Zscaler

Posted on | by Leon Hinde | Leave a Comment on Zscaler

Zscaler, Inc. – Common

Despite delivering a strong “beat” on both top and bottom lines for the quarter, the stock tumbled in extended trading. This sell-off was primarily driven by mixed Q4 revenue guidance and near-term cautious commentary on hardware costs and sales team transitions.

Q3 FY2026 Financial Highlights (The “Beat”)

  • Revenue: $850.5 million (up 25% YoY), beating Wall Street expectations of $835.6 million.
  • Non-GAAP EPS: $1.08, outpacing analyst projections of $1.01.
  • Annual Recurring Revenue (ARR): Reached $3.525 billion, up 25% YoY (up 21% excluding the Red Canary acquisition, which contributed $127 million).
  • Operating Margin: Hit a record all-time high of 23% (non-GAAP).
  • Free Cash Flow (FCF): $136.0 million (up 14% YoY), representing a robust FCF margin.