Zscaler (ZS) quarter:Q4 year:2026 Financial Results Summary
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Zscaler (ZS) Q4 2026: Revenue and ARR Growth of 25% YoY — Strong Momentum Ahead
Zscaler, Inc. (Nasdaq: ZS) reported its fiscal fourth quarter and full year results for 2026, showcasing impressive growth metrics that exceeded the previous year's performance. The company achieved a revenue increase of $179 million, or +25% year over year, reaching $898.2 million for the quarter. Additionally, Annual Recurring Revenue (ARR) also grew by 25% year over year to $3,771 million.
This quarter is undoubtedly a positive outcome for shareholders, reflecting Zscaler's strong market position and operational efficiency. The growth in both revenue and ARR indicates robust demand for Zscaler's cloud security solutions, particularly as organizations increasingly adopt AI technologies. The company's strategic focus on innovation in areas such as Zero Trust SASE and Data Security is paying off, as evidenced by the record operating margin and net income figures.
Key Financial Metrics
- Revenue: Grew 25% year over year to $898.2 million.
- ARR: Grew 25% year over year to $3,771 million; net new ARR was $246 million.
- GAAP Loss from Operations: $15.5 million, or 2% of revenue, improved from a loss of $32.2 million (4% of revenue) in Q4 2025.
- Non-GAAP Income from Operations: $218.4 million, or 24% of revenue, compared to $158.9 million (22% of revenue) in Q4 2025.
- GAAP Net Loss: $3.4 million, compared to $17.6 million in Q4 2025.
- Non-GAAP Net Income: $198.2 million, up from $146.7 million in Q4 2025.
- GAAP Net Loss per Share (Diluted): $0.02, improved from $0.11 in Q4 2025.
- Non-GAAP Net Income per Share: $1.19, compared to $0.89 in Q4 2025.
- Cash Flow from Operations: $279.3 million, or 31% of revenue, compared to $250.6 million (35% of revenue) in Q4 2025.
- Free Cash Flow: $60.8 million, or 7% of revenue, down from $171.9 million (24% of revenue) in Q4 2025.
Operational Highlights
Zscaler's operational efficiency is highlighted by its record non-GAAP operating margin of 24%. The company also reported a significant increase in net new ARR, which grew by 24% year over year. The acquisition of Red Canary contributed $141 million to ARR, while organic growth (excluding the acquisition) was still strong at 20%.
The deferred revenue grew by 19% year over year to $2,926 million, indicating a solid pipeline for future revenue. The company’s focus on non-seat-based solutions and Z-Flex momentum has broadened its growth engine, which is crucial as the cybersecurity landscape evolves.
Guidance and Future Outlook
Looking ahead, Zscaler provided optimistic guidance for the first quarter of fiscal 2027, expecting revenue between $935 million and $939 million, representing approximately 19% year-over-year growth. The company anticipates non-GAAP income from operations of $215 million to $217 million, reflecting a growth rate of approximately 25% to 26%.
For the full year fiscal 2027, Zscaler expects ARR to reach between $4.396 billion and $4.426 billion, indicating growth of approximately 16.6% to 17.4%. Revenue guidance for the full year is set at approximately $3.908 billion to $3.938 billion, translating to growth of 16.6% to 17.5%.
Conclusion
Zscaler's strong fourth quarter results and positive guidance for the upcoming fiscal year position the company well for continued growth in the cybersecurity market. Investors should watch for the company's execution on its strategic initiatives, particularly in AI and cloud security, as these areas are expected to drive further adoption of Zscaler's solutions. The upcoming quarter will be critical in assessing how well Zscaler can maintain its momentum and capitalize on the growing demand for cybersecurity solutions in an increasingly digital world.
Note: All amounts are in thousands.
| ZSCALER, INC. Condensed Consolidated Statements of Income (unaudited) | Three Months Ended July 31, 2026 | Three Months Ended July 31, 2025 | Year Ended July 31, 2026 | Year Ended July 31, 2025 |
|---|---|---|---|---|
| Revenue | $ 898,158 | $ 719,226 | $ 3,352,136 | $ 2,673,700 |
| Cost of revenue | 208,981 | 172,240 | 777,629 | 618,136 |
| Gross profit | 689,177 | 546,986 | 2,574,507 | 2,055,564 |
| Operating expenses | 704,635 | 579,228 | 2,707,623 | 2,183,505 |
| Loss from operations | -15,458 | -32,242 | -133,116 | -128,135 |
| Interest income | 35,042 | 33,175 | 136,132 | 125,366 |
| Interest expense | -2,746 | -2,074 | -11,794 | -9,522 |
| Other expense, net | -1,900 | -762 | -8,210 | -5,673 |
| Income (loss) before income taxes | 14,904 | -1,903 | -17,139 | -18,364 |
| Provision for income taxes | 18,273 | 15,675 | 46,040 | 23,187 |
| Net loss | $ -3,369 | $ -17,578 | $ -63,179 | $ -41,577 |
| Net loss per share, basic and diluted | $ -0.02 | $ -0.11 | $ -0.39 | $ -0.27 |
| Weighted-average shares used to compute net loss per share, basic and diluted | 161,804 | 156,496 | 160,219 | 154,439 |
| ZSCALER, INC. Condensed Consolidated Balance Sheets (unaudited) | July 31, 2026 | July 31, 2025 |
|---|---|---|
| Current assets: | ||
| Cash and cash equivalents | $ 928,354 | $ 2,389,023 |
| Short-term investments | 2,545,797 | 1,183,386 |
| Accounts receivable, net | 1,149,073 | 992,181 |
| Deferred contract acquisition costs | 215,577 | 180,819 |
| Prepaid expenses and other current assets | 192,432 | 148,881 |
| Total current assets | 5,031,233 | 4,894,290 |
| Property and equipment, net | 753,001 | 543,377 |
| Operating lease right-of-use assets | 137,231 | 89,772 |
| Deferred contract acquisition costs, noncurrent | 402,423 | 328,722 |
| Acquired intangible assets, net | 214,355 | 47,323 |
| Goodwill | 1,218,098 | 417,730 |
| Other noncurrent assets | 110,373 | 98,674 |
| Total assets | $ 7,866,714 | $ 6,419,888 |
| Liabilities and Stockholders’ Equity | ||
| Current liabilities: | ||
| Accounts payable | $ 47,972 | $ 46,906 |
| Accrued expenses and other current liabilities | 133,304 | 93,984 |
| Accrued compensation | 234,640 | 181,807 |
| Deferred revenue | 2,480,501 | 2,054,417 |
| Operating lease liabilities | 64,894 | 52,497 |
| Total current liabilities | 2,961,311 | 2,429,611 |
| Convertible senior notes | 1,696,355 | 1,700,727 |
| Deferred revenue, noncurrent | 445,272 | 413,609 |
| Operating lease liabilities, noncurrent |
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