Zscaler (ZS) Q4 2026 earnings summary

Executive summary

• Achieved 25% year-over-year growth in both revenue and annual recurring revenue (ARR) for Q4 and full fiscal year 2026, with Q4 net new ARR up 24% and record non-GAAP operating margin of 24.3%.

• Strong momentum in AI security, Zero Trust Everywhere, and data security, with significant customer wins and expansion across Fortune 500 and Global 2000 enterprises.

• Security for AI bookings grew over 50% sequentially in Q4, and Z-Flex bookings exceeded $1.7 billion for the year.

• Platform adoption broadened beyond user-centric solutions to include branches, workloads, and AI agents, driving non-seat-based revenue growth.

• Net new ARR grew 24% in Q4, with notable contributions from non-seat-based solutions and record large-deal activity.

Financial highlights

• Q4 revenue was $898.2 million, up 25% year-over-year; full-year revenue reached $3.4 billion, up 25%.

• Total ARR ended at $3.8 billion, up 25% year-over-year; net new ARR was $246 million in Q4.

• Non-GAAP gross margin for Q4 was 80.2%, and operating income was $218 million, up 37% year-over-year.

• Q4 GAAP loss from operations was $15.5 million (2% of revenue); non-GAAP income from operations was $218.4 million (24% of revenue).

• Q4 free cash flow was $60.8 million (7% of revenue), down from $171.9 million (24%) a year ago, due to higher capex and internal software investments.

Outlook and guidance

• Fiscal 2027 revenue guidance: $3.908–$3.938 billion, up 16.6–17.5% year-over-year.

• ARR guidance for fiscal 2027: $4.396–$4.426 billion, up 16.6–17.4% year-over-year.

• Q1 2027 revenue expected at $935–$939 million, with gross margin around 80% and operating margin at 23%.

• FY27 non-GAAP income from operations projected at $924–$932 million (21% growth), with free cash flow margin of 23.0%–23.5%.

• Non-GAAP net income per share expected at $4.86–$4.90 for FY27, assuming 173 million diluted shares and a 21% tax rate.