ZS
Zscaler, Inc.232.78
+2.47+1.07%
Dec 16, 4:00:01 PM EST
Earnings Call Transcripts
This Quarter (Q1 '26)
No earnings call transcript available yet
Last Quarter (Q4 '25)
FY Q2 '26
Reaffirms script; adds organic, Red Canary color.
Q&A largely reaffirms the scripted beat-and-raise story, with management addressing Red Canary's elevated churn head-on while upping its FY26 ARR contribution to $130M on stronger renewals—yet organic net new ARR accelerates to 9.5% growth. Competition remains stable amid record Q2 pipeline conversion and $1M+ deals, as Zero Trust trumps SASE hype. AI sales cycles are faster and token-based, fueling non-seat upside; Zero Trust Everywhere delivers 2x-3x ARR lifts. Sales productivity will keep improving. Investors watch H2 organic momentum and AI agent traffic.
Key Stats
Market Cap
37.12BP/E (TTM)
-Basic EPS (TTM)
-0.26Dividend Yield
0%Recent Filings
8-K
Zscaler beats Q2, raises ARR guide
Zscaler crushed Q2 fiscal 2026 estimates with revenue up 26% to $815.8M and ARR up 25% to $3.359B, hitting record non-GAAP operating margins of 22%. Cash stayed strong at $3.513B despite $692M spent on Red Canary, SPLX, and SquareX buys. Raised full-year ARR guide to $3.73B-$3.745B, signaling durable AI-driven demand. Execution trumps macro noise.
10-Q
Q2 FY2026 results
Zscaler posted Q2 FY2026 revenue of $815.8M, up 26% y/y from $647.9M, with gross margin steady at 77%. Operating loss widened to $51.8M from $40.1M on steeper sales/marketing and R&D ramps, while net loss hit $34.3M or $(0.21) per share versus $(0.05), reconciled to 159.7M diluted shares. Cash from operations topped $652.4M YTD, yielding $582.4M free cash flow (derived); cash and equivalents fell to $1.2B after $673M tuck-ins like Red Canary (Aug 2025, $651M cash, $545M goodwill, $153M intangibles over 5-7 years) and SPLXAI (Oct 2025, $41M cash, $39M goodwill). $1.7B in 0% 2028 Notes due 2028 outstanding. Channel partners drove 84% of sales. Intense competition pressures pricing and share.
8-K
Annual meeting votes refresh board
Zscaler stockholders at the January 12, 2026 annual meeting elected Andrew Brown, Scott Darling, and David Schneider as Class II directors until 2028. They ratified PwC as auditors for fiscal 2026, approved executive pay annually, and backed a non-binding proposal to declassify the board—67M for vs 63M against. Governance shifts ahead.
10-Q
Q1 FY2026 results
Zscaler posted Q1 FY2026 revenue of $788.1M, up 26% y/y from $628.0M, with gross margin steady at 77%; operating loss widened to $(36.4M) from $(30.7M) on steeper sales/marketing and R&D investment, yet net loss narrowed to $(11.6M) or $(0.07) per diluted share from $(12.1M) or $(0.08), reconciling to 158.6M weighted shares. Cash from operations hit $448.3M, yielding free cash flow of $413.3M after $34.9M capex (52% margin), despite a $1.1B cash drop to $1.3B plus $2.0B short-term investments, fueled by $673M net outlay for Red Canary (Aug 2025, $651M cash, $545M goodwill, $152M intangibles over 5-7 years) and SPLXAI (Oct 2025, $41M cash, $32M goodwill). U.S. drove 54% of revenue via 85% channel sales. Debt stands at $1.7B 0% 2028 Notes. Intense competition pressures margins.
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