Live Earnings: Complete Zscaler (ZS) Coverage

"Management framed the last quarter as a strong start to the fiscal year, citing 26% ARR growth, 35% RPO growth, and a 52% free cash flow margin. The setup matters because Zscaler is trying to prove it can compound at scale while funding an aggressive product expansion cycle across AI security, data security, and Zero Trust Everywhere."

"Management said AI Security grew over 80% year over year, exceeded its FY26 $400M ARR target three quarters early, and is now expected to surpass $0.5B ARR by fiscal year-end. The key issue this quarter is mix and sustainability. Investors will want to hear whether demand is broadening from visibility into GenAI apps toward higher-value, in-line guardrails and runtime controls."

"Z-Flex generated over $175M in TCV and grew over 70% sequentially, with management arguing it reduces procurement friction and supports larger multi-module commitments. If Z-Flex keeps scaling, it can improve forward visibility and deepen platform penetration."

Zscaler reports strong fiscal performance with 26% ARR growth, 35% RPO growth, and 52% free cash flow margin, establishing a robust foundation for the current fiscal year. The company is executing an aggressive product expansion strategy across AI Security, data security, and Zero Trust Everywhere initiatives. AI Security achieved over 80% year-over-year growth and surpassed its $400M ARR target three quarters early, now targeting $0.5B ARR by fiscal year-end. Zero Trust Everywhere has already exceeded 450 enterprise customers, hitting fiscal 2026 goals ahead of schedule. Z-Flex generated over $175M in total contract value with 70% sequential growth, reducing procurement friction and enabling larger multi-module commitments. Key investor focus areas include AI Security mix sustainability, core customer migration to broader platform bundles, and Z-Flex's ability to improve forward visibility and deepen platform penetration.

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