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Zscaler to Accelerate Innovation in AI-Powered Security Operations with Acquisition of Red Canary

1. Zscaler is acquiring Red Canary for enhanced cybersecurity capabilities. 2. Red Canary's expertise accelerates threat detection and response with automation. 3. The combined entity aims to redefine security operations using AI. 4. Zscaler protects 45% of Fortune 500, enhancing its market leadership. 5. The acquisition is expected to close in August 2025, pending approvals.

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Why Bullish?

The acquisition enhances Zscaler's capabilities in a growing market, following successful integration trends seen in other cybersecurity firms, like Crowdstrike acquiring Humio, which resulted in a notable uptick in enterprise value post-merger.

How important is it?

This acquisition is crucial for Zs's future growth and market expansion, suggesting positive price movements depending on successful integration.

Why Long Term?

The strategic integration can strengthen Zscaler's position and revenue base in the long run, similar to how Palo Alto Networks grew after its acquisitions of Demisto and others that expanded its security portfolio.

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SAN JOSE, Calif., May 27, 2025 (GLOBE NEWSWIRE) -- Zscaler, Inc. (NASDAQ: ZS), the leader in cloud security, today announced it has signed a definitive agreement to acquire Red Canary, a recognized leader in Managed Detection and Response (MDR). With over 10 years of expertise in security operations (SecOps), Red Canary has enabled its extensive customer base to investigate threats up to 10 times faster1 with 99.6% accuracy, while streamlining workflows through automated remediation. Combined with Zscaler’s massive amounts of high-quality data—derived from the world's largest security cloud—and global intelligence from its ThreatLabz Security Research team, the combination will deliver a unified, agentic Security Operations Center (SOC) that combines AI-driven workflows with human expertise. These complementary capabilities will redefine how businesses detect, respond to, and mitigate modern cyber threats. “With our innovative AI-powered risk management services like Risk360 and the acquired data fabric technology from Avalor, we are disrupting legacy security operations just like we did with our Zero Trust ExchangeTM platform,” said Jay Chaudhry, CEO, Chairman, and Founder of Zscaler. “The proposed acquisition of Red Canary is a natural expansion of our capabilities into managed detection and response and threat intelligence to accelerate our vision of AI-powered SOC of the future. By integrating Red Canary with Zscaler, we will deliver to our customers the power of a fully integrated Zero Trust platform and AI-powered security operations.” Protecting nearly 45% of the Fortune 500 organizations, Zscaler has established over 15 years of leadership operating the world's largest cloud security platform which processes over 500 billion daily transactions. It has leveraged its massive, high-quality data lake to accelerate the development of advanced AI-driven solutions, like Zscaler Digital Experience (ZDX) and Zscaler Exposure Management. A proven innovator in MDR, Red Canary has been recognized as a Leader in the Forrester Wave™: Managed Detection and Response for the third consecutive year and featured in the Gartner® Market Guide for MDR for the seventh year in a row. Within the SOC, Red Canary plays a crucial role by helping security teams automate remediation workflows, resulting in greater efficiency and improved security outcomes. By bringing together Zscaler’s AI-powered Zero Trust platform with Red Canary’s domain expertise in threat detection and response—spanning endpoints, identity, network, and cloud workloads—this transaction is uniquely positioned to address the operator pain points that often lead to missed signals, incomplete threat analysis, and increased vulnerability to undetected threats. The integration of Zscaler and Red Canary will better enable security teams to detect, triage, investigate, and respond to threats with greater speed and efficiency, helping organizations confidently and precisely tackle modern security challenges. “For over 10 years, we’ve protected our customers by combining high-fidelity signals with agentic AI, behavioral analytics, and global threat intelligence—delivering fast, accurate, and high-quality threat detection and response,” said Brian Beyer, CEO of Red Canary. “As part of Zscaler, we will elevate how IT and security teams address the rapidly shifting threat landscape with the strength of our combined technology and expertise. Zscaler’s global scale and reach provide the resources and granular data needed to fuel advanced AI, threat intelligence, and detection engineering, giving us a broader view of adversary behavior while enabling faster innovation across the board. Both companies share a relentless commitment to quality, execution, and delivering exceptional outcomes for our customers.” The acquisition is subject to customary closing conditions, including regulatory approvals, and is expected to close in August 2025. ________________1 10x faster on average compared to traditional security approaches Forward-Looking Statements This press release contains forward-looking statements that are based on our management's beliefs and assumptions and on information currently available to our management. These forward-looking statements include the expected benefits and impacts of the proposed acquisition. These forward-looking statements are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995. A significant number of factors could cause actual results to differ materially from statements made in this press release, including those factors related to our ability to successfully integrate Red Canary technology into our cloud platform and our ability to retain key employees of Red Canary after the acquisition. Additional risks and uncertainties are set forth in our most recent Annual Report on Form 10-Q filed with the Securities and Exchange Commission (“SEC”) on March 10, 2025, which is available on our website at ir.zscaler.com and on the SEC's website at www.sec.gov. Any forward-looking statements in this release are based on the limited information currently available to Zscaler as of the date hereof, which is subject to change, and Zscaler will not necessarily update the information, even if new information becomes available in the future. About Zscaler Zscaler (NASDAQ: ZS) accelerates digital transformation so customers can be more agile, efficient, resilient, and secure. The Zscaler Zero Trust Exchange protects thousands of customers from cyberattacks and data loss by securely connecting users, devices, and applications in any location. Distributed across more than 150 data centers globally, the SASE-based Zero Trust Exchange is the world’s largest in-line cloud security platform. Zscaler™ and the other trademarks listed at https://www.zscaler.com/legal/trademarks are either (i) registered trademarks or service marks or (ii) trademarks or service marks of Zscaler, Inc. in the United States and/or other countries. Any other trademarks are the properties of their respective owners. Media Contact:Pavel Raddapress@zscaler.com Investor Relations Contact:Ashwin Kesireddyir@zscaler.com

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