Zscaler (ZS) Q3 2026 earnings summary

Executive summary

• Revenue grew 25%-26% year-over-year in Q3 FY26 and for the nine months ended April 30, 2026, driven by AI adoption, Zero Trust SASE solutions, and expanded subscriptions from new and existing customers.

• Non-GAAP operating margin reached a record 23%, while net loss widened to $59.8 million for the nine months due to increased investments in sales, marketing, and R&D.

• Platform expanded to secure users, branches, workloads, IoT/OT devices, and AI agents, with notable acquisitions and partnerships.

• Closed record number of $1M+ ARR deals, robust cloud marketplace growth, and strong customer expansion.

• Completed three acquisitions (Red Canary, SquareX, SPLXAI) and announced intent to acquire Symmetry Systems to enhance AI and security capabilities.

Financial highlights

• Q3 FY26 revenue was $850.5M (up 25% YoY); nine-month revenue was $2,454.3M (up 26% YoY).

• ARR reached $3.525B, up 25% YoY; net new ARR was $166M, up 24% YoY.

• Non-GAAP gross margin was 80.7%-81%; non-GAAP operating income grew 34% to $196M.

• Free cash flow margin was 16% for Q3 and 29% for the nine months; free cash flow for nine months was $718.4M.

• Ended Q3 with $3.5B in cash and equivalents, $1.7B in debt.

Outlook and guidance

• Q4 FY26 revenue expected at $875M-$878M (22% YoY growth), non-GAAP operating profit $206M-$208M.

• Full-year FY26 guidance: revenue $3.3295B-$3.3325B (24.6%-24.7% YoY), ARR $3.74B-$3.749B (24% YoY), non-GAAP EPS $4.10-$4.11.

• Free cash flow margin for FY26 revised to 22.8%-23.3% due to higher CapEx.

• Fiscal 2027 early outlook: ARR and revenue growth of 16%-17%.

• CapEx as a percentage of revenue expected to rise to high single digits in FY26 and up to 200 bps in FY27.