Zscaler, Inc.

Q4 revenue was $898 million, up 25% year over year and 6% sequentially. Q4 ARR grew 25% year over year to $3.8 billion, net new ARR was $246 million, and net new ARR excluding Red Canary was $232 million, up 17% year over year. Non-GAAP gross margin was 80.2% versus 79.3% a year ago, and non-GAAP operating income was $218 million versus $159 million a year ago; non-GAAP operating margin was 24.3%, up 220 basis points year over year. For full fiscal 2026, revenue was $3.4 billion, up 25%, non-GAAP gross margin was 80.3%, and non-GAAP operating margin was 22.9%; free cash flow margin was 23%. For fiscal 2027, Zscaler guided Q1 revenue to $935 million to $939 million, up about 19%, with EPS of $1.15 to $1.16. Full-year fiscal 2027 guidance calls for ARR of $4.396 billion to $4.426 billion, revenue of $3.908 billion to $3.938 billion, non-GAAP gross margin of about 80%, operating margin of about 23.7%, EPS of $4.86 to $4.90, and free cash flow margin of about 23% to 23.5%.

Jay Chaudhry framed the quarter as evidence that Zscaler’s Zero Trust platform is well positioned for the AI era, arguing that AI is simultaneously creating more attacks and making customers more urgent about securing data, models, agents and users. He emphasized that customers want an integrated platform rather than point products, and said Zscaler’s breadth across Zero Trust, data security, security for AI and SecOps is driving wins. His tone was confident and expansive, with multiple examples of large enterprise deals and strong interest in new offerings.

Kevin Rubin highlighted strong operating leverage and broad-based growth, citing Q4 revenue of $898 million, ARR of $3.8 billion, net new ARR of $246 million, and record non-GAAP operating margin of 24.3%. He said full-year free cash flow was $779 million with a 23% margin, Q4 operating cash flow was $279 million, and the company ended with about $3.5 billion in cash, cash equivalents and short-term investments versus $1.7 billion of debt. He also noted elevated CapEx from component shortages and said fiscal 2027 CapEx should remain elevated; the company expects restructuring charges of about $30 million to $33 million tied to a workforce action affecting about 3% of employees.

Analysts focused on the slowdown implied by fiscal 2027 ARR guidance, asking how much was due to sales churn, leadership turnover and the Red Canary integration versus underlying demand. Management said the sales organization is in transition but emphasized record productivity, improved channel coverage and that the leadership change should play out in the first half of the year; they also said AI is creating a genuine tailwind, not just a hiring need. Questions on AI security competition drew a response that customers want an integrated solution tied into broader Zero Trust, while questions on Red Canary were answered with the view that its business was maintained, elevated MDR churn was expected, and no incremental ARR contribution is assumed from Red Canary in 2027 because it will be embedded into the integrated SecOps launch. Z-Flex was described as a flexibility tool, not a mandate, and management said it reduces procurement friction and supports longer-term commitments.