Zscaler Earnings Call Transcripts
Fiscal Year 2026
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Strong Q2 growth was driven by record large deals, expanding non-seat-based ARR, and rapid adoption of AI and data security solutions. Product innovation in AI security and Zero Trust is fueling differentiation, while disciplined M&A and improved channel partnerships support long-term growth ambitions.
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Q2 2026 saw 26% revenue and 25% ARR growth, driven by strong demand for AI security and Zero Trust solutions. Guidance was raised for the second half, with robust pipeline and continued momentum in large enterprise deals and Z-Flex program adoption.
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Directors and officers were introduced, and key proposals included board declassification and executive compensation. All management and shareholder proposals, including annual director elections, were approved by vote.
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Q1 delivered 26% ARR and revenue growth, with all three growth pillars accelerating and AI Security ARR surpassing targets. Z-Flex drove strong upsells, and guidance was raised for FY26. The company remains well-positioned in a stable competitive landscape.
Fiscal Year 2025
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Q1 saw 26% ARR growth and strong performance from both organic business and Red Canary. The company surpassed its Zero Trust Everywhere customer target early, with significant ARR contributions from Data Security and AI Security pillars. Large market opportunity and disciplined financial strategy support ambitious growth targets.
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Strong ARR growth and platform expansion are driven by Zero Trust adoption, AI security, and integrated data protection. Recent organizational changes improved sales efficiency, while targeted acquisitions enhance platform capabilities. AI and Zero Trust trends are shaping future growth.
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Surpassing $3 billion in ARR, the company is now focused on ARR as its primary growth metric, with fiscal 2026 guidance targeting 22%-23% growth. Expansion in zero trust, data security, and AI-driven security operations, supported by acquisitions like Red Canary, positions the business for continued innovation and upsell opportunities.
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Q4 2025 saw 21% revenue growth and record operating margin, with ARR surpassing $3B. Strong adoption of AI Security, Zero Trust, and Data Security drove results, and guidance for fiscal 2026 projects continued 22%+ growth, supported by the Red Canary acquisition.
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Zero Trust is expanding beyond users to branches, workloads, and AI agents, with strong growth in data security and agentic operations. Sales productivity has improved after restructuring, and upsell activity is robust, supported by flexible product modules and pricing.
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Zero Trust Everywhere now covers users, workloads, IoT, and AI agents, with AI and agentic operations embedded throughout the platform. Innovations in branch and cloud security, combined with flexible purchasing and a focus on large enterprise and verticals, are driving growth and customer adoption.
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Q3 saw record bookings, strong ARR growth, and robust adoption of new solutions, with revenue up 23% year-over-year. Guidance for FY25 was raised across all metrics, and the Red Canary acquisition is set to enhance AI and SOC capabilities.
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Cybersecurity demand is rising as organizations seek Zero Trust and cost savings, with AI both expanding threats and enabling advanced protection. The company focuses on large enterprises, evolving its platform and go-to-market strategy, while maintaining strong profitability and investing for growth.
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Q2 revenue and ARR grew 23% year-over-year, with strong operating profit and free cash flow margins. The Zero Trust Everywhere initiative is gaining traction, large customer momentum continues, and AI-driven products are accelerating growth. Guidance for FY25 was raised, reflecting confidence in pipeline and execution.
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The meeting covered director elections, auditor ratification, executive compensation, and an equity plan amendment, all of which were approved by majority vote. Voting procedures and governance protocols were followed, with no questions from stakeholders.
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The conference highlighted platform expansion into AI, IoT/OT, and branch security, with AI-driven features boosting deal value and operational efficiency. Strong customer adoption, resilient cybersecurity budgets, and new leadership appointments position the company for continued growth.
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Q1 FY25 saw revenue up 26% year-over-year, bookings growth over 30%, and record profitability, driven by strong demand for Zero Trust and AI solutions. Guidance for FY25 was raised, with emerging products and data protection fueling large deals and upsells.
Fiscal Year 2024
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FY 2025 growth is back-half weighted due to scheduled billings, with strong underlying business momentum and increased sales productivity expected. Leadership upgrades and a focus on large enterprise cross-sell, platform innovation, and high margins position the company for continued expansion.
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Q4 saw strong revenue, record bookings, and robust free cash flow, with ARR surpassing $2.5 billion. Fiscal 2025 guidance reflects a back-end weighted billings ramp, driven by sales transformation and large enterprise focus. Significant upsell and federal opportunities remain, with continued investment in go-to-market, R&D, and cloud.
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Q4 and full-year results exceeded guidance, with strong revenue, billings, and profitability growth. Platform expansion, AI analytics, and large enterprise wins drove momentum, while Fiscal 2025 guidance points to continued double-digit growth and increased investment in cloud and AI infrastructure.
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The event highlighted major platform expansion into data protection, Zero Trust networking, and AI-driven analytics, growing the addressable market to $96B. Strategic sales transformation, new product bundling, and strong customer adoption are driving growth, with customers citing simplified operations and improved risk management.
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Q3 saw significant outperformance and strong market demand, driven by a broadening Zero Trust platform and deep enterprise engagement. Upsell and expansion opportunities remain robust, with continued focus on cloud-native security and differentiated architecture.