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Presentations reinforce Zscaler's growth plans and its position as the cybersecurity platform for the AI era SANTA CLARA, Calif., Oct. 06, 2026 (GLOBE NEWSWIRE) -- Zscaler, Inc. (Nasdaq: ZS), the cybersecurity platform for the AI era, is hosting its 2026 Investor Day today in New York City. In conjunction with its Investor Day, Zscaler reaffirmed its financial guidance for the first quarter and full fiscal year 2027. "As AI forces every enterprise to rethink their approach to security, the value of our Zero Trust architecture is becoming increasingly clear," said Jay Chaudhry, CEO, Chairman, and Founder of Zscaler. "The agentic AI era is quickly becoming the most significant opportunity in our company's history. Our Zero Trust platform was purpose-built to solve the challenges customers face today – protecting against AI-driven threats, securing data everywhere, and enabling the secure deployment of AI – by hiding the attack surface and preventing lateral movement. Backed by a powerful customer growth flywheel, we have multiple growth engines that we believe will enable us to capitalize on AI tailwinds and drive Zscaler towards achieving our $10 billion ARR target." At its Investor Day, Zscaler executives will discuss the company's strategy, platform innovation, go-to-market priorities, and long-term growth drivers. Featured Zscaler executives include: - Jay Chaudhry, CEO, Chairman, and Founder - Kevin Rubin, Chief Financial Officer - Adam Geller, Chief Product Officer - Ross Tackett, Chief Revenue Officer - Dhawal Sharma, Executive Vice President, AI & Data Security Reaffirms First Quarter and Full year Fiscal 2027 Guidance Zscaler reaffirmed its first quarter and full year fiscal 2027 guidance, previously provided on Sept. 3, 2026. For the first quarter of fiscal 2027, the company expects: - Revenue of $935 million to $939 million, approximately 19% year-over-year growth. - Non-GAAP gross margin of approximately 80% - Non-GAAP income from operations of $215 million to $217 million, approximately 25% to 26% year-over-year growth, representing a 23% operating margin. - Non-GAAP net income per share of approximately $1.15 to $1.16, assuming approximately 170 million fully diluted shares outstanding and a non-GAAP tax rate of 21%. For the full year fiscal 2027, the company expects: - ARR of $4.396 billion to $4.426 billion, growth of approximately 16.6% to 17.4%. - Revenue of approximately $3.908 billion to $3.938 billion, growth of 16.6% to 17.5%. - Non-GAAP gross margin of approximately 80% - Non-GAAP income from operations of $924 million to $932 million, growth of approximately 21%. - Non-GAAP net income per share of $4.86 to $4.90, assuming approximately 173 million fully diluted shares outstanding and a non-GAAP tax rate of 21%. - Free cash flow margin of approximately 23.0 to 23.5%. Guidance for non-GAAP income from operations and non-GAAP net income per share exclude, as applicable, stock-based compensation expense and related employer payroll taxes, amortization expense of acquired intangible assets and amortization of debt issuance costs. We have not reconciled our expectations of non-GAAP income from operations and non-GAAP net income per share to their most directly comparable GAAP measures because certain items are out of our control or cannot be reasonably predicted. For those reasons, we are also unable to address the probable significance of the unavailable information, the variability of which may have a significant impact on future results. Accordingly, a reconciliation for the guidance for non-GAAP income from operations and non-GAAP net income per share is not available without unreasonable effort. Investor Day: How to Participate The half-day event can be viewed live at https://ir.zscaler.com/events/event-details/zscaler-investor-day-2026. A replay will be available on Zscaler's Investor Relations website shortly after the event ends. Forward-Looking Statements This press release contains forward-looking statements that involve risks and uncertainties, including, but not limited to, statements regarding our ability to capture opportunities related to AI and our future financial and operating performance, including our financial outlook for the first quarter of fiscal 2027 and full year fiscal 2027. There are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including but not limited to: macroeconomic influences and instability, geopolitical events, operations and financial results and the economy in general; risks related to the use of AI in our platform; our ability to identify and effectively implement the necessary changes to address execution challenges; risks associated with managing our rapid growth, including fluctuations from period to period; our limited experience with new products and subscription and support introductions and the risks associated with new products and subscription and support offerings, including the discovery of software bugs; our ability to attract and retain new customers; the failure to timely develop and achieve market acceptance of new products and subscriptions as well as existing products and subscriptions and support; rapidly evolving technological developments in the market for network security products and subscription and support offerings and our ability to remain competitive; length of sales cycles; useful lives of our assets and other estimates; and general market, political, economic and business conditions. Additional risks and uncertainties that could affect our financial results are included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" set forth from time to time in our filings and reports with the Securities and Exchange Commission ("SEC"), including our Annual Report on Form 10-K for the fiscal year ended July 31, 2026, filed on September 3, 2026, as well as future filings and reports by us, copies of which are available on our website at ir.zscaler.com and on the SEC's website at www.sec.gov. You should not rely on these forward-looking statements, as actual outcomes and results may differ materially from those contemplated by these forward-looking statements as a result of such risks and uncertainties. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we do not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made. About Zscaler Zscaler (NASDAQ: ZS) is the pioneer and global leader in zero trust security and the cybersecurity platform for the AI era. The world's largest businesses, critical infrastructure organizations, and government agencies rely on the Zscaler Zero Trust Exchange™ to secure their users, devices, workloads, and AI agents, protect their data, and safely adopt AI, all on one unified platform. Distributed across 200+ data centers and inspecting more than 750 billion transactions a day, Zscaler blocks billions of threats while reducing cost and complexity for the modern enterprise. Investor Relations Contacts Kim Watkins SVP, Investor Relations & Strategic Finance [email protected] Nick Gonzalez Director, Media Relations [email protected]

Zscaler’s net new ARR growth (excluding Red Canary) accelerated to 17% year over year in the fiscal fourth quarter, the fastest pace in years, yet FY27 guidance points to that growth cooling back down toward the high teens or lower. Deferred revenue, an independent forward indicator of billings, has decelerated every year since FY22, falling from 62% growth to just 18.5% in FY26, the first year it has grown slower than revenue itself. Free cash flow margin dropped nearly 500 basis points in FY26 to 25.4%, and management’s FY27 guide points lower still, as data center capex tied to memory and component shortages outpaces revenue growth. Zscaler’s NTM price to earnings multiple has already fallen to about 40x from a four year average near 64x and highs above 100x, meaning much of this slower growth story appears priced in before FY27 even begins. Zscaler (ZS) closed fiscal 2026 with a genuinely strong quarter. Revenue hit $898.2 million, up 25% year over year, and total ARR reached $3.8 billion, also up 25%. Buried inside that print was a more specific number that excited analysts on the call: net new ARR, excluding the Red Canary acquisition, grew 17% year over year in the fourth quarter, up from 10% in the first half of the year and just 7% for all of fiscal 2025. Management framed this as evidence its sales reorganization, an account-focused model built around CRO Mike Rich, was finally working. Then came the FY27 guide. Analyst Ittai Kidron did the math live on the Q4 earnings call and noted that the midpoint of Zscaler’s ARR guidance implies net new ARR growth cooling to roughly 4%, a sharp reversal from the 17% just posted. CFO Kevin Rubin attributed the caution to timing around two sales leadership transitions and unproven uptake of newer products. Deferred revenue offers a way to test that explanation that does not depend on management’s own framing. It is the amount customers have already been billed but Zscaler has not yet recognized as revenue, and it tends to move with underlying bookings rather than with revenue recognition schedules. Total deferred revenue growth has slowed every single year since FY22: 62% growth that year, then 41%, then 32%, then 30%, and just 18.5% in FY26. That FY26 rate is now below Zscaler’s own 25% revenue growth for the year, the first time that has happened in this data, and it sits close to the 16.6% to 17.5% revenue growth Zscaler has guided for FY27. The billings trend was already cooling before management ever put a number on paper. One wrinkle is worth flagging. Non-current deferred revenue, the longer-duration portion tied to multiyear commitments, grew just 7.7% in FY26 after growing 65% in FY25, even as Zscaler touted a record $1.7 billion in Z-Flex bookings this year. That likely reflects Z-Flex contracts being billed annually rather than in a single upfront invoice, which would keep them out of the non-current line regardless of deal size. It means the multiyear commitment story cannot be verified through this line item alone. Zscaler’s headline profitability numbers looked strong in FY26. Non-GAAP operating margin reached 22.9% for the year, up 120 basis points, and management called out record operating income. Free cash flow tells a different story. It grew from $808.2 million in FY25 to $852.4 million in FY26, an increase of just 5.5%, a fraction of the 25% revenue growth over the same period. FCF margin fell from 30.2% to 25.4%, a decline of nearly 500 basis points in a single year. Management’s explanation is capital expenditure. Kevin Rubin said memory, storage, and processor prices have risen and become harder to source, and Zscaler opportunistically accelerated data center equipment purchases in Q4 where supply was available. Full year capex reached 8% of revenue, at the high end of what the company had flagged, and Rubin said capex would stay elevated through FY27 because of continued pricing pressure, especially in memory. The FY27 free cash flow margin guide of 23% to 23.5% sits below the 25.4% actually delivered in FY26, meaning management expects further compression, not stabilization. An operating margin that is expanding while cash conversion degrades is worth separating from the headline profitability narrative before taking it at face value. None of this is happening in a valuation vacuum. Zscaler’s NTM price to normalized earnings multiple currently sits at roughly 40x, well below its four year mean of about 64x and far under the highs above 100x it touched in late 2024. The stock has already been repriced down from those peaks over the course of 2025 and 2026, a period that overlaps almost exactly with the deceleration in deferred revenue growth described above. That timing matters for how an investor should read the FY27 guidance reaction. Citi analyst Fatima Boolani captured the bear case directly on stage in September, telling Chaudhry that some investors believe the best part of Zscaler’s product cycle sits behind it. A stock still trading near its historical average multiple would make that bear case costly to dismiss. A stock that has already shed more than a third of its peak multiple has, at minimum, made room for a more sober growth outlook without requiring a fresh catalyst just to hold its ground. Insider selling adds context rather than alarm here. CFO Kevin Rubin sold roughly 500 shares in both July and August 2026 in the $145 to $176 range, and director James Beer sold 177 shares in September near $192, all routine-sized transactions rather than the kind of concentrated liquidation that typically signals executive concern. The evidence points to a real slowdown, not simply a conservative guide dressed up as caution. Deferred revenue growth has been decelerating for four straight years and now trails revenue growth outright, and free cash flow margin is compressing on a capex cycle management says will persist through FY27. Both are measurable trends independent of anything management said on the call, and both point in the same direction as the guidance itself. What keeps this from being a clean bearish call is the pricing. A multiple that has already fallen from triple digits to the low 40s has absorbed a meaningful part of this story. The genuine swing factor for FY27 is whether Zscaler’s newer, not-yet-guided-for growth lines close the gap: security for AI bookings rose 50% sequentially in Q4 with trailing 12 month bookings above $100 million, and the newly launched Agentic SecOps platform is unproven at scale but addresses a real customer need Zscaler’s own telemetry is well positioned to serve. Zscaler pulled off a similar expansion before, growing Zero Trust Everywhere customers from roughly 350 to 950 in a single year. Whether it can repeat that with AI security products, while a new geo sales leader still onboards, is the open question that will decide whether FY27 undershoots or beats a guide that, unlike the market’s initial reaction suggested, is not obviously sandbagged. The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question. Pull up ZS stock and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down. You can build a free watchlist to track Zscaler, Inc. alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.

The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Zscaler (NASDAQ:ZS) and the rest of the cybersecurity stocks fared in Q2. Cybersecurity continues to be one of the fastest-growing segments within software for good reason. Almost every company is slowly finding itself becoming a technology company and facing rising cybersecurity risks. Businesses are accelerating adoption of cloud-based software, moving data and applications into the cloud to save costs while improving performance. This migration has opened them to a multitude of new threats, like employees accessing data via their smartphone while on an open network, or logging into a web-based interface from a laptop in a new location. The 9 cybersecurity stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 1.7% while next quarter’s revenue guidance was 0.9% above. Luckily, cybersecurity stocks have performed well with share prices up 14.9% on average since the latest earnings results. Pioneering the "zero trust" approach that has fundamentally changed enterprise network security, Zscaler (NASDAQ:ZS) provides a cloud-based security platform that connects users, devices, and applications securely without traditional network-based security hardware. Zscaler reported revenues of $898.2 million, up 24.9% year on year. This print exceeded analysts’ expectations by 2.4%. Overall, it was a strong quarter for the company with EPS guidance for next quarter exceeding analysts’ expectations and full-year EPS guidance exceeding analysts’ expectations. “AI represents one of the most significant opportunities in Zscaler's history. By connecting users, workloads, branches, and now agents directly to the applications they need without placing them on the network, we are uniquely equipped to help companies both combat the threats created by agentic AI and securely deploy AI agents and models,” said Jay Chaudhry, CEO, Chairman and Founder of Zscaler. “Our continued innovation across Zero Trust SASE, Agentic SecOps, Data Security, and Security for AI is driving increased platform adoption and creating new avenues for growth, as reflected in our strong Q4 results. As AI becomes foundational to how organizations operate, we are well positioned to extend our leadership as the cybersecurity platform for the AI era.” Zscaler pulled off the biggest analyst estimate beat of the whole group. Unsurprisingly, the stock is up 8.7% since reporting and currently trades at $193.25. We think Zscaler is a good business, but is it a buy today? Read our full report here, it’s free. Originally developed to address the growing complexity of IT security in the cloud era, Qualys (NASDAQ:QLYS) provides a cloud-based platform that helps organizations identify, manage, and protect their IT assets from cyber threats across on-premises, cloud, and mobile environments. Qualys reported revenues of $182.2 million, up 11% year on year, outperforming analysts’ expectations by 2%. The business had an exceptional quarter with an impressive beat of analysts’ billings estimates and a solid beat of analysts’ adjusted operating income estimates. The market seems happy with the results as the stock is up 14% since reporting. It currently trades at $183.58. Is now the time to buy Qualys? Access our full analysis of the earnings results here, it’s free. Built on the principle of "fighting machine with machine," SentinelOne (NYSE:S) provides an AI-powered cybersecurity platform that autonomously prevents, detects, and responds to threats across endpoints, cloud workloads, and identity systems. SentinelOne reported revenues of $292 million, up 20.6% year on year, exceeding analysts’ expectations by 0.6%. Still, it was a slower quarter as it posted full-year EPS guidance missing analysts’ expectations significantly and EPS guidance for next quarter missing analysts’ expectations significantly. SentinelOne delivered the weakest performance against analyst estimates among its peers. The company added 13 enterprise customers paying more than $100,000 annually to reach a total of 1,715. Interestingly, the stock is up 3.4% since the results and currently trades at $23.49. Read our full analysis of SentinelOne’s results here. Founded in 2005 by security visionary Nir Zuk who sought to reimagine firewall technology, Palo Alto Networks (NASDAQ:PANW) provides AI-powered cybersecurity platforms that protect organizations' networks, clouds, and endpoints from sophisticated threats. Palo Alto Networks reported revenues of $3.41 billion, up 34.4% year on year. This number beat analysts’ expectations by 1.7%. It was a strong quarter as it also put up EPS guidance for next quarter exceeding analysts’ expectations and full-year EPS guidance beating analysts’ expectations. Palo Alto Networks delivered the highest guidance raise, fastest revenue growth, and highest full-year guidance raise in the group. The stock is up 3.6% since reporting and currently trades at $375.26. Read our full, actionable report on Palo Alto Networks here, it’s free. Named after the meteorological measurement for cloud cover, Okta (NASDAQ:OKTA) provides cloud-based identity management solutions that help organizations securely connect their employees, partners, and customers to the right applications and services. Okta reported revenues of $805 million, up 10.6% year on year. This result topped analysts’ expectations by 1.5%. Overall, it was a strong quarter as it also recorded an impressive beat of analysts’ billings estimates and a solid beat of analysts’ adjusted operating income estimates. The stock is up 41.8% since reporting and currently trades at $190.61. Read our full, actionable report on Okta here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

CrowdStrike (CRWD) added $333 million of net new annual recurring revenue in fiscal Q2 2027, a record and 51% more than a year earlier. That figure is the case for a stock at its 52-week high, up 117% over the past year. It is also the number to worry about. At 44.5 times sales, the price looks built on that pace, and the company's own guide for fiscal Q3 2027 calls for a slower one. CrowdStrike Is Still Speeding Up Quarter by quarter, growth is picking up. Revenue growth accelerated for the fifth consecutive quarter, to 26%, in fiscal Q2 2027. The Falcon platform began as endpoint security, and management says much of its customers' AI is consumed on the endpoint. Since April, when new AI models made security a necessity for AI adoption, customers have been buying protection for AI agents on the endpoint. AIDR, its AI detection and response product, nearly tripled its ending ARR from fiscal Q1 2027. Falcon Flex, a subscription covering several Falcon products at once, is how the company sells. CrowdStrike added more than 935 Flex accounts in fiscal Q2 2027, more than in the prior three quarters combined. But The Price Looks Built On That Record Quarter A multiple of 44.5 times sales likely assumes the acceleration keeps going, and fiscal Q2 2027 made that case. Management had guided net new ARR growth of 28 to 29% for fiscal Q2 2027 and delivered 51%, beating the top of its range by more than $45 million. Was that beat demand pulled forward by the rush to secure AI, or a lasting step up? Management says lasting, pointing to a record pipeline for fiscal Q3 2027 and a fiscal 2027 net new ARR outlook it has now raised twice. And CrowdStrike's Own Guide Calls For Slower For fiscal Q3 2027, management guided net new ARR from $343 million to $347 million, up 29 to 31% year over year. That would be a new dollar record and a step down in growth from the 51% of fiscal Q2 2027. Management calls its guidance prudent, and the fiscal Q2 2027 guide looked the same before the company beat it. The scare is the gap between that guide and the price. A quarter that only meets the guide would be good for the business, and the first sign the 51% pace may not hold. That leaves little cushion. How Worried Should You Be At 44.5 Times Sales? Not about the business. Revenue, net new ARR, and the Falcon Flex base are all accelerating, and AIDR runs on the sensor customers already have. Worry about the price. The stock has more than doubled over the past year, and options are braced: implied volatility sits in the 88th percentile of its one-year range, pricing an unusually large move. Fiscal Q3 2027 changes the read. New recurring revenue above $347 million would be another dollar record, but growth at that level is about 31%, well short of the 51% pace. Only a result near $400 million would say that pace is lasting. A result inside the guided range would reopen the pull-forward question. Before then, see how large a move the options market is pricing for CRWD. Do You Keep Holding CrowdStrike At The High? Perhaps, if you would still want the shares after a quarter that only met the guide. That is a hard test on one name and harder across every AI name priced the same way. If you would rather not run it stock by stock, the Trefis High Quality Portfolio holds quality businesses chosen on results rather than on a story. That portfolio has a track record of outpacing the three major indices.

NEW YORK, Sept. 14, 2026 /PRNewswire/ -- Fred Alger Management, LLC ("Alger"), a privately held growth equity investment manager, today announced the quarterly rebalancing of the Alger Russell Innovation Index ("Index"). Following the close of trading on Friday, September 18, 2026, the Index will be rebalanced, and the following changes will be effective. For additional information, please visit www.lseg.com. Unlock Your Growth Potential with AlgerFounded in 1964, Alger is recognized as a pioneer of growth-style investment management. Privately-owned and headquartered in New York City, Alger can help "Unlock Your Growth Potential" through a suite of growth equity separate accounts, mutual funds, ETFs, and privately offered investment vehicles. Alger's investment philosophy, discovering companies undergoing Positive Dynamic Change, has been in place for more than 60 years. For more information, please visit www.alger.com. Risk Disclosures: Investing in the stock market involves risks, including the potential loss of principal. Growth stocks may be more volatile than other stocks as their prices tend to be higher in relation to their companies' earnings and may be more sensitive to market, political, and economic developments. This material is not meant to provide investment advice and should not be considered a recommendation to purchase or sell securities. Alger pays compensation to third party marketers to sell various strategies to prospective investors. London Stock Exchange Group plc and its group undertakings (collectively, the "LSE Group"). © LSE Group 2026. FTSE Russell is a trading name of certain of the LSE Group companies. "FTSE®" "Russell®", "FTSE Russell®" are trade marks of the relevant LSE Group companies and are used by any other LSE Group company under license. All rights in the FTSE Russell indexes or data vest in the relevant LSE Group company which owns the index or the data. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication. No further distribution of data from the LSE Group is permitted without the relevant LSE Group company's express written consent. The LSE Group does not promote, sponsor or endorse the content of this communication. View original content to download multimedia:https://www.prnewswire.com/news-releases/alger-russell-innovation-index-updates-for-third-quarter-2026-302877884.html

Image source: The Motley Fool. Thursday, Sept. 3, 2026 at 4:30 p.m. ET SVP, Investor Relations and Strategic Finance - Kim Watkins Chairman and CEO - Jay Chaudhry Chief Financial Officer - Kevin Rubin Operator: Good day, and thank you for standing by. Welcome to the Zscaler Fourth Quarter 2026 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Kim Watkins, SVP, Investor Relations and Strategic Finance. Kimberly Watkins: Good afternoon, and thank you for joining us today. Welcome to Zscaler's Fourth Quarter Fiscal 2026 Earnings Conference Call. On the call with me today are Jay Chaudhry, Chairman and CEO; and Kevin Rubin, CFO. Please note that we posted our earnings release, shareholder letter and a supplemental financial schedule to our Investor Relations website. Unless otherwise noted, all numbers we talk about today will be on an adjusted non-GAAP basis. You will find a reconciliation of GAAP to the non-GAAP financial measures in our earnings release. Before we get started, I'd like to remind you that today's discussion will contain forward-looking statements, including, but not limited to, the company's anticipated future revenue, annual recurring revenue, net new annual recurring revenue, operating margin, gross margin, operating profit, net other income, earnings per share and free cash flow margin, our customer response to our products, our expectations regarding AI and its impact on our business and customers and our market share and market opportunity and our objectives and outlook. These statements and other comments are not guarantees of future performance, but rather are subject to risk and uncertainty, some of which are beyond our control. These forward-looking statements apply as of today, and you should not rely on them as representing our views in the future. We undertake no obligation to update these statements after this call. For a more complete discussion of the risks and uncertainties, please see our filings with the SEC as well as in today's earnings release. I also want to inform you that we'll be attending the following conferences this quarter: Citi 2026 Global TMT Conference on September 9; Goldman Sachs Communacopia and Technology Conference on September 9; Wolfe Research TMT Conference 2026 on September 9; and JPMorgan 2026 Software Forum on October 1. And with that, I'll turn the call over to Jay. Jagtar Chaudhry: Thank you, Kim. Good afternoon, everyone. We delivered a strong finish to the fiscal year with 25% ARR growth and a non-GAAP operating margin of 24%. We are seeing significant positive trends in net new ARR with growth, excluding Red Canary, accelerating to 17% in Q4. These results reflect increasing market adoption of our Zero Trust platform. AI is quickly becoming the largest tailwind we have ever seen driving demand for our Zero Trust everywhere, data security and security for AI solutions. Our customers are relying on us to both combat the threats created by Agentic AI and safely deploy AI agents and models at scale. Since our last earnings call, new AI models have become more powerful, more autonomous and more dangerous from a cybersecurity perspective. The ability of these new frontier AI and open weight models to uncover previously unknown vulnerabilities at a rapid pace has become even more apparent. Organizations simply do not have enough time or resources to fix the unprecedented number of software vulnerabilities that are being discovered. The time between vulnerability is being discovered and exploited is also shrinking. You cannot win a patching race against AI. This is leaving organizations exposed and likely leads to more breaches. Over the past few months, our team has conducted hundreds of frontier AI risk assessments for global enterprises to help them assess their cyber resilience posture to minimize potential breaches that takeaways have been incredibly revealing. Over 90% of organizations had AI applications, models and other servers exposed to the Internet and more than 1/3 had known exploitable vulnerabilities. At the same time, the threat landscape has been compounded by the ability of new AI models to power ungoverned autonomous agents. We are now seeing the impact of fully autonomous AI attacks. They have already been multiple high-profile incidents from 3 leading frontier model companies where agents went rogue and took unauthorized actions. This includes the recent Hugging Face incident where a swarm of agents went to extreme lengths to break out of a sandbox training environment, get onto the copay network and move laterally to conduct a sophisticated attack. This is driving urgency at the highest levels and Zscaler is uniquely equipped to meet the moment. CEOs and boards are looking to us as their trusted partner to address 3 essential business challenges. First, how do we secure our environment when we can't patch security vulnerabilities fast enough? Our Zero Trust Exchange makes applications, AI models and data invisible. And attacker, human or agent, cannot reach what it cannot reach. Second, how do we minimize the impact of a potential breach? Our Zero Trust Exchange connects users, workloads, branches and agents directly to the applications they need without placing them on the network. This eliminates lateral threat movement containing the impact of a breach. Third, how do we take advantage of all the benefits of AI without introducing significant new risks? Zscaler has a full portfolio of data security and security for AI solutions that prevents data exfiltration, provides guardrails to prevent abuse or misuse of AI applications and enables secure agentic communication. Because of these advantages, customers trust us to secure their business-critical environments. We are also differentiated by our scale, operating the world's largest distributed in-line security cloud, processing more than 750 billion transactions per day. This scale provides unmatched high-fidelity telemetry that continuously improves our AI-powered security capabilities. In the AI era, Zero Trust is now an imperative, and we're not alone in this belief. Anthropic published a white paper in late May, encouraging adoption of a Zero Trust architecture for AI agents, emphasizing the importance of treating every agent like an untrusted entity and making sure it only has access to authorized data and applications. This is why customers are expanding their investments with us to secure their agentic infrastructure and why we are confident our platform is uniquely equipped to address the risks companies face in this new world. In addition to protecting companies from the threats created by Agentic AI, we are also enabling organizations to safely deploy AI agents and models. Our AI solutions are key to providing enterprise visibility, governing what data and applications agents can access and what actions they are permitted to perform. We are often asked why our solutions are needed alongside identity for AI security. While identity solutions answer who is requesting access, our in-line exchange determines what that user or agent should be allowed to do and enforces that policy in real time. Put simply, identity is only the starting point for securing AI. Greater visibility and control is needed for organizations to trust agents accessing sensitive data, interacting with applications and taking action on behalf of users. Earlier this year, we introduced the industry's most comprehensive security for AI solutions designed for exactly that reason. We are seeing strong proactive inbound interest from both new and existing customers, and we have seen no budget constraints. Security for AI bookings increased more than 50% sequentially in Q4 on top of a strong Q3. Our security for AI solution provides new logo opportunities by offering organizations an integrated way to secure AI use at scale. At our Zenith Live Conference in June, we unveiled the latest additions to our security for AI lineup, including our Zero Trust Exchange for agents and Endpoint AI Security, both of which we expect to scale in the second half of fiscal 2027. Both products are in early access, and we're seeing tremendous interest from customers. These new solutions will provide organizations the ability to enforce AI policy, both at our exchange and the endpoint, enabling policy enforcement at the optimal location. We continue to innovate in this area at a rapid pace. Next week, we are announcing the next major innovation on our platform with our new Agentic SecOps solution. Just as AI is increasing the threat surface, it is also stressing a human-driven traditional SOC approach, where remediation can take days or weeks. In contrast, our AI-first approach brings together our proprietary telemetry and Red Canary's decades-plus of experience in managed detection and response or MDR. Our Agentic SecOps solution enables security teams to prioritize real threats and leverage specialized AI agents to detect, investigate and respond to threats at machine speed. We're driving closed-loop remediation in real time by integrating our Agentic SecOps with our Zero Trust Exchange, enabling customers to move with speed as the time between detection and exploitation has decreased from months to minutes. We will be launching our new Agentic SecOps solution with a webcast on September 9, which will be streamed on our website. Our approach for securing users and nonusers and ensuring safe adoption of AI is resonating. This is increasingly evident in my conversations with customers and partners and is illustrated with a few customer examples. First, we had a notable 7-figure upsell Z-Flex win with a Fortune 500 transportation customer who deployed our security for AI portfolio to secure their full AI life cycle. Our security for AI solution provides an integrated approach to secure AI use at scale. This includes discovery and management of all AI assets, including shadow AI and enforcement of safe access to approved apps. It also includes real-time prompt and response inspection to stop data leaks and threats like prompt injections and continuous red teaming assessments. This customer selected our security for AI solution over 2 major platform competitors and with this win, the customer's ARR grew to nearly $10 million. In another 7 figures, Z-Flex upsell, a Fortune 500 semiconductor manufacturer expanded its adoption of the Zscaler platform to secure a company-wide rollout of Claude Cowork. After assessing several vendors, this client determined Zscaler security for AI was the only solution capable of securing the customer's AI adoption, including its endpoints, secure agent to agent communication and model usage in private and public environments. This is a great example of how our customers are expanding the use of Zero Trust Exchange to safely deploy AI agents and models as well as combat the threats created by Agentic AI. While we're in the early innings of security for AI, these deals give us tremendous confidence in our ability to expand this offering significantly over time. Next, our leadership in data security is a powerful tailwind for our Security for AI business. As enterprises embrace GenAI and Agent AI, they're confronting a new wave of data exfiltration risks, including data abuse and over privileged access to data. Our in-line architecture, coupled with our Endpoint DLP and now Endpoint AI Security enhances our ability to enforce data loss prevention in the cloud as well as on the end point. Securing data and AI go hand-in-hand as evidenced by the fact that 70% of our security for AI deals this quarter included our data security solution. In Q4, we also closed a 7-figure Z-Flex upsell win with a large global asset management firm. The customer selected Zscaler's data security posture management solution over a privately-held DSPM vendor. This customer chose Zscaler to address gaps related to sensor data discovery across its multi-cloud environment and data governance. With this upsell, the annual spend of this customer increased by nearly 40%, reaching an ARR of $5 million plus. We're also seeing continued traction across our Zero Trust SASE solutions, including customers expanding their Zero Trust SASE deployments. For example, this quarter, we signed a 7-figure Z-Flex upsell with a Global 2000 financial services customer, who upgraded to Zscaler Private Access with AI-powered app segmentation for 120,000 users, increasing their ARR by nearly 50%. We are also driving new logos. We closed a 7-figure new logo Z-Flex win with a Fortune 500 life sciences company that is deploying our Zero Trust SASE and security for AI platform across 75,000 users and displacing a legacy firewall-based SASE platform. This customer, led by a newly appointed CISO who is a 3x repeat Zscaler customer, chose us for our ability to deliver unified visibility and control across both enterprise security and GenAI. This is a great example of a new logo purchasing the entire Zscaler platform. Customers are also increasingly starting the Zero Trust journey by securing nonuser environments. For example, we closed a 7-figure new logo win with a Global 2000 health care equipment manufacturer to deploy our Zero Trust Branch solution across the critical production sites to secure its OT environment, displacing an existing long-term legacy vendor. This is an example of a sizable opportunity Zscaler has within factories and warehouses to secure IoT/OT and provide Zero Trust device segmentation. Zero Trust Branch simplifies customers' branch deployments by eliminating traditional branch firewalls, SD-WAN and MPLS networks, reducing operational complexity. It also minimizes the impact from an infected machine in a branch or a manufacturing plant by limiting lateral movement across the environment and therefore, containing the breach. In another known user deal win, we closed a 7-figure upsell with a Fortune 500 aerospace customer. This customer was going through a divestiture and expanded its Zero Trust Cloud deployment between its on-prem and public cloud environments to securely migrate workloads. With this deal, the ARR of this customer grew by more than 30% to over $5 million. We're seeing tremendous momentum with Zero Trust Cloud. This quarter, we extended the solution by offering a managed service through Google Cloud, which can be configured in under 10 minutes, reducing the deployment time and operational costs significantly. This expands on our existing offering for AWS and enables multi-cloud flexibility. The strength we are seeing in Zero Trust Branch and in Zero Trust Cloud is translating to meaningful momentum with Zero Trust Everywhere enterprises, those that have purchased Zero Trust Users, Zero Trust Branch and Zero Trust Cloud. We exited Q4 with more than 950 Zero Trust Everywhere enterprises versus over 700 in Q3 and over 350 at the end of fiscal 2025. To summarize, AI represents one of the most significant opportunities in Zscaler's history. Our platform was built for this moment. Zscaler has always secured interactions between every user and applications, and now Zscaler secures interaction between every user, every agent and every AI model. We have a large and growing market. Adoption of our platform is expanding, and we are continuing to innovate across Zero Trust SASE, Agentic SecOps, data security and security for AI. We are well positioned to extend our leadership as the cybersecurity platform for the AI era, drive durable growth and create long-term shareholder value. Now I will hand it over to Kevin to walk through the financials. Kevin Rubin: Thanks, Jay. We delivered strong Q4 results with revenue and ARR both growing 25% year-over-year, net new ARR growing 24% and non-GAAP operating margin reaching a record 24.3%. For full year fiscal '26, revenue also grew 25% and when combined with 23% free cash flow margin, our performance exceeded the Rule of 40, landing at approximately 49%. Our growth engine continues to broaden beyond users with increasing contribution from non-seat-based solutions, continued Z-Flex momentum, record large deal activity and improved sales productivity. ARR momentum remains strong in Q4. Excluding the contribution from our acquisition of Red Canary, net new ARR was $232 million, up 17% year-over-year, and total ARR was up 20%. Importantly, this marks a continued acceleration in net new ARR growth from 7% in fiscal '25 to 10% in the first half of fiscal '26 and to 17% in Q4. Red Canary exited Q4 with $141 million of ARR. Total net new ARR was $246 million, up 24%, bringing total ARR to $3.8 billion, up 25% year-over-year. Performance was broad-based with strength across the Americas, EMEA and APJ. We also continued to deepen enterprise adoption. In Q4, we closed with a record number of $1 million plus new ACV deals and the number of $10 million-plus ARR customers nearly doubled year-over-year. We ended the quarter with 785 customers generating over $1 million in ARR and 4,182 customers generating more than $100,000 in ARR, growing 18% and 20% year-over-year, respectively. As our platform expands beyond users to protect branches, workloads, AI applications and AI agents, our monetization model is also expanding. In Q4 and for the full year, our non-seat-based metered usage solutions delivered approximately 30% of new and upsell ACV. ARR tied to these offerings grew more than 100% year-over-year. Turning to revenue. Q4 revenue was $898 million, up 25% year-over-year and 6% sequentially, exceeding the high end of our guidance. Growth was broad-based across the geographies. The Americas accounted for 57% of revenue and grew approximately 30% year-over-year. EMEA accounted for 27% of revenue and grew approximately 17%, and APJ accounted for 16% of revenue and grew 23%. For full fiscal '26, revenue of $3.4 billion grew 25% year-over-year. Excluding Red Canary, revenue of $3.2 billion grew 20% year-over-year. Red Canary contributed $144 million of revenue in fiscal '26. The Americas accounted for 57% of revenue and grew approximately 31%. EMEA accounted for 28% of revenue and grew approximately 16%, and APJ accounted for 15% of revenue and grew approximately 23%. Remaining performance obligation, or RPO, of approximately $7.4 billion grew approximately 27% with approximately 45% classified as current RPO. Turning to go-to-market. We are pleased with the continued strong sales execution. In Q4, we delivered double-digit sales productivity growth and achieved our highest quarterly productivity ever and the highest annual productivity since 2022. This reflects continued improvement in our account-centric sales motion and our ability to drive broader platform adoption with customers. Entering fiscal '27, our priorities are focused on deepening relationships with existing customers, accelerating platform adoption, improving new logo execution, expanding coverage in key segments and increasing partner-led contribution. These priorities are especially important as the rapid proliferation of frontier AI models increases customer engagement at senior levels of the organization as Jay discussed earlier. To support new logo growth, we are expanding coverage through both direct and partner-led motions. For example, we recently expanded our partnership with Carahsoft to further penetrate the commercial and SMB segments in the U.S. through 100% channel-led motion. We are also adding dedicated new logo sales executives focused specifically on pursuing new enterprise customer opportunities. Z-Flex remains an important part of our go-to-market strategy. It provides customers with multiyear commitments, the flexibility to activate or swap modules without starting a new procurement cycle while also providing premium deployment assistance and support. We saw strong momentum again this quarter with Z-Flex, driving meaningful upsell, shorter sales cycles and greater forward visibility. In Q4, Z-Flex generated over $770 million in TCV, up more than 60% quarter-over-quarter. For fiscal '26, Z-Flex customers saw an ARR uplift averaging nearly 30%. For fiscal '26, Z-Flex generated more than $1.7 billion in TCV, underscoring customers' long-term commitment to Zscaler. Two recent examples illustrate the value of this model. In a 5-year 8-figure Z-Flex deal, a Global 2000 services customer increased its ARR by nearly 90%, crossing $5 million this quarter and driven by expansion with existing products and adoption of new products, including our security for AI and Zero Trust Cloud solutions. In another example, an existing 7-figure ARR Global 2000 retail and wholesale customer increased its annual spend with us by 140% in a 3-year 8-figure Z-Flex deal. This customer expanded adoption across 9 existing modules and adopted 6 new modules, including our security for AI solution. Turning to operating performance. We delivered strong profitability while continuing to invest in the business. Non-GAAP gross margin was 80.2% compared to 79.3% a year ago. The year-ago period included a onetime deployment of a large private cloud in a government customer's data center, which included a hardware component that carried a lower gross margin profile. We also delivered significant operating leverage in the quarter. Non-GAAP operating income was $218 million, up $60 million or 37% compared to $159 million last year. Non-GAAP operating margin was 24.3%, up 220 basis points year-over-year. For the full year, non-GAAP gross margin was 80.3%, up 20 basis points year-over-year. Non-GAAP operating margin was 22.9%, up 120 basis points year-over-year. This performance reflects the strength of our business model, disciplined execution and our ability to deliver durable growth with expanding profitability while continuing to invest in the significant market opportunity ahead. Turning to the balance sheet. We ended the quarter with approximately $3.5 billion in cash, cash equivalents and short-term investments and $1.7 billion of debt. In Q4, we generated $279 million in operating cash flow, and CapEx was $200 million or 22% of revenue. This brought our full year CapEx to $277 million or 8% of revenue and coupled with capitalized internal use software of $73 million resulted in free cash flow of $779 million for the full fiscal '26 or a free cash flow margin of 23%, down from 27% last year. The year-over-year declines reflect the timing of cash collections and CapEx expenditures. Looking ahead, I want to provide an update on our expectations for capital expenditures to support our growth. As I shared last quarter, we are seeing higher prices and tighter availability for memory, storage and processors. These components support our data center infrastructure and our Zero Trust Branch appliances. In Q4, we opportunistically accelerated certain purchases where data center equipment was available. As a result, fiscal '26 CapEx was 8% of revenue, consistent with the expectations we provided last quarter for CapEx of high single digits as a percentage of revenue. We expect CapEx to remain elevated during fiscal '27 due to higher component pricing, especially memory. We'll continue to monitor our costs and share regular updates about the impact. To provide additional capacity to support our AI and growth initiatives, we are strategically reallocating resources through a workforce restructuring. This action is expected to affect approximately 3% of employees and result in restructuring charges of approximately $30 million to $33 million. Turning to guidance. Let me provide our outlook for Q1 and full year fiscal '27. As a reminder, these numbers are all on a non-GAAP basis. For the first quarter, we expect revenue of $935 million to $939 million, approximately 19% year-over-year growth; gross margin of approximately 80%; operating profit of $215 million to $217 million, up approximately 25% to 26% year-over-year, representing a 23% operating margin; net other income of approximately $33 million; and earnings per share of approximately $1.15 to $1.16 per share, assuming a 21% tax rate and 170 million fully diluted shares. For the full year fiscal '27, we expect ARR of $4.396 billion to $4.426 billion or year-over-year growth of approximately 16.6% to 17.4%. For net new ARR seasonality, we expect approximately 37% of net new ARR in the first half of fiscal '27 with 15% in Q1 fiscal '27. Revenue of $3.908 billion to $3.938 billion, reflecting year-over-year growth of 16.6% to 17.5%. Gross margin of approximately 80%, operating profit of $924 million to $932 million, up approximately 21% year-over-year and equating to an operating margin of approximately 23.7%. Net other income, approximately $140 million to $142 million. Earnings per share of $4.86 to $4.90, assuming a 21% tax rate and approximately 173 million fully diluted shares and free cash flow margin of approximately 23% to 23.5%, reflecting CapEx, not including internal use software in the low teens as a percentage of revenue. We expect free cash flow margin to be seasonally stronger in Q1 and Q4, reflecting timing of CapEx and cash collections. Looking ahead, we are excited by the opportunities we see to continue scaling our rapidly expanding AI Security portfolio, accelerating Zero Trust Everywhere adoption and growing our data security revenue. In summary, we are pleased with the results we delivered in fiscal '26. We achieved 25% year-over-year ARR growth, record operating income and operating margin. We also saw continued momentum with Z-Flex and closed an all-time record number of $1 million-plus ARR deals. I'm excited about the substantial opportunity ahead in fiscal '27. We are confident in our ability to continue to drive profitable growth across multiple vectors, including product innovation, go-to-market and customer expansion and creating value for our shareholders. To learn more about our strategy and plans for the future, please join us at our upcoming Investor Day on October 6 in New York City. I want to thank our employees, customers and partners for their continued support. With that, operator, you may now open the call for questions. Thank you. Operator: [Operator Instructions] Our first question comes from Saket Kalia with Barclays. Saket Kalia: Okay. Great. A nice close to the year. I'll keep it to one, but maybe address it to both of you, Jay and Kevin. It's great to see the higher growth rate for next year in ARR. Maybe the question is, how are we thinking about the impact of some of the sales churn here that we talked about last quarter in terms of productivity? And do we feel like the sales churn here has stabilized as we go into '27? Jagtar Chaudhry: Let me start. Over the past few quarters, we have gone through transformation of our sales organization where we expanded from opportunity-led sales to account-focused sales. The strong results of Q4 kind of show that the transformation, the changes we've driven are working well. If you look at the sales productivity, actually, the sales productivity in Q4 was the highest. I think we are very well positioned with a strong sales team with good channel partnership and a very strong product portfolio as we enter fiscal '27. Kevin? Kevin Rubin: Yes. Thanks, Jay and Saket. Maybe just to reemphasize the point. So Q4 marked the highest productivity quarter that we've ever seen and fiscal '26 was the highest annual sales productivity in 4 years. So I think we're really positioned and set up well going into fiscal '27. Just as a reminder, we did have 2 sales leaders depart last quarter. One was a geo leader and the other was a vertical leader. We backfilled and internally promoted the vertical leader. Since then, a new leader has accepted the offer for the geo position. Just keep in mind that certain geos may take longer to onboard than others. And finally, as we think about the shape of the transition, we expect that the leadership transition will play out in the first half of this fiscal, and that is reflected in our guidance. And I am excited about how this leadership team is coming together as we think about augmenting our existing team into this year. Operator: Our next question comes from Fatima Boolani with Citi. Fatima Boolani: I was hoping to have you unpack some of the discrete drivers of that organic net new acceleration in the quarter. Provided that this is your fourth fiscal quarter, it's an abundant period of renewals and expansionary behavior from customers. So I'd love to kind of how you stack rank between some of those inputs and how did you feel and think about your new logo activity in the quarter? Just wanted to get a sense of the most sensitive drivers of upside and strength there relative to what we were looking for. Jagtar Chaudhry: I'll start, and Kevin can add on. Q4 was a very strong quarter from almost all measurements. You saw all the metrics. We did very well. Our product portfolio has become pretty broad. Zero Trust Everywhere has been driving a lot of our sales. AI security peers are growing out there. And one of the things AI security needs Zero Trust architecture, Zero Trust solutions. Our solution like Zero Trust Branch did extremely well. Data security drove a big part of our business. And even the young offerings of security for AI has grown very nicely. So all products actually did very well. Kevin? Kevin Rubin: Yes. Thanks. So maybe just a couple of other points to emphasize. We did have broad-based strength in the quarter. So I think that's number one to reflect. NRR, although it's not a metric that we provide each and every quarter, it was consistent each quarter this year at 115%. So we've seen very consistent performance in terms of our upsell motion that I think is important to appreciate. Maybe one other comment I'll make is, as Jay mentioned, the early success with our security in AI. Obviously, it had a strong performance in the quarter. But another optimistic point of view is that we also saw a 75% increase in pipeline in security for AI as we think about what that sets up for '27. Jagtar Chaudhry: If I may add 2 more points, from a new logo point of view, our Fortune 500 penetration moved up from 45% to 50%. That's pretty remarkable. And also worth noting is the $1 million-plus deals. We had a record quarter for new million ACV teams. Kevin Rubin: And Fatima, my reference to the increase in the pipeline relative to AI was quarter-over-quarter sequential, not year-over-year. Operator: Our next question comes from Roger Boyd with UBS. Roger Boyd: Awesome. Jay, I wanted to touch on the competitive environment you're seeing with some of these AI security wins. And I want to maybe pick on the 7-figure upsell you called out with an airline company where you won over 2 other platform competitors. Can you just talk about what you're seeing in these bake-offs? Presumably, companies are taking these decisions pretty seriously and trying to make strategic bets on which layer of security they see as best positioned to secure AI. But I'd be curious to see what you're seeing and what's causing you to win these large deals. Jagtar Chaudhry: Yes. AI security is in demand, and there are probably lots and lots of AI security companies, probably tons of start-ups as well. So one of the things we see out there is our customers tell us that they don't want 1 more or 3 more AI security products. They're looking for an integrated solution, not only for AI security, but also that works with the rest of security as well. So this transportation customers that we highlighted, they are a Zscaler customer for Zero Trust Everywhere. And it's natural for them to say, if I need to expand into AI security, then tomorrow, I need to be ready for my agentic communication, where Zero Trust Exchange to be able to ensure policy for agents. We were the natural choice for that to happen. And yes, every company is offering AI security, but they all come from different sides of it. Our differentiation is we have an [ interior ] solution for asset management to communication to actually relationship figuring out the access graph as well as agentic communication actually. That's really what's setting us apart. Operator: Our next question comes from Richard Poland with Wells Fargo. Richard Poland: I just wanted to get a sense for unpacking some of the verticals in the quarter. I guess when we think about federal, I know last year, federal was a little bit softer than we would have hoped for. But just as we think about this quarter and heading into fiscal year-end for federal, anything to keep in mind there? Kevin Rubin: Yes. I'll take that quickly. Look, the federal business contributed high single digits to new ACV in '26. That was very similar to '25. Expectations for fiscal '27 are similar. There's nothing in particular that I would point out. Obviously, earlier in the year with [indiscernible], it was a difficult environment, but we've seen it perform fairly consistently with the last several years. Operator: Our next question comes from Joseph Gallo with Jefferies. Joseph Gallo: Nice job on a quarter. I was just hoping if you could break out the Symmetry contribution to net new ARR in 4Q. And then just as a part of that really strong strength in non-seats in fiscal '26, what are the expectations as we go into fiscal '27? Because you're obviously offering more and more there. So is it fair to expect a larger mix of the new business comes from that non-seat? Jagtar Chaudhry: So Symmetry is a very innovative technology that essentially connects the dot between different entries accessing different data sources as we have seen proliferation of AI agents. This innovative technology becomes extremely important. This was essentially acquired as a technology company with little -- very little revenue for it. But it's becoming an important part of Zero Trust Exchange, not only for agents, but Zero Trust for cloud workloads and Zero Trust for devices because understanding relationships of entities to what they access is foundational piece. That's where it's fitting in. Regarding non-seat at a broader level, the comment I'll make is while early on, our products like ZIA for users, ZPA for users were largely user-centric. A lot of our offerings subsequently have not been user-centric. For example, Zero Trust for cloud workloads, it's all about workloads. It's essentially consumption based. Zero Trust Branch, which is largely about branch devices, IoT/OT devices communicating is all about non-seats. Data security, some of the modules are [ seat-based, ] others are data volume-based. And almost all of our AI security products or security for AI products are consumption-based linked to queries, essentially transferred to token consumption fundamentally. Kevin? Kevin Rubin: Yes. So with respect to Symmetry, again, to Jay's point, it really was a technology and talent acquisition and provided the access graph technology for us. The results are immaterial to our results, and nothing else to call out there. Operator: Our next question comes from John DiFucci with Guggenheim Securities. John DiFucci: I have -- I apologize. I have a 3-part question, but I promise, it's all related. You said you're adding new enterprise reps to go after enterprise accounts while also restructuring, and that's going to affect 3% of your employees. Can you give more color around this? One, what kind of employees will be affected? And what will be the net employee count effect? And then also, where are these new reps needed, is it specialized sales or will it be broadly across your geos and product? And finally, what's driving this, is it an inflection point in demand that Jay talks about AI or is it just as you said -- you also said here, you're seeing very good sales productivity, so now it's just the time to be hiring more to keep on growing? Jagtar Chaudhry: Yes. Let me start. So first of all, the reduction you pointed out, it's essentially rebalancing a reallocation of some of our resources with better leverage and also better investments in the AI area we are looking at. That's fairly straightforward. And if you look at adding our sales resources, when a company is growing at a pretty good pace, it's natural to add resources. We have essentially almost always done it. Now the question is where do we add the most of the resources. We do have specialty teams and we have account execs. Our specialty teams have been making a pretty meaningful contribution. I'm extremely proud of it. Our CRO, Mike Rich and his team evolved the idea of take-up teams that we have started about 3 years ago. It has become a very good specialty team, and we are adding resources to specialty teams. But also in geos too, a number of accounts execs are being added. One of the areas for addition of account execs is probably the enterprise. If you look at the top end of the enterprise, we're pretty well covered. As you come down in the enterprise market, our coverage has been thinner. We are making that coverage. We are also investing on some of the channel resources because channel is helping us expand in the mid-market and like. Kevin? Kevin Rubin: Yes, John, the only thing I would add is the restructuring is about 3%. So it's modest, about $30 million to $33 million in restructuring charges. Maybe just to also double down on what Jay mentioned, Mike is adding people to the organization, both to address opportunities we have with new logos as well as upsell. We have about 4,600 of 20,000 targeted companies. So there's a big opportunity just with new logos alone. And so Mike does see an opportunity to do that through dedicated new logo hunters along with reps that hold both existing customers and prospecting territories. So there's opportunity for us to continue to expand across both of those dimensions. John DiFucci: So just to be clear, guys, and thank you for that detail. It's more about, hey, listen, our sales force is getting really good and productivity has gone up. So in order to continue to grow, and you're bigger, too, the law of large numbers, you just need to hire more salespeople. But it's more of that than it is when Jay talked about AI changing demand for security out there. Is that -- am I reading you right? Kevin Rubin: I don't think it's either or to be honest. I mean we certainly are seeing strong tailwinds with respect to AI broadly, whether it's specific to security for AI or just broad-based interest in Zero Trust and our existing kind of core Zero Trust Exchange. So I wouldn't limit the discussion to simply just generally continuing to hire to grow. I think there is a unique momentum at the moment with respect to kind of this AI tailwind. Operator: Our next question comes from Brian Essex with JPMorgan. Brian Essex: I guess I want to take the other side of the coin relative to what Fatima asked. And I want to ask about the health of the Red Canary business. I know when you entered the year, there was some question of what the renewal experience would be on that platform, and you've now had a year worth of renewal experience. I think it's performed relatively well. But you also commented I think at the beginning of the year that some of those customers aren't your typical Zscaler customers. So now that you've kind of like had a year of experience, what is your expectation for the growth of that business? And I totally understand the rationale behind the IP acquisition and the value that's going to provide to the products being released very shortly. But I just want to kind of get a baseline of what is your view of the health of that customer base, the renewals and growth of that base business going forward, so we can kind of gauge what -- how to interpret the outlook for fiscal '27. Jagtar Chaudhry: I will start with a broader comment. The acquisition of Red Canary was, number one, to make sure we have agentic technology that could become part of our SecOps platform. Number two, we didn't have any SecOps expertise. Red Canary had 10 years of experience about understanding how our SecOp runs, and that was important for us. In that area, we've done a pretty good job of integrating their technology with our technology, and that's becoming an important part of our SecOps solution. Regarding financials, Kevin? Kevin Rubin: So look, fiscal '26 was really focused on integrating the Red Canary technology into our Agentic SOC solution that's launching next week. When we closed the acquisition a year ago, we did not know what portion of their business was going to be durable. So we took a conservative approach in how we picked up ARR. Quite frankly, we're pleased with the ability to maintain the book of business while going through the integration. As I mentioned last quarter, as we think about fiscal '27, we are integrating their technology. It is a combined integrated offering that launches next week. And so as it relates to Red Canary, we're not expecting any net new ARR contribution. All of that will show up in the integrated solution going forward. Brian Essex: Very helpful. Do you think the churn is pretty much in the rearview mirror at this point in terms of any churn on that platform that may have happened? Kevin Rubin: I mean, look, we've talked, I think, at nauseam about the different churn rates that MDR businesses experience discretely different from ours. And that was -- that played out that way. We did see elevated churn in Red Canary's business in '26. Despite that, we were able to continue to maintain its book of business, as I mentioned. I would expect that as it relates to accounts that are up for renewal that we'll continue to see the higher, more traditional churn rates of an MDR business, not our rates, but that has all been contemplated in the guide. Operator: Our next question comes from Meta Marshall with Morgan Stanley. Meta Marshall: Great. I wanted to ask a question about the Z-Flex traction that you're seeing. And just as you continue to expand the platform with AI security and Agentic SOC, do you envision kind of mandating Flex plans more with some of these new products? And just how is it impacting sales cycles relative to the traditional sales approach? Jagtar Chaudhry: I'll start. So Z-Flex is not about mandating. Z-Flex is about providing flexibility. As our platform is getting bigger, many times, our customers will look at evaluating product A or B or C or D, and they're not sure which one do they want, and this will take longer time. By giving them the flexibility there, you can start with a certain number of products, you can swap other products without going through, again, typical procurement level. This is one of the biggest things they needed. And sometimes, they wanted the ability to ramp because if they bought 6 products rather than 3 of them, they want some ability to ramp that became part of the Flex deal. And they also want a longer duration. The customer engagement with us are not transactional. They're generally long term. Once they deploy us, they invest. They want to stay with us for the longer time. And they also want the ability to buy additional product from a rate card. All those things are very good for business, for customers and good for us as well. But it's true as our platform becomes bigger, all the products will be available as a part of our Z-Flex offering. Kevin Rubin: Yes. And one of the other advantages, it was in my prepared remarks, is it does -- it eliminates the need to go through new procurement cycles every time a customer wants to adopt and implement new modules or features on the platform. So you go through that discussion once. They have to complete flexibility the choose what's appropriate for them to use with their business at different points in time. And these are longer-term commitments, so we can offer that level of flexibility. So we've been very pleased with the momentum with Z-Flex. And as I mentioned, we ended fiscal '26 with more than $1.7 billion in Z-Flex bookings. So it's been very, very well received. Operator: Our next question comes from Shrenik Kothari with Baird. Our next question comes from Ittai Kidron with Oppenheimer & Company. Ittai Kidron: A solid finish for the year, guys. Kevin, I want to dig into your outlook for fiscal '27, specifically on the ARR front. I would love if you can give us a little bit more insight into the puts and takes that you've taken into account into that ARR guide. I mean clearly, you've had very good momentum here with net new ARR. If my math is right, that declines to 4% at the midpoint for your guide for fiscal '27. So would love to kind of get a little bit more kind of color as to what's included with respect to the go-to-market, the new products and any other components that you think it's important to call out. Appreciate it. Kevin Rubin: Yes. Thanks, Ittai. Maybe at the highest level, what I would say is we're very optimistic with the momentum that we do carry into '27, especially after a 17% net new ARR growth in Q4, excluding Red Canary. I am considering the time it will take for the sales transition that we've talked about, both in terms of the geo and the verticals as well as the pace of the uptake of the integrated SecOps solution. In addition to that, look, as I mentioned, we have had consistent NRR. I mentioned each of the quarters of fiscal '26, it was $115 million. So I do expect that to continue. We also have an opportunity to accelerate new logo growth, which we've talked about. We're adding dedicated new logo sales executives, specifically focused on enterprise customers. We also have, from a product point of view, a larger opportunity to land new logos with a variety of products, very different than was the case years ago. And so I'm pretty optimistic in terms of the different dimensions that we think about for '27 and opportunities for us to continue to grow. Jagtar Chaudhry: And AI security is adding further tailwinds. Ittai Kidron: Is the AI security contemplated materially into your outlook because a lot of that portfolio still needs to come? Kevin Rubin: Yes. We haven't specifically called out the contributions from security for AI in the guidance. But as I mentioned, AI is very quickly becoming a strong and durable tailwind for the business. And it is driving demand, not just for security for AI solutions, but Zero Trust Everywhere and data security. And we expect that these drivers will persist in '27. Operator: Our next question comes from Gregg Moskowitz with Mizuho. Gregg Moskowitz: Jay, as you mentioned, you're hosting a launch event for Agentic SecOps next Wednesday. Quite frankly, a lot of time has passed since you acquired Red Canary and now that the day is upon us or almost upon us, it would be helpful to hear just a bit more from you as to what might be unique about your Agentic SecOps and what it will unlock for your customers. Jagtar Chaudhry: Yes. Very good question. So our customers have been talking to us for the last few years. They're telling us that we have the best data, best telemetry across the network because sitting in line from endpoint to sitting on the endpoint and cloud as we're sitting on cloud workloads as well. This is resulting in over 750 billion transaction logs per day. That's a starting point of really good SecOps. So our customers are saying, we have to send this data to another vendor. You've got the data right there, why can't you give us more meaningful information that's needed for SecOps, which is natural. We should be doing that. That was number one driver. Number two was, we observed over the years that there was a first generation of SecOps solution. Then second generation came where they're still human-centric but automation-driven. They're essentially human-driven. We saw the opportunity to really build a SecOps solution truly agent native, where agents are driving, detecting and able to investigate this thing at machine speed versus a traditional solution. I think it's an opportunity to disrupt traditional SecOps solution, even the one that they call themselves next-gen SecOps. And the last factor was closed-loop remediation. These days, the time between a vulnerability being discovered and exploitation and shrinking typically take days or weeks for a typical SecOps solution to get all that telemetry, do all the detection and planning and really take an action. With Zscaler, since we have most of the data, we could do it within minutes. Those were the big drivers for us. We have a large number of customers who are waiting for our solution to really be deployed. So we are pretty excited about it. I think we'll have a meaningful opportunity for us. In the first half of the year, it's going to take some time to take off, but it should start contributing in the second half and then fiscal '28. Operator: Thank you. I would now like to turn the call back over to Jay Chaudhry for any closing remarks. Jagtar Chaudhry: Thank you all for joining us today. We hope to see you at one of our investor conferences. Thank you again. Operator: Thank you. This concludes the conference. Thank you for your participation. You may now disconnect. Before you buy stock in Zscaler, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Zscaler wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $414,015!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,385,459!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of September 9, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Zscaler. The Motley Fool has a disclosure policy. Zscaler (ZS) Q4 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Palo Alto Networks, Inc.? Here are five stocks we like better. Palo Alto Networks and Zscaler both beat expectations, but both stocks slipped as investors weighed high expectations and forward guidance. Palo Alto’s next-generation security ARR growth and free-cash-flow margin give it an edge over Zscaler in this comparison. Zscaler remains a strong cybersecurity operator, but its slower ARR growth and lower free cash flow margin make Palo Alto look better positioned today. The AI boom has been a gift to the cybersecurity industry, driving a wave of spending as companies scramble to defend against a new generation of threats. Two of the biggest beneficiaries, Palo Alto Networks Inc. (NASDAQ: PANW) and Zscaler Inc. (NASDAQ: ZS), both reported earnings this week, offering a rare chance to weigh the sector's heavyweights side by side. Curiously, both comfortably beat revenue and earnings expectations, yet both shares slipped afterward. Palo Alto had already rallied sharply from its February low heading into its report. Still, even a solid beat couldn't stop the stock from falling sharply, a classic case of lofty expectations proving too hard to satisfy. Zscaler, earlier in its own recovery after a punishing slide, edged lower too, with the beat obviously not being convincing enough. → 3 Under-the-Radar Defense Stocks With Record Backlogs So with both companies riding the same powerful tailwind and both leaving the market slightly underwhelmed this week, it’s a good time to explore which one enters the final few months of the year in the stronger position. Although they compete for the same security budgets, the two are known for very different things. Palo Alto has made its name as the great consolidator, with a strategy it calls platformization: persuading customers to buy a whole suite of security products from it as a single vendor rather than stitching together tools from many. → Ride-Share Reckoning: Tesla Drives Into Uber's Lane Zscaler, by contrast, made its name pioneering zero trust, a cloud-based security model that assumes no user or device should be trusted by default. While the approach is now industry-wide, Zscaler remains its standard-bearer and has built a formidable cloud security franchise around it. Both models are benefiting handsomely from the AI wave, and both used their results this week to speak to surging demand for AI-related security. However, the big difference lies in each one’s underlying momentum, and here the numbers begin to separate them. → 3 Earnings Season Winners That Analysts Can't Stop Upgrading On the measures that matter most, Palo Alto is coming out ahead this week. Its key gauge of recurring revenue from next-generation products soared 63% over the past year, a blistering pace for a company of its size. Zscaler's equivalent measure grew a still-respectable 25%, solid by most standards but visibly slower than its larger rival. The platformization strategy also appears to be paying off handsomely. Palo Alto reported that customers who had consolidated onto its platform were spending more than 120% of what they had a year earlier, powerful evidence that the land-and-expand approach is working. Its total backlog of contracted future revenue swelled past a symbolic threshold for the first time, underscoring strong demand. Zscaler, for its part, pointed to record activity among its largest customers and strong take-up of its newer, more flexible pricing model. Yet its guidance for the year ahead implied a more measured growth trajectory, and it's restructuring its sales operation, adding near-term uncertainty. The gap widens further when it comes to turning that growth into cash. Palo Alto generated an adjusted free-cash-flow margin of around 38%, an enviable figure that reflects the operating leverage of its sprawling platform. That torrent of cash gives it ample firepower to invest, acquire, and reward shareholders. Zscaler is no slouch on profitability and, in fact, reported a record operating margin of its own. But its own full-year free-cash-flow margin, at around 23%, sits well below Palo Alto's, dented in part by the timing of cash collection and heavier spending. For a company still scaling up, that’s understandable, but in a head-to-head, it leaves it a step behind. This is the crux of the comparison. Both are excellent businesses, but Palo Alto is simply generating more growth and more cash, and doing so at a greater scale, precisely the combination that tends to reward long-term investors. Weighing it all up, Palo Alto looks the stronger of the two on this week's evidence. Faster growth, superior cash generation, and clear proof that its platform strategy is deepening customer relationships give it a more compelling setup heading into the rest of the year. Given its significant outperformance of Zscaler so far this year, investors have been clued in for a while. For those of us on the sidelines weighing up an entry into one or the other, the post-earnings dip in Palo Alto makes for an attractive entry point. To be fair, both stocks carry a MarketBeat consensus rating of Moderate Buy, but Palo Alto has attracted particularly bullish attention this week. The team at Argus, for example, just gave it a fresh $425 price target that implies nearly 30% upside from current levels. None of this makes Zscaler a poor investment. It remains a high-quality operator with a strong niche and a real AI tailwind of its own, and it could yet reward the patient investor. However, for investors seeking a stronger combination of growth and profitability today, this week's earnings made the stronger case for Palo Alto. The article "Palo Alto vs. Zscaler: Which Cybersecurity Stock Looks Stronger After Earnings?" was originally published by MarketBeat. View MarketBeat's top stocks for September 2026.

Interested in Zscaler, Inc.? Here are five stocks we like better. Zscaler beat fiscal fourth-quarter expectations, with revenue and annual recurring revenue both rising 25% year over year. Management said the sales leadership transition will play out in the first half of fiscal 2027, keeping some uncertainty around the outlook. AI security demand, wider margins and stronger guidance support the bull case, but expected growth deceleration remains a key risk. Zscaler (NASDAQ: ZS) gave the market everything it could ask for in its fiscal fourth-quarter 2026 earnings report: outperformance, acceleration, wider margins, and strong guidance. The one thing it didn’t give was firm reassurance that the sales leadership transition was going smoothly. Execs noted the transition would play out in the first half of the year, but offered little color beyond that. The critical takeaway is that this is the catalyst for higher share prices, and news could come at any time. Zscaler is not advancing as strongly as other cybersecurity stocks because of lost sales execs. While one was replaced early in the quarter, the loss led to cautious guidance, cautious analysts, and tepid stock price action. The upshot is that Zscaler, as the sector laggard with a catalyst ahead, is well positioned to advance aggressively once the headwind is removed. Until then, investors can focus on the results and price action, which underpin and reflect a market reversal. → 3 Under-the-Radar Defense Stocks With Record Backlogs Zscaler’s chart price action is bullish, reflecting a Double-Bottom reversal pattern. The only bad news is that the pattern has yet to be confirmed, but that is likely over the coming months. Signs of strength include the action itself, high volume on buying days, and strengthening MACD, which points to improving momentum—each upswing is a little stronger than the last and likely to strengthen again, given the strength of results and guidance. Critical target levels are near $158 and $195, with the $158 support target potentially tested before a fresh high is set. Technical triggers include confirmed support at the low end of the range and/or a clear break to fresh highs. Q4 results indicate the reversal will progress and new highs will be set. Revenue grew by 24.9%, accelerating year-over-year (YOY) to $898.19 million to outpace consensus by over 230 basis points. Strength came from new clients, penetration, and AI demand, with Security for AI Solutions growing 50% sequentially. Annual recurring revenue, an indicator of future revenue, also grew 25% both quarter over quarter and year over year, pointing to sustained strength in the coming quarters. → Ride-Share Reckoning: Tesla Drives Into Uber's Lane Margin news aligns with the bullish outlook, with GAAP and non-GAAP margins improving at the gross and operating levels. Key details include narrowing losses and improving adjusted profitability, with non-GAAP operating margin up 220 basis points (bps) to 24.3%. Adjusted earnings per share (EPS) were also solid, up by 34% and 10 cents better than expected. The only negative is a rising share count, but the increase is marginal, linked to share-based compensation, and insufficient to offset the equity gains. The balance sheet reflects the impact of capital expenditures (CapEx), with cash down YOY, but that is the worst of the news. The cash depletion is offset by increased inventory and receivables; current and total assets are up, and liabilities increase. The net impact was a 44% increase in shareholder equity and the expectation of ample future cash flow to sustain future improvement. → High Gas Prices Aren't Budging—Here Are 3 Stocks That Benefit Analysts expressed some skepticism about the sales team transition but were otherwise pleased with the results. Several analysts raised price targets immediately after the report, reinforcing the consensus target, which implies upside from recent levels. The fresh high is key because it puts the market above the critical resistance target and into a full technical reversal. In this scenario, ZS shares could move toward the high end of the range, pegged at $390. Institutional activity suggests downside is limited, as they own about 46% of the stock and have been accumulating. More importantly, MarketBeat data indicates accelerated activity ahead of the release, underpinning late-summer support. The group is likely to remain active on dips, with the critical support target likely to trigger activity. Zscaler’s biggest risk after the report is deceleration. While the latest results reflected acceleration, the guidance forecasts deceleration, which presents a headwind for sentiment. The caveat is that the quarter was strong and guidance came in well above forecasts. The likely outcome is that Zscaler has room to outperform its own guidance, potentially by a wide margin, as its zero-trust tools are in high demand, keeping analysts bullish and lifting estimates to align with reality. Agentic AI is the cybersecurity driver, and we’re in the very earliest phases of agentic rollout. Investors can expect agentic traffic and security needs to grow significantly over the next few years. The article "Zscaler’s Strong Quarter Still Left Investors Waiting on 1 Key Signal" was originally published by MarketBeat. View MarketBeat's top stocks for September 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was driven by the acceleration of net new ARR growth to 17% in Q4, excluding Red Canary, as organizations increasingly adopt Zero Trust to combat AI-driven threats. Management attributes the strong finish to a successful sales transformation from opportunity-led to account-focused motions, resulting in the highest annual sales productivity since 2022. The 'Zero Trust Everywhere' strategy is gaining traction, with the number of customers adopting protection across users, branches, and clouds growing from 350 to over 950 in one year. AI is described as the largest tailwind in company history, creating demand for solutions that secure agentic communication and prevent data exfiltration in autonomous environments. Strategic positioning is reinforced by the scale of Zscaler's in-line security cloud, which processes 750 billion transactions daily to provide high-fidelity telemetry for AI-powered security. The Z-Flex model is facilitating larger, multi-year commitments by allowing customers to swap modules and bypass new procurement cycles as they expand their platform footprint. Data security remains a critical entry point, with 70% of security for AI deals this quarter including data security solutions to address new risks like prompt injections. Guidance for fiscal 2027 assumes a leadership transition period in the first half of the year following the departure of two sales leaders, with net new ARR expected to be seasonally weighted toward the second half. The company is launching an 'Agentic SecOps' solution in September 2026, aiming to disrupt traditional SOC models by using AI agents for machine-speed detection and closed-loop remediation. Free cash flow margin guidance of 23% to 23.5% accounts for elevated capital expenditures in the low teens as a percentage of revenue due to higher pricing for memory and data center components. Management expects the new Endpoint AI Security and Zero Trust Exchange for agents to begin scaling meaningfully in the second half of fiscal 2027. Growth strategy includes expanding sales coverage in the mid-market and commercial segments through a 100% channel-led motion in partnership with Carahsoft. A workforce restructuring affecting approximately 3% of employees is being implemented to reallocate resources toward AI initiatives, resulting in a charge of $30 million to $33 million. CapEx reached 8% of revenue in fiscal 2026 due to opportunistic acceleration of equipment purchases to mitigate tight availability of processors and storage. Red Canary's contribution is shifting from a standalone business to an integrated component of the SecOps platform, with management noting elevated churn typical of the MDR market during this transition. Management highlighted the shrinking window between vulnerability discovery and exploitation as a systemic risk that necessitates automated, AI-driven defense over human-centric patching. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management confirmed that while two leaders departed, the vertical role was backfilled internally and a new geo leader has accepted an offer. The fiscal 2027 guidance explicitly reflects the time required to onboard these new leaders during the first half of the year. Jay Chaudhry emphasized that Zscaler's solution is 'agent native,' allowing for detection and investigation at machine speed rather than relying on human-driven automation. The solution leverages Zscaler's unique in-line telemetry to enable 'closed-loop remediation' in minutes rather than the days or weeks required by legacy vendors. Non-seat-based metered usage solutions, including workload and branch security, contributed approximately 30% of new and upsell ACV in fiscal 2026. Security for AI products are primarily consumption-based, linked to query and token volume, providing a different growth lever than traditional user-based licensing. Management noted they took a conservative approach to Red Canary's ARR at acquisition due to uncertainty regarding durability. While the MDR business experiences higher churn than Zscaler's core business, the acquisition successfully provided the expertise and technology needed for the upcoming Agentic SecOps launch.