Zscaler, Inc. (ZS) Announced Q3 2026 Earnings on May 26, 2026, Reporting "Revenue of $850 million grew 25% year-over-year"

May 27, 2026 • 21:28 •Episode 191 • The Earnings Debate

Zscaler Inc. earnings call summary and podcast

Zscaler, Inc. reported financial results for the third quarter of fiscal 2026.

Revenue for the quarter was $850 million, growing 25 percent year-over-year.

Total annual recurring revenue was $3.5 billion, representing 25 percent year-over-year growth.

Non-GAAP operating income was $196 million, with a non-GAAP operating margin of 23 percent.

The company generated a free cash flow margin of 16 percent for the quarter and ended the period with $3.5 billion in cash, cash equivalents, and short-term investments.

Management emphasized the company's positioning as the cybersecurity platform for the AI era, highlighting the need to protect against new powerful frontier AI models like Mythos.

Zscaler announced its intent to acquire Symmetry Systems to integrate its Access Graph technology with the Zero Trust Exchange to help secure AI agents.

The company also noted new partnerships with Anthropic on Project Glasswing and with OpenAI as part of its Daybreak program.

Additionally, the company launched Project AI-Guardian with key global system integrator partners and saw strong momentum from its Z-Flex procurement program, which generated over $480 million in total contract value during the third quarter.

For the fourth quarter of fiscal 2026, Zscaler expects revenue of $875 million to $878 million and an operating profit of $206 million to $208 million.

For the full year fiscal 2026, management guided for revenue of $3.3295 billion to $3.3325 billion, and total annual recurring revenue of $3.740 billion to $3.749 billion.

Full year operating profit is expected to be $755 million to $757 million, with a free cash flow margin of 22.8 percent to 23.3 percent.

Management also provided an early look for fiscal 2027, projecting total annual recurring revenue and revenue growth of 16 percent to 17 percent, while noting they are taking a prudent approach to guidance following the departure of two sales leaders.