Zscaler reported fiscal 2026 revenue of $3.35 billion, up 25% year over year, while fourth-quarter revenue also increased 25% to $898.2 million as the cybersecurity company highlighted growing adoption across its cloud security and AI-related offerings.
Annual recurring revenue reached $3.771 billion, up 25%, including $246 million of net new ARR during the fiscal fourth quarter.
Excluding the acquisition of Red Canary, which contributed $141 million in ARR, Zscaler said ARR grew 20% to $3.63 billion, while net new ARR increased 17%.
Fourth-quarter GAAP operating loss narrowed to $15.5 million from $32.2 million, while non-GAAP operating income increased to $218.4 million, representing a record 24% non-GAAP operating margin.
GAAP net loss narrowed to $3.4 million, or $0.02 per diluted share, from $17.6 million, or $0.11 per share, a year earlier.
Non-GAAP net income increased to $198.2 million, or $1.19 per diluted share, from $146.7 million, or $0.89 per share.
Operating cash flow for the quarter was $279.3 million, while free cash flow was $60.8 million. The reduction in quarterly free cash flow reflected $218.5 million of capital expenditures and internal-use software investment, compared with $78.7 million in the prior-year quarter.
For the full fiscal year, non-GAAP operating income increased to $767.1 million from $580.1 million, representing a 23% margin.
Fiscal 2026 non-GAAP net income reached $704.2 million, or $4.21 per diluted share, compared with $534.8 million, or $3.28 per diluted share, in fiscal 2025.
Zscaler generated $1.13 billion of operating cash flow and $779.1 million of free cash flow for the year.
For the first quarter of fiscal 2027, Zscaler expects revenue of $935 million to $939 million, representing approximately 19% growth, and non-GAAP diluted EPS of approximately $1.15 to $1.16.
For fiscal 2027, the company expects ARR of $4.396 billion to $4.426 billion and revenue of approximately $3.908 billion to $3.938 billion, representing growth ranges of approximately 16.6% to 17.4% and 16.6% to 17.5%, respectively.
Full-year non-GAAP operating income is projected at $924 million to $932 million, while non-GAAP diluted EPS is expected to range from $4.86 to $4.90. Zscaler expects a free cash flow margin of approximately 23% to 23.5%.
KEY QUOTES:
“AI represents one of the most significant opportunities in Zscaler’s history. By connecting users, workloads, branches, and now agents directly to the applications they need without placing them on the network, we are uniquely equipped to help companies both combat the threats created by agentic AI and securely deploy AI agents and models,” said Jay Chaudhry, CEO, Chairman and Founder of Zscaler. “Our continued innovation across Zero Trust SASE, Agentic SecOps, Data Security, and Security for AI is driving increased platform adoption and creating new avenues for growth, as reflected in our strong Q4 results. As AI becomes foundational to how organizations operate, we are well positioned to extend our leadership as the cybersecurity platform for the AI era.”
Jay Chaudhry, CEO, Chairman and Founder of Zscaler
“We delivered a strong fourth quarter, with revenue and ARR both growing 25% year over year, net new ARR growing 24%, and non-GAAP operating margin reaching a record 24%,” said Kevin Rubin, chief financial officer of Zscaler. “Our growth engine continues to broaden beyond users, with a strong contribution from non-seat-based solutions, continued Z-Flex momentum, record large-deal activity, and improving sales productivity. I am excited about our momentum as we enter fiscal 2027.”
Kevin Rubin, Chief Financial Officer of Zscaler
