Zscaler (ZS) Earnings Date & Reports

Key Takeaways

• Revenue rose 25% year-over-year to $850.5 million for the third quarter of fiscal 2026 ended April 30, 2026.
• Annual recurring revenue (ARR) grew 25% to $3.525 billion, with net new ARR of $166 million during the quarter.
• Non-GAAP operating margin reached a record 23%, up from 22% a year ago, with non-GAAP operating income of $195.8 million.
• Non-GAAP earnings per share (EPS) increased to $1.08 from $0.84 in the prior-year quarter.
• The company raised its full-year fiscal 2026 guidance for revenue, ARR, and non-GAAP profitability.
• GAAP results showed a net loss of $13.9 million, or $0.09 per share, compared to a $4.1 million loss a year earlier.

Earnings Context and Why It Matters

Zscaler delivers cloud security solutions centered on its Zero Trust Exchange platform. The company’s fiscal year ends July 31, making the third quarter a key indicator of momentum heading into the final period. Investors closely monitor these results for signs of sustained demand in cybersecurity amid rising AI-related threats and enterprise digital transformation. Strong ARR growth and improving profitability can influence valuation multiples and future guidance expectations in a competitive sector.

Reported Results

Revenue reached $850.5 million, a 25% increase from $678.0 million in the third quarter of fiscal 2025. ARR expanded 25% to $3.525 billion. Non-GAAP operating income totaled $195.8 million, or 23% of revenue, compared with $146.7 million, or 22%, a year earlier. Non-GAAP net income rose to $177.9 million, or $1.08 per diluted share, versus $136.8 million, or $0.84 per share, previously. GAAP net loss widened slightly to $13.9 million, or $0.09 per share. Deferred revenue grew 25% to $2.477 billion. The company beat consensus estimates on both revenue and non-GAAP EPS and raised full-year fiscal 2026 guidance across key metrics.

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Market Reaction and Investor Sentiment

Following the release after market close on May 26, 2026, shares initially reacted negatively in after-hours trading. Investors appeared to focus on the pace of growth relative to elevated expectations and forward commentary, even as the company delivered record margins and raised guidance. Sentiment heading into the report had been constructive given the company’s positioning in AI security, though post-print volatility reflected typical earnings uncertainty in high-growth technology names.

Forward Outlook and Key Factors to Monitor

Zscaler raised its full-year fiscal 2026 revenue guidance to a range of approximately $3.3295 billion to $3.3325 billion, implying growth of 24.6% to 24.7%. ARR guidance was lifted to $3.740 billion to $3.749 billion. Non-GAAP operating income is now expected at $755 million to $757 million. The company also provided fourth-quarter fiscal 2026 targets, including revenue of $875 million to $878 million.

Investors will watch execution on the recently announced acquisition of Symmetry Systems and partnerships involving frontier AI models. Demand signals in public sector and international markets, along with the impact of new product initiatives such as Project AI-Guardian, remain important. Margin expansion trends and free cash flow generation will be monitored closely as the company balances growth investments with profitability targets.

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