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AI Cybersecurity NASDAQ: ZS

Zscaler, Inc. (ZS)

AI-powered zero trust security for the cloud-first enterprise.

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✓ Reviewed by AI Decoded Editorial Team Updated March 2026
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The AI Angle

Zscaler is the leading cloud-native zero trust security platform, processing over 500 billion daily transactions to protect enterprise traffic across users, workloads, IoT, and OT. The company has aggressively pivoted toward AI security, acquiring AI security pioneer SPLXAI and Red Canary for a combined $692 million in Q1 FY2026. The acquisitions extend the Zero Trust Exchange platform with AI asset discovery and automated red teaming capabilities, positioning Zscaler to secure the entire enterprise AI lifecycle.

Q2 fiscal 2026 (ended January 31, 2026) revenue grew 26% year-over-year to $815.8 million, exceeding guidance of $797–$799 million. ARR grew 25% to $3,359 million. Non-GAAP operating margin exceeded 22%, and adjusted EPS was $1.01. The company raised full-year ARR guidance to 24% growth and now expects FY2026 revenue of $3.73–$3.75 billion, with full-year EPS of $3.99–$4.02.

Key Numbers

$2.67B
FY2025 Revenue
+23.3% YoY
$815.8M
Q2 FY2026 Revenue
+26% YoY; beat guidance
$3,359M
ARR
+25% YoY
$3.73–$3.75B
FY2026 Revenue Guidance
Raised guidance
22%+
Non-GAAP Operating Margin
Q2 FY2026
3/5
AI Exposure Score
Significant AI exposure.
⚡⚡⚡⚡⚡
⚡ About AI Exposure Score: Reflects how central AI is to this company's current revenue and growth strategy. 5 = AI is the core business. 1 = AI is a minor angle. Editorial assessment — not a buy/sell signal.

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Upcoming Catalysts

  • AI security acquisitions (SPLX, Red Canary) creating an end-to-end AI security lifecycle platform
  • Zero trust architecture becoming mandatory for enterprises as AI expands attack surfaces
  • ARR growth acceleration to 26% in Q2 FY2026 after raising full-year guidance
  • Federal and regulated industry adoption driven by zero trust mandates

Key Risks

  • Premium valuation relative to peers in a competitive cybersecurity market
  • Palo Alto Networks and CrowdStrike competing aggressively for platform consolidation deals
  • Acquisition integration risk from $692M in deals closing simultaneously
  • Operating cash flow growth of 14% lagging revenue growth — margin expansion must continue

Sources: Zscaler IR (Q2 FY2026, Feb 26, 2026), StockTitan, Motley Fool, FinancialContent

⚠️ Not financial advice. This page is for informational purposes only. All figures are sourced from public earnings reports, company guidance, and financial news. Past performance is not indicative of future results. Always do your own research before making any investment decisions.

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