Zscaler, Inc. (ZS) — Company Research

Last Updated: 06 Oct 2026

Zscaler, Inc. (NASDAQ: ZS) sells cloud-delivered security. Instead of routing traffic through firewalls and VPN appliances in a company's own data centre, customers send it through the Zscaler Zero Trust Exchange, a network of more than 200 data centres that inspects traffic and connects users, devices, applications and now AI agents directly to what they are allowed to reach. Customers pay subscriptions, usually on multi-year contracts, and the company reports a single operating segment.

FY2026 (the year to 31 Jul 2026) revenue was $3,352.5m, up 25%, or 20% excluding Red Canary, which Zscaler bought on 01 Aug 2025. Annual recurring revenue (ARR) reached $3,771m. The company still made a GAAP net loss of $63.2m, mainly because of $821.9m of stock-based compensation, while non-GAAP diluted EPS rose to $4.21 from $3.28. On 03 Sep 2026 management guided FY2027 revenue to $3,908–3,938m, growth of 16.6–17.5%, and announced a 3% workforce reduction. The shares closed at $201.80 on 05 Oct 2026, a market value of about $32.9bn, and the company holds its Investor Day in New York today.

This refresh draws on Zscaler's quarterly press releases (SEC 8-K exhibits), the FY2026 Form 10-K filed on 03 Sep 2026, SEC XBRL company facts and Form 4 filings, all retrieved on 06 Oct 2026. It replaces the version published on 22 May 2026. Follow the price on ChartsView Live Charts.

1. Company Snapshot

Field	Value
Full name	Zscaler, Inc.
Ticker	ZS (NASDAQ)
Sector	Technology: cloud security (zero trust, secure access service edge, data security and security operations)
CEO / Leadership	Jay Chaudhry (Founder, Chairman and CEO); Kevin Rubin (CFO since May 2025); Adam Geller (Chief Product Officer); Ross Tackett (Chief Revenue Officer from 01 Oct 2026)
Market cap	~$32.9bn (163.05m shares × $201.80 at the 05 Oct 2026 close)
Revenue (FY2026, to 31 Jul 2026)	$3,352.5m (+25% YoY; +20% excluding Red Canary)
Net income (FY2026)	-$63.2m GAAP net loss; GAAP diluted EPS -$0.39; non-GAAP diluted EPS $4.21
Employees	Over 8,700 (FY2026 Form 10-K)
Scale	ARR $3,771m (+25%); about 11,000 customers; 785 customers with ARR above $1m (+18%); remaining performance obligations $7,365.4m at 31 Jul 2026
Fiscal year	Ends 31 July (FY2027 runs to 31 Jul 2027)
Dividend	None

2. Bull Case vs Bear Case

Distilled from the full report below. Factual only, no ratings.

Bull Case

• Growth held up in FY2026: Revenue grew 25% to $3,352.5m and ARR 25% to $3,771m. Q4 FY2026 revenue rose 25% to $898.2m, the same pace as the previous three quarters.
• Record margins: Q4 FY2026 non-GAAP operating margin was a record 24%. FY2027 guidance calls for non-GAAP operating income of $924–932m (about +21%) and non-GAAP EPS of $4.86–4.90, against $4.21 in FY2026.
• Large customers spending more: Customers with ARR above $1m rose 18% to 785, and Zero Trust Everywhere customers passed 950, up from more than 350 a year earlier.
• Security for AI gaining traction: Security for AI bookings grew more than 50% quarter on quarter in Q4. Zscaler launched an Agentic SOC on 09 Sep 2026 and bought SPLX, SquareX and Symmetry Systems during FY2026 to build out AI and data security.
• Net cash balance sheet: Cash and short-term investments of $3,474.2m at 31 Jul 2026 compare with $1,696.4m of 0% convertible notes due 2028.

Bear Case

• Growth slowing: FY2027 revenue guidance of $3,908–3,938m implies 16.6–17.5% growth, and ARR guidance of 16.6–17.4%. Excluding Red Canary, ARR growth was already 20% in FY2026.
• Still loss-making on GAAP: The GAAP operating loss was $133.3m in FY2026. Stock-based compensation of $821.9m equals about 25% of revenue and keeps diluting shareholders.
• Free cash flow squeezed by capex: Capex and capitalised software rose to $350.5m in FY2026, and Q4 free cash flow was only $60.8m, a 7% margin, against $1,129.7m of operating cash flow for the year.
• Sales leadership change: Chief Revenue Officer Mike Rich stepped down on 24 Sep 2026, weeks after a 3% workforce cut, and the shares fell about 8.5% the next day.
• Share price damage: The shares are about 40% below their 52-week high of $336.99 after falling more than 30% in one day on 27 May 2026 on the first FY2027 growth outlook.

3. What Does This Company Actually Do?

Zscaler runs the Zero Trust Exchange, a cloud platform that sits between users, devices and AI agents on one side and the internet, SaaS applications and private applications on the other. It checks every connection against policy, inspects traffic for threats and data leaks, and connects users only to the specific application they are allowed to use rather than to the whole network. The FY2026 10-K groups the products into four areas: Zero Trust SASE (Zscaler Internet Access, Zscaler Private Access, Zero Trust Branch and Cloud, and Zscaler Digital Experience), Security for AI, Data Security, and Agentic Security Operations, which includes Red Canary's managed detection and response.

Zscaler reports a single operating segment and does not split revenue by product. The disclosed revenue categories are by geography:

Segment / category	% of revenue	What it is
United States	53% ($1,791.8m, FY2026)	Largest market, including US federal agencies; ZIA received a provisional IL5 authorisation from the Department of War in 2026
Europe, Middle East and Africa	28% ($923.4m)	Enterprise and public-sector customers across Europe and the Middle East
Asia Pacific	15% ($519.2m)	Customers in Asia and Australasia, including sovereign-cloud deployments
Other	4% ($118.1m)	Remaining regions, mainly the rest of the Americas

Source: FY2026 Form 10-K geographic revenue note. In FY2025 the split was US 51%, EMEA 30%, Asia Pacific 16% and other 3%. Channel partners accounted for 85% of FY2026 revenue.

4. The Business Model

How it makes money. Customers buy subscriptions to the platform, and Zscaler recognises the revenue evenly over the contract term. That makes ARR ($3,771m) and remaining performance obligations ($7,365.4m, about 45% due within twelve months and about 90% within three years) a guide to future revenue. Deferred revenue was $2,925.8m at 31 Jul 2026, up 19%. About 85% of revenue comes through channel partners. Contracts signed under Z-Flex, Zscaler's flexible purchasing programme, reached more than $1.7bn of total contract value in FY2026.

Where the moat sits. Zscaler's advantages are:

• scale: the platform handles more than 750bn transactions a day, which feeds its threat detection;
• a proxy architecture built for the cloud from the start, rather than firewalls adapted to it;
• switching costs once a large company has rebuilt its network and access policies around the platform;
• a base of more than 40% of the Forbes Global 2000 and more than 50% of the Fortune 500;
• more than 950 patents issued or pending.

What changed in 2025–2026. Zscaler has moved beyond secure access into security operations and AI. It bought Red Canary for $651.4m in cash (closed 01 Aug 2025), then SPLX, SquareX and Symmetry Systems, spending $918.1m net on acquisitions in FY2026. In Jul 2025 it issued $1,725.0m of 0% convertible notes due 2028 and repaid its 2025 notes. Capex rose sharply in Q4 FY2026 as the company expanded data-centre capacity. In Sep 2026 it cut about 3% of staff, at an expected cost of $30–33m, and changed its head of sales.

5. Financial Health

Sources: Zscaler quarterly and annual press releases (SEC 8-K exhibits), the FY2026 Form 10-K, and SEC XBRL company facts (data.sec.gov) for revenue, GAAP EPS, convertible notes, cash flow, D&A and operating income. The fiscal year ends 31 July.

Fiscal Year	Revenue ($m)	YoY %	GAAP EPS	Adjusted EPS	Dividend/share	Long-term debt (YE)
FY2022 (to 31 Jul 2022)	$1,090.9m	+62%	-$2.77	$0.69	$0.00	$968.7m
FY2023 (to 31 Jul 2023)	$1,617.0m	+48%	-$1.40	$1.79	$0.00	$1,134.2m
FY2024 (to 31 Jul 2024)	$2,167.8m	+34%	-$0.39	$3.19†	$0.00	$1,142.3m‡
FY2025 (to 31 Jul 2025)	$2,673.1m	+23%	-$0.27	$3.28	$0.00	$1,700.7m
FY2026 (to 31 Jul 2026)	$3,352.5m	+25%	-$0.39	$4.21	$0.00	$1,696.4m

Notes on the annual table:

• Adjusted EPS is Zscaler's non-GAAP diluted EPS as first reported. It excludes stock-based compensation, amortisation of acquired intangibles and other items.
• † In the FY2025 release Zscaler recast FY2024 non-GAAP EPS to $2.60 after adopting a 23% non-GAAP tax rate. From FY2026 the rate is 21%, and FY2025 was not restated.
• Long-term debt is the net carrying value of convertible senior notes (XBRL ConvertibleLongTermNotesPayable and ConvertibleNotesPayableCurrent): the 0.125% notes due 2025 to FY2024, then the $1,725.0m of 0% notes due 2028 issued on 03 Jul 2025.
• ‡ At 31 Jul 2024 the 2025 notes were classified as current because they fell due within a year. They were repaid in FY2025.

Quarterly results (most recent first)

Quarter / Half	Revenue	Adjusted EPS	GAAP EPS
Q4 FY2026 (to 31 Jul 2026)	$898.2m	$1.19	-$0.02
Q3 FY2026 (to 30 Apr 2026)	$850.5m	$1.08	-$0.09
Q2 FY2026 (to 31 Jan 2026)	$815.8m	$1.01	-$0.21
Q1 FY2026 (to 31 Oct 2025)	$788.1m	$0.96	-$0.07
FY2026 total	$3,352.5m	$4.21	-$0.39

Notes on the quarterly table:

• Release dates: Q4 FY2026 on 03 Sep 2026; Q3 on 26 May 2026; Q2 on 26 Feb 2026; Q1 on 25 Nov 2025.
• Q4 FY2026 in more detail:
  • revenue +25% YoY; ARR $3,771m, of which Red Canary $141m;
  • GAAP operating loss $15.5m (-2% margin);
  • non-GAAP operating income $218.4m (24% margin).
• Quarterly non-GAAP EPS sum to $4.24 against the reported $4.21 for the year because the share count changes.

Cash flow and balance sheet.

• Cash flow (FY2026).
  • Operating cash flow was $1,129.7m. Purchases of property and equipment were $277.3m and capitalised internal-use software $73.2m. That gives free cash flow of $779.1m, a 23% margin.
  • D&A was $148.5m (XBRL DepreciationDepletionAndAmortization) and the GAAP operating loss $133.3m. Stock-based compensation was $821.9m.
  • In Q4 alone, operating cash flow was $279.3m and capex plus capitalised software $218.5m, leaving free cash flow of $60.8m.
• Balance sheet at 31 Jul 2026.
  • Cash and cash equivalents were $928.4m and short-term investments $2,545.8m, a total of $3,474.2m.
  • The 0% convertible notes due 2028 were carried at $1,696.4m (principal $1,725.0m; conversion price $439.52). There is no other borrowing.
  • Deferred revenue was $2,925.8m and the accumulated deficit $1,252.7m.
• FY2027 guidance (03 Sep 2026):
  • revenue of $3,908–3,938m (+16.6–17.5%);
  • ARR of $4,396–4,426m (+16.6–17.4%);
  • non-GAAP operating income of $924–932m;
  • non-GAAP EPS of $4.86–4.90 on about 173m diluted shares;
  • free cash flow margin of about 23.0–23.5%;
  • Q1 FY2027 revenue of $935–939m (about +19%) and non-GAAP EPS of $1.15–1.16.

6. Valuation & Market Data

Raw metrics, October 2026. Not opinions on whether the stock is cheap or expensive.

Metric	Value
Market cap	~$32.9bn (163.05m shares × $201.80 at the 05 Oct 2026 close)
Enterprise value	~$31.1bn = market cap ~$32.9bn + total debt ~$1.70bn (convertible notes $1,696.4m, all noncurrent) − cash and short-term investments ~$3.47bn ($928.4m + $2,545.8m), per the 31 Jul 2026 balance sheet
Trailing P/E (GAAP)	n/m: FY2026 GAAP diluted EPS was negative at -$0.39. On FY2026 non-GAAP EPS of $4.21 the multiple is ~47.9x.
P/E (forward)	~41.4x ($201.80 / $4.88, the midpoint of management's FY2027 non-GAAP EPS guidance of $4.86–4.90)
P/S (TTM)	~9.8x (market cap / FY2026 revenue of $3,352.5m, the latest twelve months reported)
EV/EBITDA (TTM)	n/m: GAAP EBITDA is barely positive. FY2026 GAAP operating loss of -$133.3m plus D&A of $148.5m (the wider XBRL DepreciationDepletionAndAmortization total) gives EBITDA of about $15.3m, which would imply a multiple of roughly 2,000x. On non-GAAP operating income of $767.1m, EV is ~40.6x.
P/FCF	~42.2x (market cap ~$32.9bn / FY2026 FCF ~$779.1m). FCF = operating cash flow $1,129.7m − capex $277.3m − capitalised software $73.2m, per the FY2026 cash flow statement.
52-week high	$336.99 (intraday, 03 Nov 2025)
52-week low	$114.62 (intraday, 10 Apr 2026)
Short interest (% of float)	4.82% (6.50m shares, settlement date 15 Sep 2026, per MarketBeat; StockAnalysis puts it at 6.11% on a smaller float estimate)
Days to cover	1.5 (MarketBeat, 15 Sep 2026)
Dividend yield	Nil (no dividend)

Price-based metrics use the 05 Oct 2026 close. The 52-week range is from Yahoo Finance daily bars. For live prices see ChartsView Live Charts.

7. What Are They Building

Security for AI agents.

• Zero Trust Exchange for Agents: Introduced at Zenith Live in Jun 2026 with Endpoint AI Security, it applies zero trust policy to AI agents as well as people. Both are in early access and are expected to scale in the second half of FY2027.
• AI guardrails and red teaming: These come from SPLX, acquired around 31 Oct 2025 for $40.6m in cash plus restricted stock.
• Access governance: Symmetry Systems, acquired on 27 May 2026 for $152.9m in cash, maps which identities and agents can reach which data.

Agentic security operations. The Agentic SOC became generally available on 09 Sep 2026. It combines Zscaler's telemetry, frontier models from Anthropic and OpenAI, and Red Canary's analysts to investigate and contain threats. Zscaler has also joined Anthropic's Project Glasswing and partnered with OpenAI on cyber-security models.

Browser and application protection. SquareX, bought on 05 Feb 2026 for $112.8m in cash, adds security inside the web browser. Autonomous Application Shield, in early access, protects private applications. On 05 Oct 2026 Zscaler said it is working with IBM and Red Hat to combine it with their Lightwell technology.

Investment level. Research and development spending was $903.4m in FY2026, 27% of revenue. Capex rose sharply in Q4 as Zscaler added capacity to its cloud, which now spans more than 200 public data centres.

8. Competitive Landscape

Peer	Market cap (Oct 2026)	Key 2025 metric
Palo Alto Networks (PANW)	~$332.7bn	Q4 FY2026 revenue $3.41bn (+34.5%); next-generation security ARR $9.10bn (+63%) (results reported by 24/7 Wall St, 04 Sep 2026)
CrowdStrike (CRWD)	~$279.2bn	Q2 FY2027 net new ARR $332.8m (+51%); full-year revenue guidance $5.99–6.01bn (24/7 Wall St, 04 Sep 2026)
Fortinet (FTNT)	~$135.1bn	Trailing twelve-month revenue $7.53bn and free cash flow $3.12bn (StockAnalysis)
Cloudflare (NET)	~$128.0bn	Trailing twelve-month revenue $2.51bn (StockAnalysis)
Netskope (NTSK)	~$7.5bn	Trailing twelve-month revenue $802.6m and net loss $737.2m; listed on Nasdaq on 18 Sep 2025 at $19 a share (StockAnalysis, Renaissance Capital)

Market caps are at the 05 Oct 2026 close from Yahoo Finance and StockAnalysis quote pages. Key metrics are the latest reported figures available in Oct 2026.

9. Leadership and Ownership

Jay Chaudhry is Zscaler's founder, Chairman and CEO. He holds 340,186 shares directly and 26,519,261 through a trust, a stake of about 16% of the shares outstanding. Kevin Rubin became CFO in May 2025. Ross Tackett, previously head of worldwide sales, became Chief Revenue Officer on 01 Oct 2026, replacing Mike Rich, who stays on as an adviser until 31 Dec 2026. All insider transactions in 2026 were sales, and many were shares sold to cover tax on vesting awards. There were no open-market purchases.

Name	Date	Type	Shares	Price	Value	Plan Type
Kevin Rubin (CFO)	25 Sep 2026	Sale	519	~$197.28 (avg)	~$0.10m	10b5-1 (adopted 24 Mar 2026)
Robert Schlossman (Chief Legal Officer)	21 Sep 2026	Sale	5,394	$200.00	~$1.08m	10b5-1 (adopted 03 Jul 2025)
Adam Geller (Chief Product Officer)	17 Sep 2026	Sale	4,584	$192.01	~$0.88m	10b5-1 (adopted 20 Mar 2026)
Jay Chaudhry (CEO and Chairman)	16 Sep 2026	Sale (tax cover on vesting)	2,852	$192.76	~$0.55m	Sell-to-cover, not discretionary
Kevin Rubin (CFO)	16 Sep 2026	Sale (tax cover on vesting)	5,957	$192.76	~$1.15m	Sell-to-cover, not discretionary
Adam Geller (Chief Product Officer)	16 Sep 2026	Sale (tax cover on vesting)	5,578	$192.76	~$1.08m	Sell-to-cover, not discretionary
Mike Rich (then CRO)	16 Sep 2026	Sale	4,108	$192.76	~$0.79m	Not verified (same-day price as tax-cover sales)
Jay Chaudhry (CEO and Chairman)	17 Mar 2026	Sale	1,941	$156.59	~$0.30m	Not verified

Sources: SEC Form 4 filings on EDGAR, listed via OpenInsider. Similar sell-to-cover sales took place on 16 Jun 2026 at $126.43, and director James Beer made small sales in Jan, Mar, Jun and Sep 2026. At the 12 Jan 2026 annual meeting a non-binding shareholder proposal to declassify the board passed by 67.0m votes to 63.2m.

10. Risks and Challenges

• Growth slowdown (Operational): FY2027 guidance implies revenue growth of 16.6–17.5%, down from 25% in FY2026, which was helped by the Red Canary acquisition. A further slowdown would weigh on a valuation that rests on growth.
• Competition (Competitive): Palo Alto Networks, CrowdStrike, Fortinet, Cloudflare, Netskope and Microsoft all sell overlapping secure access and security operations products, and several are growing faster. Bundling by larger platforms can pressure pricing.
• Sales execution (Operational): The Chief Revenue Officer changed on 01 Oct 2026, after a 3% workforce reduction approved on 01 Sep 2026 and the earlier departure of the head of corporate strategy. Disruption to the sales force could hit bookings.
• Losses and dilution (Financial): Zscaler has never made a GAAP profit for a full year in the period shown, with an accumulated deficit of $1,252.7m. Stock-based compensation was $821.9m in FY2026, and shares outstanding rose about 3.8% over the past year (StockAnalysis), with no buyback programme to offset it.
• Capex and free cash flow (Financial): Capex and capitalised software rose to $350.5m in FY2026, and Q4 free cash flow margin fell to 7%. Continued heavy data-centre spending would hold back cash generation.
• Security incidents and outages (Operational): As a security provider in the path of customers' traffic, a breach of the platform or a large outage could cause serious reputational and financial damage.
• Channel and macro exposure (Macro): 85% of revenue comes through partners, and the 10-K flags geopolitical risks, including Russia and Ukraine and the Middle East, as well as risks from the company's large operations in India.

11. Recent Developments

• 05 Oct 2026 — IBM and Red Hat collaboration. Zscaler said it will combine its Autonomous Application Shield, now in early access, with IBM and Red Hat's Lightwell to protect private applications from AI-powered attacks.
• 30 Sep 2026 — Ransomware report. Zscaler's ThreatLabz published its 2026 ransomware report, saying attackers using AI are moving to large-scale data theft, executive targeting and multi-million-dollar extortion.
• 24 Sep 2026 — Chief Revenue Officer change. Ross Tackett was named CRO from 01 Oct 2026, replacing Mike Rich, who stepped down for personal reasons. The shares fell about 8.5% on 25 Sep.
• 23 Sep 2026 — Investor Day announced. Zscaler said it would host an Investor Day in New York on 06 Oct 2026 to set out its strategy, long-term growth drivers and financial outlook.
• 14 Sep 2026 — Shares jump 15%. The stock rose 15.0% to $189.15. Zscaler made no announcement that day, and the report of the move did not give a cause.
• 09 Sep 2026 — Agentic SOC launched. Zscaler made its AI-driven security operations service generally available, using Anthropic and OpenAI models alongside Red Canary's analysts.
• 03 Sep 2026 — Q4 FY2026 results and FY2027 outlook. Revenue rose 25% to $898.2m and non-GAAP EPS was $1.19, against $0.89 a year earlier. FY2027 revenue guidance of +16.6–17.5% and a 3% workforce reduction were also announced, and the shares fell about 4–5% to around $170 the next day.
• 27 May 2026 — Record one-day fall. The shares fell more than 30% after Q3 FY2026 results, when management first indicated FY2027 ARR growth of 16–17%.

12. Key Dates Coming Up

• 06 Oct 2026 — Investor Day in New York from 8:30am ET, covering strategy, long-term growth drivers and the financial outlook. Any new long-term targets will be published on the Zscaler investor relations site.
• Expected 24 Nov 2026 — Q1 FY2027 results after the US market close. The date comes from market calendars and Zscaler has not confirmed it; Q1 FY2026 was reported on 25 Nov 2025. Guidance is revenue of $935–939m and non-GAAP EPS of $1.15–1.16.
• 31 Dec 2026 — Mike Rich's advisory role ends, completing the sales leadership handover.
• Expected Jan 2027 — Annual meeting of stockholders; the 2026 meeting was held on 12 Jan 2026.
• Expected Feb 2027 — Q2 FY2027 results; Q2 FY2026 results came on 26 Feb 2026.
• 31 Jul 2027 — FY2027 year-end. Guidance is revenue of $3,908–3,938m and ARR of $4,396–4,426m.

Macro events are on the ChartsView Economic Calendar, and you can discuss Zscaler on the ChartsView Forum.

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