Zscaler sees annual revenue above estimates on strength in cybersecurity demand

(Reuters) -Zscaler forecast annual revenue above Wall Street estimates on Tuesday, betting on robust demand for its cybersecurity services as businesses upscale infrastructure to accommodate AI, sending its shares up 3% in extended trading. A rise in cybercrime and hacks, coupled with the rapid adoption of generative artificial intelligence, have prompted companies to increase investments in cybersecurity to safeguard their digital infrastructure and sensitive data. Zscaler, which primarily competes in the fast-growing secure access secure edge (SASE) market, closed its $675 million acquisition of Red Canary in early August, expanding its capabilities and positioning itself more competitively in the AI-driven security market. "We are rapidly expanding our AI security portfolio to address the emerging risks of AI models and applications," CEO Jay Chaudhry said in a statement. Zscaler expects fiscal 2026 revenue in the range of $3.27 billion to $3.28 billion, compared with analysts' average estimate of $3.21 billion, according to data compiled by LSEG. For the first quarter, it forecast revenue between $772 million and $774 million, ahead of the estimate of $750.7 million. The company's revenue stood at $719.2 million during the fourth quarter ended July 31, while analysts' estimated $706.9 million. It posted adjusted earnings of 89 cents per share for the quarter, also above expectations of 80 cents. (Reporting by Juby Babu in Mexico City; Editing by Shilpi Majumdar)