Zscaler posts solid Q3 with raised 2026 outlook despite after-hours sell-off
May 26, 2026, 4:46 PM EDT4 sourcesAI-analyzed
Why it may matterVerify against the original reporting
Despite beating on revenue and EPS and signaling higher 2026 targets, ZS issued softer Q4 revenue guidance and saw a sharp after-hours sell-off (~16.9%), indicating investors prioritized the near-term outlook. Historically, small revenue-beat with modest guidance can trigger 1–3 week volatility; longer-term upside depends on execution and AI-security demand durability.
AI summary
What happened, with direct paths to the underlying reporting
Zscaler topped Q3 expectations with revenue of $850.48M and adjusted EPS of $1.08, while ARR reached $3.53B. Cash flow remained robust, yet after-hours trading punished the stock as Q4 guidance was only modestly soft against consensus, even as full-year 2026 targets were raised. The AI-era Zero Trust SASE narrative remains the core growth thesis, suggesting upside if execution improves and sentiment stabilizes.
FY2026 revenue guidance raised to $3.330–$3.333B; adj EPS $4.10–$4.11.
Shares down ~16.85% after hours to about $153.50.
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