Zscaler's Fourth-Quarter Revenue Growth Holds at 25%

The Tip Desk · September 3, 2026 · 3 min read

Revenue reached $898.2 million and annual recurring revenue $3,771 million as non-GAAP operating margin hit a record 24%.

Zscaler, Inc. (ZS), the cloud-security company, closed fiscal 2026 with revenue of $898.2 million, up 25% from a year earlier, matching the year-over-year pace of the third quarter after 26% growth in the second.

Annual recurring revenue rose 25% to $3,771 million, with $246 million of net new ARR in the quarter. Excluding the Red Canary acquisition, which contributed $141 million of ARR, ARR grew 20% to $3,630 million and net new ARR grew 17%.

Chief Financial Officer Kevin Rubin said the growth engine was broadening beyond seats, citing non-seat-based solutions, Z-Flex, large-deal activity and sales productivity. Chief Executive Jay Chaudhry framed artificial intelligence as a major opportunity, saying the company is connecting users, workloads, branches and agents to applications without placing them on the network.

Non-GAAP income from operations was $218.4 million, a record 24% of revenue. GAAP loss from operations narrowed to $15.5 million, or 2% of revenue. Non-GAAP net income was $198.2 million, or $1.19 a share.

Cash provided by operations was $279.3 million, or 31% of revenue. Free cash flow was $60.8 million, or 7% of revenue, after capital expenditures and internal-use software of $218.5 million.

Deferred revenue was $2,926 million as of July 31, 2026, up 19% from a year earlier.

For the full fiscal year ended July 31, 2026, revenue grew 25% to $3,353 million, or 20% to $3,209 million excluding Red Canary. Non-GAAP income from operations was $767.1 million, or 23% of revenue. Non-GAAP net income was $704.2 million, or $4.21 a share. Cash from operations was $1,130 million, or 34% of revenue. Free cash flow was $779.1 million, or 23% of revenue.

The company adopted a long-term projected non-GAAP tax rate of 21%, down from 23%, citing the One Big Beautiful Bill Act. The rate applies prospectively.

For the first quarter of fiscal 2027, Zscaler expects revenue of $935 million to $939 million, about 19% year-over-year growth, and non-GAAP income from operations of $215 million to $217 million, a 23% operating margin. Non-GAAP net income is expected at about $1.15 to $1.16 a share on roughly 170 million fully diluted shares.

For full-year fiscal 2027, the company expects ARR of $4.396 billion to $4.426 billion, growth of about 16.6% to 17.4%, and revenue of about $3.908 billion to $3.938 billion, growth of 16.6% to 17.5%. Non-GAAP income from operations is expected at $924 million to $932 million, about 21% growth. Non-GAAP net income is expected at $4.86 to $4.90 a share on about 173 million fully diluted shares. Free cash flow margin is expected at about 23.0% to 23.5%.

Cash and cash equivalents were $928.4 million at July 31, 2026. Short-term investments were $2,545.8 million. Convertible senior notes outstanding were $1,696.4 million.