Majors Account Executive

Is zscaler (zs)'s depressed stock opportunity or warning? Answer may lie in emerging AI security business. Zscaler, Inc. (NASDAQ: ZS) reported fiscal 2026 outcomes on September 1, 2026, delivering 25% income development to $3.35 billion and matching 25% annual recurring income (ARR) development to $3.77 billion, alongside report non-GAAP working margins of 24% in This autumn. But beneath these headline figures lies a extra complicated working narrative that calls for investor scrutiny: reported development is overstated by the Purple Canary acquisition, natural momentum has decelerated, gross sales management transitions introduce near-term execution danger, and monetary 2027 steering fell wanting Avenue expectations - triggering vital share value weak point. The query for buyers is whether or not it is a structural inflection downward or a brief transition interval through which AI-powered safety platforms will reaccelerate development. What the newest reported quarter says in regards to the present working story and the foremost enterprise drivers. Zscaler's This autumn fiscal 2026 income reached $898.2 million, up 25% year-over-year, with web new ARR of $246 million in the course of the quarter. Nevertheless, acquisition-adjusted development tells a materially completely different story. The Purple Canary acquisition contributed $141 million of fourth-quarter ARR, lowering natural ARR development to twenty% when excluded, with web new ARR declining to 17% on an natural foundation. This 5-to-8 percentage-point hole between reported and natural development charges alerts that underlying momentum has decelerated extra sharply than headline figures counsel. The core enterprise driver shift is important. CFO Kevin Rubin emphasised that the "development engine continues to broaden past customers, with a robust contribution from non-seat-based options, continued Z-Flex momentum, report large-deal exercise, and enhancing gross sales productiveness". This displays a deliberate strategic pivot away from conventional per-user licensing towards consumption-based and usage-driven fashions. Notably, 30% of latest annual contract worth derived from usage-based options throughout Q3, indicating a structural shift in how the corporate monetizes its platform. The corporate introduced a 3% workforce discount efficient September 1, 2026, with anticipated non-recurring costs of $30 to $33 million. Moreover, the corporate misplaced two gross sales leaders in the course of the quarter, prompting CFO Rubin to undertake a "prudent strategy" to steering amid these transitions. These personnel modifications, mixed with the restructuring, counsel administration is recalibrating its go-to-market mannequin to align with the shift towards usage-based and AI-driven options. What the newest reported income combine, margins, steadiness-sheet context, and administration commentary indicate for traders now. Zscaler's profitability profile presents a paradox central to the valuation debate. On a non-GAAP foundation, fiscal 2026 non-GAAP working revenue reached $767.1 million, representing a 23% working margin. This autumn non-GAAP working margin expanded to a report 24%, up from 22% in This autumn fiscal 2025, demonstrating operational leverage regardless of the expansion deceleration. But on a GAAP foundation, the corporate stays unprofitable. Fiscal 2026 GAAP web loss widened to $63.2 million from $41.5 million in fiscal 2025, whereas This autumn GAAP working loss reached $15.5 million. This $126.4 million annual hole between non-GAAP and GAAP web revenue displays substantial stock-based compensation and acquisition-related costs. Money technology stays strong however faces headwinds. Fiscal 2026 free money movement totaled $779.1 million (23% margin), up from $726.7 million in fiscal 2025. Nevertheless, This autumn free money movement margin collapsed to 7% from 24% a yr earlier, pushed by elevated capital expenditures and internal-use software program spending totaling roughly $350.5 million. Deferred income grew 19% year-over-year to $2.93 billion, offering income visibility, although this development fee trails each income and ARR enlargement, suggesting normalization in buyer contract lengths or deal buildings. Fiscal 2027 steering alerts materials deceleration. The corporate initiatives income of $3.908 to $3.938 billion (16.6% to 17.5% development) and ARR of $4.396 to $4.426 billion (16.6% to 17.4% development) - a 7-to-8 percentage-point slowdown from fiscal 2026's 25% development. Non-GAAP EPS is projected at $4.86 to $4.90, and free money movement margin is predicted to stay steady at 23.0% to 23.5%, contingent on the corporate's skill to handle the capex improve. This steering fell wanting StreetAccount and FactSet consensus estimates, triggering vital share value weak point. What traders ought to watch subsequent. Natural development trajectory and usage-based monetization traction are the highest near-term indicators. The corporate should show that the shift towards consumption-driven fashions expands whole addressable market and buyer lifetime worth quite than redistributing income timing. The 85% SecOps ARR development suggests real product-market match, however buyers ought to monitor whether or not high-growth segments maintain momentum at scale. Q1 fiscal 2027 outcomes would be the first full quarter post-restructuring and can present readability on whether or not gross sales management transitions have stabilized go-to-market execution. Capital depth and free money movement sustainability warrant shut scrutiny. The 200 basis-point capex improve might compress the free money movement yield that anchors the inventory's valuation if infrastructure investments fail to generate proportional income or margin enlargement. Traders ought to observe capex as a proportion of income and working money movement conversion charges quarterly. The GAAP profitability hole is the structural valuation concern. The $126.4 million annual hole between non-GAAP and GAAP web revenue is substantial. If the corporate can not slim this hole by way of lowered stock-based compensation grant charges or improved working leverage, the non-GAAP profitability narrative turns into more and more disconnected from true financial earnings, probably limiting a number of enlargement regardless of AI safety momentum. Key alerts for traders. * Natural ARR development decelerated to 17% excluding the Purple Canary acquisition versus 25% reported development in fiscal 2026, and monetary 2027 steering initiatives additional deceleration to 16.6% to 17.5% - the tempo of this slowdown relative to analyst expectations is the one most necessary metric to observe in Q1 FY2027 outcomes. * This autumn FY2026 free money movement margin collapsed to 7% from 24% year-over-year, pushed by $350.5 million in capex and inner software program spend; administration projecting a 200 basis-point capex improve in FY2027 makes free money movement sustainability probably the most essential monetary variable to observe. * GAAP web loss widened to $63.2 million in FY2026 from $41.5 million in FY2025, making a $126.4 million annual hole between non-GAAP and GAAP profitability; narrowing this hole is important for the inventory to maintain a premium valuation a number of. * Gross sales management transitions and the three% workforce discount introduced September 1, 2026 introduce execution danger; Q1 FY2027 large-deal exercise and web new ARR will reveal whether or not go-to-market disruption is non permanent or alerts deeper organizational challenges.

The latest in Risk360: agentic AI and integration support. Security and risk teams are under pressure to do more than just identify issues - they need to understand what matters most, explain business impact clearly, and act more quickly across a growing set of tools and stakeholders. That's the challenge Risk360 is built to solve. By helping organizations quantify cyber risk, prioritize remediation, and communicate posture in business-relevant terms, Risk360 gives customers a clearer view of where they stand and what they should do next. As part of this mission, Zscaler now has two new ways to help customers get even more value from Risk360: a Risk360 agent and support for Risk360 in OneAPI. The Risk360 agent. As security environments become more complex, admins need more than dashboards and static workflows. They need a faster, more intuitive way to investigate issues, understand what is driving risk, make the best choices possible, and take the next right action. That's where agentic AI can make a real difference. It can reduce the time it takes to navigate tools, interpret data, and translate technical findings into decisions that the business can act on. Zscaler's new Risk360 agent brings the above benefits to risk analysis for each customer's Zscaler environment. It helps admins quickly understand their overall risk posture, identify the most important issues that need to be addressed, and assess the financial exposure tied to those risks. Through natural-language interactions, customers can drill into specific categories and risk factors, investigate what is driving change, and uncover root causes. The result is faster analysis, more confident prioritization, and clearer communication with executives, compliance teams, and other stakeholders. The Risk360 agent is part of Zero Trust Exchange Agentic Operations, which enables agentic AI to manage Zscaler - whether that's the Zscaler platform's built-in agent (ZAgent) or, in the near-term future, third-party AI agents. Either way, the service allows agentic AI to leverage specialized product agents so that customers can interact with Zscaler services in a more cohesive, streamlined, and intelligent fashion. In other words, Risk360 can now be managed alongside other Zscaler solutions in a single conversational chat with an AI agent. Risk360 OneAPI support. Customers need the data from their security solutions to work beyond the boundaries of each individual tool. As such, application programming interfaces (APIs) are essential. They enable practitioners to integrate insights from their solutions into other tools for broader operational, reporting, and partner workflows - without relying on manual exports or disconnected processes. With Risk360 support now available for OneAPI, customers can leverage the same unified API endpoint that is used across the rest of the Zscaler platform for Risk360. Conceptually, this makes it easier to bring Risk360 into the systems and processes you already have in place. Practically, it supports workflows such as pulling historical risk scores and peer comparisons into internal dashboards, retrieving risk factor and financial exposure data for analysis, and automating report generation and access for downstream use. It creates a cleaner path for integration with GRC tools, SIEM workflows, service providers, and cyber insurance ecosystems that depend on timely risk data. By extending Risk360 through OneAPI, Zscaler, Inc. is helping customers turn risk insights into action far more efficiently - whether that means building custom workflows, feeding external systems, or scaling automation across teams. Wrap-Up. To learn more about its in-product AI experience and how it connects users to specialized product agents, read its ZAgent blog. To explore how OneAPI helps customers automate and integrate across the Zero Trust Exchange, visit its OneAPI webpage. Was this post useful? Yes, very! Not really Disclaimer: This blog post has been created by Zscaler for informational purposes only and is provided "as is" without any guarantees of accuracy, completeness or reliability. Zscaler assumes no responsibility for any errors or omissions or for any actions taken based on the information provided. Any third-party websites or resources linked in this blog post are provided for convenience only, and Zscaler is not responsible for their content or practices. All content is subject to change without notice. By accessing this blog, you agree to these terms and acknowledge your sole responsibility to verify and use the information as appropriate for your needs.

What's New in ZDX: broader reach, smarter remediation. ZDX is the experience layer of the Zscaler SASE platform. It shares the same client connector, the same data plane, and the same global infrastructure that powers ZIA and ZPA. That means every improvement to digital experience monitoring simultaneously strengthens the security and networking fabric customers already rely on. This summer, based on what Zscaler, Inc. is hearing from customers operating large-scale SASE deployments, Zscaler, Inc. shipped two capabilities that make the platform even more valuable for customers. Here's what landed and why it matters. Remediation scripts: now available for ZDX Standard and Advanced. When dev tools don't pick up the ZIA root certificate from their expected path, developers hit SSL errors that block their workflow entirely. The common workaround today is to bypass those dev tools from ZIA SSL inspection. That gets developers back to work, but it punches a hole in the zero trust architecture. Traffic that should be inspected flows uninspected. The security posture the SASE platform is designed to enforce gets undermined at the endpoint level. Customers told Zscaler, Inc. this was one of their most persistent friction points: a recurring tension between developer productivity and maintaining zero trust coverage. They needed a way to fix the root cause, not route around it. Pre-written, ready-to-use scripts that resolve the root cert path issue and restore zero trust posture. Zscaler, Inc. has introduced 20 pre-written remediation scripts available to ZDX Standard and Advanced customers and will continue to add more. These scripts fix the ZIA root certificate path configuration in dev tools so they work properly through ZIA SSL interception, eliminating the need to bypass. The result: developers stay productive and traffic stays inspected. Zero trust stays intact. Because remediation runs through Zscaler Client Connector (the same agent already deployed for ZIA and ZPA), there's no additional deployment, no second agent, and no separate tool. IT identifies the issue in ZDX, runs the fix from the console, and the endpoint is back in compliance with the SASE policy. Here's how the remediation capabilities break down by tier: | Capability | STD / ADV | ADV+ | | Support custom scripts | | | | | | Import any type of prewritten script | | | | | | Import dev tool scripts | | | | | | Set parameters, confirmation popup & configurations | | | | | For decision-makers, this is a signal of where ZDX is headed: not just visibility into experience issues, but the ability to resolve them in a way that reinforces the security architecture rather than working against it. 19 global vantage points for synthetic monitoring (up from 6). Synthetic monitoring tells you whether applications and network paths are healthy before users report problems. But that signal is only representative if probes originate close to where users actually work. As its customer base expanded into more regions with hybrid and remote workforces, Zscaler, Inc. heard a consistent request: monitoring that reflects the geographies where their people sit, not just the geographies where its original probe infrastructure happened to be. When probes originate far from the user population, latency baselines skew, regional ISP issues take longer to surface, and the data becomes less useful for root-cause isolation or SLA reporting. 13 new cities across Americas, EMEA, and APAC. Zscaler, Inc. has expanded from 6 to 19 data centers for synthetic monitoring, adding 13 locations in major global cities: * Americas: New York, Los Angeles, Dallas, Atlanta * EMEA: London, Paris * APAC: Mumbai, Delhi, Chennai, Singapore, Tokyo, Osaka, Sydney These locations align with Zscaler's existing global data center footprint, which means synthetic probe data and real-user telemetry flowing through the SASE platform can be correlated in the same infrastructure. Synthetic baselines and live traffic data reinforce each other. Performance baselines that reflect real geography, and SLA confidence to match. What this unlocks in practice: * Representative performance baselines per region and office, derived from probes that originate locally rather than extrapolated from distant locations * Faster root-cause isolation because hop-by-hop tracing starts closer to where the issue lives * Monitoring that matches how global and hybrid workforces actually operate * SLA and experience reporting to leadership backed by geographically accurate data For practitioners, your synthetic test results now reflect what users in those cities actually experience. For leadership, the reports you present are grounded in local measurement, not inference. What's next. Both of these capabilities reinforce the same principle: the experience layer of a SASE platform should make the entire architecture more operationally complete. Remediation that restores zero trust posture. Monitoring that matches the global footprint the platform already serves. As ZDX continues to evolve, every capability Zscaler, Inc. ship is designed to strengthen the Zscaler platform, not just the monitoring console. Better detection, broader coverage, and faster resolution reduce operational friction across the entire SASE deployment. Want to see these in action? Schedule a personalized ZDX demo or explore the latest at zscaler.com/zdx FAQs. Was this post useful? Yes, very! Not really Disclaimer: This blog post has been created by Zscaler for informational purposes only and is provided "as is" without any guarantees of accuracy, completeness or reliability. Zscaler assumes no responsibility for any errors or omissions or for any actions taken based on the information provided. Any third-party websites or resources linked in this blog post are provided for convenience only, and Zscaler is not responsible for their content or practices. All content is subject to change without notice. By accessing this blog, you agree to these terms and acknowledge your sole responsibility to verify and use the information as appropriate for your needs.