Zscaler shares advanced ~7% after DA Davidson initiated coverage with Neutral and a $215 target, while Nvidia unveiled OpenShell integration with Zscaler to bolster AI-agent security. The company reaffirmed its FY2027 guidance, signaling durable ARR growth amid AI tailwinds and enterprise security spending. The setup combines positive sentiment, strategic partnerships, and solid fundamentals that could sustain upside in the near term.
Zscaler delivered a stronger-than-expected Q4 with EPS of $1.19 and revenue of $898.2M, and annual recurring revenue rose 25% to $3.77B. Excluding the Red Canary acquisition, ARR growth remained robust at 20% with $246M in net new ARR. The company also posted a record 24% non-GAAP operating margin and issued higher guidance for Q1 and FY27, highlighting AI-driven security applications as a key growth vector.
Zscaler is set to report Q4 FY2026 results with emphasis on FY27 guidance, ARR trajectory, and margin outlook. ARR rose 25% last quarter (21% ex-Red Canary) and the company posted a 23% non-GAAP operating margin, while Zero Trust Everywhere surpassed 700 customers, underscoring AI-related demand. Guidance clarity will determine near-term stock direction.
Zscaler posted a Q3 beat on earnings and revenue but issued guidance for 2027 ARR growth of 16–17%, below Street expectations. The quarterly results included leadership turnover and higher capex, contributing to a >30% stock drop. Management remains confident in cybersecurity demand and AI-related opportunities, though investors will scrutinize ARR trajectory and cost structure over the next several quarters.
Zscaler forecast Q4 revenue below estimates, reflecting intensified competition in the cloud-security market as enterprises reassess spending. The weak guidance triggered a roughly 15% after-hours drop, underscoring near-term growth and margin concerns. Investors will closely watch pipeline visibility and margin resilience for near-term downside vs. longer-term recovery.
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.
