Zscaler (NASDAQ:ZS) Posts Quarterly Earnings Results, Beats Expectations By $0.10 EPS

Posted by on Sep 3rd, 2026

Zscaler (NASDAQ:ZS – Get Free Report) released its quarterly earnings data on Thursday. The company reported $1.19 earnings per share for the quarter, topping analysts’ consensus estimates of $1.09 by $0.10, Briefing.com reports. Zscaler had a negative net margin of 2.44% and a negative return on equity of 0.37%. The firm had revenue of $898.19 million for the quarter, compared to analyst estimates of $876.96 million. During the same quarter in the prior year, the business earned $0.89 earnings per share. The business’s quarterly revenue was up 24.9% compared to the same quarter last year. Zscaler updated its FY 2027 guidance to 4.860-4.900 EPS and its Q1 2027 guidance to 1.150-1.160 EPS.

Here are the key takeaways from Zscaler’s conference call:

  • Zscaler reported a strong fiscal 2026 finish, with revenue and ARR each up 25%, net new ARR up 24%, and a record 24.3% non-GAAP operating margin. Excluding Red Canary, Q4 net new ARR growth accelerated to 17% year over year.
  • AI security is emerging as a major growth driver: Security for AI bookings rose more than 50% sequentially, its pipeline increased 75%, and 70% of those deals included data security. Zscaler also cited multiple seven-figure wins and expects its Agentic SecOps offering to begin contributing in the second half of fiscal 2027.
  • Platform expansion is broadening the growth engine beyond user-based products. Non-seat-based offerings represented approximately 30% of new and upsell ACV in Q4 and fiscal 2026, while Zero Trust Everywhere customers increased to more than 950 from over 700 in the prior quarter.
  • Fiscal 2027 guidance implies a notable growth slowdown, with ARR and revenue growth expected at approximately 17%, versus 25% growth in fiscal 2026. Management attributed the conservative outlook partly to sales-leadership transitions and the time required for the integrated SecOps offering to ramp.
  • Red Canary experienced elevated, traditionally higher MDR churn during fiscal 2026, and management expects continued higher churn on renewals while forecasting no net new ARR contribution from the business in fiscal 2027. Capital expenditures are also expected to remain elevated due to higher prices for memory, storage, and processors, while a workforce restructuring affecting about 3% of employees will incur $30 million to $33 million in charges.

Zscaler Price Performance

ZS traded down $8.00 during trading on Friday, hitting $169.80. The company’s stock had a trading volume of 7,688,022 shares, compared to its average volume of 3,370,529. The firm has a market capitalization of $27.46 billion, a price-to-earnings ratio of -353.74, a P/E/G ratio of 101.67 and a beta of 0.95. Zscaler has a twelve month low of $114.63 and a twelve month high of $336.99. The business’s fifty day simple moving average is $160.51 and its 200 day simple moving average is $150.39. The company has a current ratio of 1.86, a quick ratio of 1.86 and a debt-to-equity ratio of 0.72.

Insiders Place Their Bets

In other news, insider Adam Geller sold 2,817 shares of the stock in a transaction that occurred on 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 trade represents a 6.24% decrease in their position. The sale was disclosed in a filing with the SEC, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Kevin Rubin sold 3,000 shares of the business’s stock in a transaction on Thursday, June 25th. The stock was sold at an average price of $124.22, for a total transaction of $372,660.00. Following the completion of the sale, the chief financial officer directly owned 41,901 shares of the company’s stock, valued at approximately $5,204,942.22. The trade was a 6.68% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders sold 16,772 shares of company stock valued at $2,139,799. Corporate insiders own 17.20% of the company’s stock.

Institutional Trading of Zscaler

A number of institutional investors and hedge funds have recently modified their holdings of ZS. Sunbelt Securities Inc. boosted its holdings in Zscaler by 92.9% in the 4th quarter. Sunbelt Securities Inc. now owns 3,755 shares of the company’s stock worth $845,000 after buying an additional 1,808 shares during the last quarter. Kovitz Investment Group Partners LLC raised its holdings in shares of Zscaler by 618.0% during the fourth quarter. Kovitz Investment Group Partners LLC now owns 6,785 shares of the company’s stock valued at $1,526,000 after acquiring an additional 5,840 shares during the last quarter. Mcguire Capital Advisors Inc. acquired a new position in shares of Zscaler during the fourth quarter valued at approximately $32,000. Invesco Ltd. lifted its position in shares of Zscaler by 13.8% in the fourth quarter. Invesco Ltd. now owns 1,469,657 shares of the company’s stock valued at $330,555,000 after acquiring an additional 178,692 shares in the last quarter. Finally, Corient Private Wealth LLC lifted its position in shares of Zscaler by 70.4% in the fourth quarter. Corient Private Wealth LLC now owns 53,981 shares of the company’s stock valued at $12,141,000 after acquiring an additional 22,299 shares in the last quarter. Hedge funds and other institutional investors own 46.45% of the company’s stock.

Analysts Set New Price Targets

Several equities research analysts have commented on the stock. Cantor Fitzgerald reaffirmed an “overweight” rating and issued a $225.00 price target on shares of Zscaler in a report on Friday. Weiss Ratings raised Zscaler from a “sell (e+)” rating to a “sell (d-)” rating in a report on Thursday, August 27th. Piper Sandler boosted their price target on Zscaler from $160.00 to $175.00 and gave the company a “neutral” rating in a report on Friday. Truist Financial set a $210.00 price objective on Zscaler in a research report on Wednesday, May 27th. Finally, Morgan Stanley raised their price objective on shares of Zscaler from $145.00 to $165.00 and gave the stock an “equal weight” rating in a research note on Friday. Thirty-four equities research analysts have rated the stock with a Buy rating, six have assigned a Hold rating and one has given a Sell rating to the stock. According to MarketBeat, Zscaler currently has a consensus rating of “Moderate Buy” and an average target price of $217.08.

Check Out Our Latest Stock Analysis on Zscaler

Key Headlines Impacting Zscaler

Here are the key news stories impacting Zscaler this week:

  • Positive Sentiment: Zscaler reported adjusted EPS of $1.19 versus the $1.09 consensus estimate and revenue of $898.2 million versus $877.0 million expected. Revenue increased 24.9% year over year, marking the company’s tenth consecutive earnings beat. Zscaler Q4 Earnings Beat Estimates
  • Positive Sentiment: Annual recurring revenue rose 25% to $3.77 billion, while non-GAAP operating margin reached a record 24%. Management cited strong platform adoption, large-deal activity, and demand for AI security, including its Agentic SecOps initiatives. Zscaler Announces Strong Financial Results
  • Positive Sentiment: Initial fiscal 2027 guidance was above consensus for adjusted EPS: $4.86–$4.90 for the year versus an estimate near $3.70, while first-quarter revenue guidance of $935–$939 million also topped expectations. Several analysts raised targets, including Baird to $230, Stephens to $225, and Needham to $215. Analysts Boost Zscaler Forecasts
  • Neutral Sentiment: Management identified AI-driven cybersecurity demand as a major growth opportunity, but analysts questioned whether AI spending represents incremental enterprise budgets or the reallocation of existing security spending. Zscaler Earnings and AI Demand
  • Negative Sentiment: Fiscal 2027 revenue and ARR growth are expected to slow to roughly 17%, compared with 25% in fiscal 2026. That deceleration overshadowed the earnings beat and prompted concerns about future growth. Zscaler Fiscal 2027 Guidance
  • Negative Sentiment: Fourth-quarter free cash flow fell 65% year over year to $60.8 million, below the $66.9 million estimate, as capital expenditures and internal-use software spending increased sharply. Zscaler also announced a restructuring affecting about 3% of its workforce. Zscaler Free Cash Flow Decline

Zscaler Company Profile

(Get 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.

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Earnings History for Zscaler (NASDAQ:ZS)

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