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

Zscaler (NASDAQ:ZS) posted its quarterly earnings results on Thursday, September 3rd. The company reported $1.19 earnings per share for the quarter, topping the consensus estimate of $1.09 by $0.10, Briefing.com reports. The firm had revenue of $898.19 million for the quarter, compared to the consensus estimate of $876.96 million. Zscaler had a negative net margin of 1.88% and a positive return on equity of 1.23%. The company’s revenue for the quarter was up 24.9% on a year-over-year basis. During the same period last year, the firm posted $0.89 earnings per share. 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 Stock Performance

Shares of ZS stock opened at $214.64 on Friday. The company has a debt-to-equity ratio of 0.65, a quick ratio of 1.70 and a current ratio of 1.70. The firm has a market cap of $35.00 billion, a P/E ratio of -550.36, a P/E/G ratio of 23.95 and a beta of 0.95. The firm’s 50 day moving average price is $173.38 and its 200-day moving average price is $153.31. Zscaler has a one year low of $114.63 and a one year high of $336.99.

Trending Headlines about Zscaler

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: New CRO could support growth: Zscaler promoted Ross Tackett, its Head of Worldwide Sales, to Chief Revenue Officer. The company said he will oversee global revenue operations and help expand adoption of its security platform. His existing sales experience may provide continuity as Zscaler pursues enterprise growth. Zscaler Appoints Ross Tackett as Chief Revenue Officer
• Positive Sentiment: AI security product expands the growth narrative: Zscaler’s Agentic SOC, developed with Anthropic and OpenAI, is designed to automate security operations and respond to threats at machine speed. Its use of Zscaler’s large zero-trust data set and integrated controls could strengthen the company’s competitive position and create additional demand, although commercial traction remains to be demonstrated. Can Zscaler’s Agentic SOC Redefine Its Competitive Moat In AI-Driven Cybersecurity?
• Positive Sentiment: Analyst remains bullish: Bernstein maintained an Outperform rating and raised its price target to $298, implying substantial upside from recent levels. This supports the view that Zscaler’s long-term cybersecurity and AI opportunity remains attractive. Why Bernstein Still Sees 46% Upside in Zscaler
• Neutral Sentiment: Investor Day is an upcoming catalyst: Zscaler will present its strategy, long-term growth drivers and financial outlook on October 6. Investors may look for updated guidance and evidence that new AI products can accelerate revenue growth. Zscaler to Host Investor Day on October 6
• Negative Sentiment: Leadership transition weighed on sentiment: Reports that Zscaler’s stock fell after the CRO change indicate investors may be concerned about execution, sales momentum or the circumstances behind the transition, despite the promotion of an internal executive. Zscaler stock falls on CRO leadership change
• Negative Sentiment: Valuation and insider selling remain risks: Commentary notes that Cisco offers cybersecurity exposure at a lower sales multiple, while a Zscaler director sold 5,394 shares. These factors could limit upside after the stock’s strong recent rebound. Zscaler vs. Cisco

Wall Street Analyst Weigh In

A number of research firms have commented on ZS. Jefferies Financial Group reiterated a “buy” rating and issued a $220.00 price objective on shares of Zscaler in a report on Wednesday, September 2nd. Rosenblatt Securities restated a “buy” rating and set a $200.00 target price on shares of Zscaler in a report on Friday, September 4th. Royal Bank Of Canada upped their price target on Zscaler from $200.00 to $210.00 and gave the company an “outperform” rating in a research report on Friday, September 4th. Needham & Company LLC increased their price target on Zscaler from $180.00 to $215.00 and gave the company a “buy” rating in a report on Friday, September 4th. Finally, Barclays lifted their price objective on Zscaler from $192.00 to $200.00 and gave the stock an “overweight” rating in a research report on Friday, September 4th. Thirty-four equities research analysts have rated the stock with a Buy rating, six have assigned a Hold rating and two have issued a Sell rating to the company. According to MarketBeat.com, Zscaler has a consensus rating of “Moderate Buy” and a consensus target price of $218.38.

Insider Transactions at Zscaler

In other Zscaler news, CEO Jagtar Chaudhry sold 2,852 shares of the business’s stock in a transaction that occurred on Wednesday, September 16th. The stock was sold at an average price of $192.76, for a total value of $549,751.52. Following the sale, the chief executive officer owned 340,186 shares of the company’s stock, valued at $65,574,253.36. The trade was a 0.83% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, insider Robert Schlossman sold 5,394 shares of the company’s stock in a transaction on Monday, September 21st. The stock was sold at an average price of $200.00, for a total value of $1,078,800.00. Following the transaction, the insider owned 61,525 shares in the company, valued at $12,305,000. This trade represents a 8.06% decrease in their ownership of the stock. 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. Insiders have sold 28,656 shares of company stock worth $5,526,076 in the last three months. Company insiders own 17.20% of the company’s stock.

Zscaler Company Profile

Zscaler, Inc is a cloud-native cybersecurity company that provides security services designed to help organizations connect users, devices, applications and workloads securely over the internet. Its platform is built around a zero-trust security model, which verifies access based on identity, context and policy rather than relying primarily on a traditional corporate network perimeter.

The company’s offerings include Zscaler Internet Access, which secures access to internet and software-as-a-service applications, and Zscaler Private Access, which provides secure, policy-based access to private applications without requiring conventional virtual private networks.