Zscaler Beats Q2 Estimates and Raises Full-Year Guidance on Strong AI Security Demand

summarizeSummary

Zscaler announced strong second-quarter fiscal 2026 results, surpassing revenue and profitability guidance, and raised its full-year fiscal 2026 outlook for ARR, revenue, non-GAAP operating income, and non-GAAP EPS.

check_boxKey Events

• Strong Q2 Fiscal 2026 Financial Performance

  Revenue grew 26% year-over-year to $815.8 million, and Annual Recurring Revenue (ARR) increased 25% year-over-year to $3,359 million. Non-GAAP diluted net income per share was $1.01, compared to $0.78 in the prior year.

• Raised Full-Year Fiscal 2026 Guidance

  The company increased its full-year fiscal 2026 guidance for ARR to $3.730 billion - $3.745 billion (24% growth), revenue to $3.309 billion - $3.322 billion (24% growth), non-GAAP operating income to $742 million - $748 million (28-29% growth), and non-GAAP diluted EPS to $3.99 - $4.02 (22-23% growth).

• Strategic Focus on AI Security and Acquisitions

  Zscaler highlighted robust demand across AI Security, Zero Trust Everywhere, and Data Security, and announced the acquisition of SquareX Holdings, Inc. to enhance Zero Trust browser security for the AI era. This follows prior acquisitions of Red Canary and SPLXAI Inc. for an aggregate of $692.0 million.

• Strong Cash Flow Generation

  Cash provided by operations increased 14% year-over-year to $204.1 million, and free cash flow grew 18% year-over-year to $169.1 million, demonstrating healthy operational efficiency.

auto_awesomeAnalysis

Zscaler reported robust second-quarter fiscal 2026 results, exceeding revenue and profitability expectations, and significantly raised its full-year fiscal 2026 guidance across all key financial metrics including Annual Recurring Revenue (ARR), total revenue, non-GAAP operating income, and non-GAAP diluted EPS. This strong performance, driven by increasing demand for AI security and Zero Trust solutions, indicates solid execution and a positive outlook for the company's growth trajectory. The strategic acquisitions and focus on AI-powered security position Zscaler favorably in a rapidly evolving cybersecurity landscape, suggesting continued momentum.