Zscaler Q4: Beats Forecasts, AI Security Soars, Stock Dips

Zscaler reported fourth-quarter revenue of $898.2 million, surpassing Wall Street expectations. This marks a 25% increase year over year. Adjusted earnings reached $1.19 per share, also beating analyst estimates. The company narrowed its GAAP net loss to $3.4 million. Annual recurring revenue climbed 25% to $3.77 billion. CEO Jay Chaudhry attributes these gains to the adoption of their Zero Trust architecture, noting a 50% rise in AI security bookings. For fiscal year 2026, revenue rose 25% to over $3.3 billion, and adjusted net income grew to $704.2 million. However, ZS stock slipped about 1.8% after hours, even though it ended Thursday 3% higher. Investors are showing wariness about the stock's revenue growth compared to cybersecurity peers. Growth in high-value customers, those with over $1 million in annual recurring revenue, has also slowed. This information matters because it shows how Zscaler is performing in a competitive and evolving cybersecurity market driven by AI demand.