Zscaler Inc. (ZS) reported fourth-quarter revenue of $898.2 million, up 25% year over year, topping Wall Street expectations as businesses rushed to secure AI-driven workflows.
Adjusted earnings reached $1.19 per share, beating analyst estimates of $1.09. The cloud security company narrowed its GAAP net loss to $3.4 million, or $0.02 per share, from $17.6 million a year earlier. Annual recurring revenue climbed 25% to $3.77 billion.
Chief Executive Officer Jay Chaudhry attributed the gains to adoption of Zscaler’s Zero Trust architecture, highlighting a 50% sequential rise in AI security bookings.
For fiscal year 2026, revenue rose 25% to $3.353 billion, while adjusted net income grew to $704.2 million, or $4.21 per share. Full-year operating cash flow hit $1.13 billion.
“The core competency we bring to the table is pretty unique, and as the adoption of AI agents happens, the market will recognize more and more that Zscaler is a critical player,” Chaudhry told CNBC in an interview.
ZS stock ended Thursday 3% higher, but slipped about 1.8% after-hours. Investors were wary of the stock’s revenue growth relative to its cybersecurity peers such as Palo Alto (PANW), CrowdStrike (CRWD), and Okta (OKTA).
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In addition, growth in high-value customers (with ARR above $1 million) has faltered over the quarters.
For the first quarter of fiscal 2027, Zscaler expects revenue of $935 million to $939 million and adjusted EPS of $1.15 to $1.16, compared to average expectations of $927 million and adjusted EPS of $1.08 per share.
For full-year fiscal 2027, the company forecasts revenue of $3.908 billion to $3.938 billion, with annual recurring revenue of $4.396 billion to $4.426 billion. Full-year adjusted earnings are expected to range from $4.86 to $4.90 per share.
Retail sentiment on Stocktwits was ‘extremely bullish’ with ‘extremely high’ message volumes.
ZS stock has lost 22.4% year-to-date.
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