Zscaler (NASDAQ:ZS) Releases Quarterly Earnings Results, Beats Estimates By $0.12 EPS

Zscaler (NASDAQ:ZS) released its earnings results on Thursday. The company reported $1.01 EPS for the quarter, beating analysts’ consensus estimates of $0.89 by $0.12, FiscalAI reports. The company had revenue of $815.75 million during the quarter, compared to analysts’ expectations of $798.92 million. Zscaler had a positive return on equity of 0.06% and a negative net margin of 2.25%.The firm’s revenue for the quarter was up 25.9% compared to the same quarter last year. During the same quarter last year, the business posted $0.78 EPS. Zscaler updated its Q3 2026 guidance to 1.000-1.010 EPS and its FY 2026 guidance to 3.990-4.020 EPS.

Here are the key takeaways from Zscaler’s conference call:

• Zscaler delivered a strong quarter with $816 million revenue (+26% YoY), ARR of $3.4 billion (+25%), exceeded targets and raised full‑year guidance while improving operating profit and free cash flow margins.
• Management positions Zscaler as the “cybersecurity platform for the AI age,” citing nearly 1 trillion AI transactions processed in 2025, early traction for AI Protect and agentic solutions, and customer wins with large enterprises.
• “Zero Trust Everywhere” adoption accelerated to over 550 enterprises (from ~130 a year ago); non‑seat metered offerings now represent >25% of new ACV and ARR tied to those products grew >100% YoY, aided by strong Z‑Flex bookings and record large‑deal conversions.
• The Red Canary acquisition adds MDR and agentic SOC capabilities and management raised its ARR contribution, but warned of elevated churn at Red Canary and will report it separately, creating near‑term renewal/churn risk despite higher ARR guidance.

Zscaler Price Performance

NASDAQ:ZS opened at $146.99 on Friday. The company has a market cap of $23.44 billion, a P/E ratio of -349.98, a P/E/G ratio of 341.17 and a beta of 1.02. The company has a debt-to-equity ratio of 0.86, a current ratio of 1.82 and a quick ratio of 1.82. Zscaler has a one year low of $140.56 and a one year high of $336.99. The firm’s fifty day moving average price is $198.92 and its two-hundred day moving average price is $255.20.

Insiders Place Their Bets

In other Zscaler news, insider Robert Schlossman sold 2,349 shares of the stock in a transaction on Wednesday, December 17th. The stock was sold at an average price of $232.79, for a total transaction of $546,823.71. Following the transaction, the insider owned 74,653 shares in the company, valued at $17,378,471.87. This trade represents a 3.05% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, Director James A. Beer sold 653 shares of the firm’s stock in a transaction dated Friday, January 2nd. The stock was sold at an average price of $226.72, for a total transaction of $148,048.16. Following the transaction, the director directly owned 3,485 shares in the company, valued at approximately $790,119.20. This represents a 15.78% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 19,350 shares of company stock worth $4,471,509 over the last three months. 17.20% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

Large investors have recently made changes to their positions in the business. Sivia Capital Partners LLC bought a new position in shares of Zscaler in the second quarter worth about $252,000. Empowered Funds LLC lifted its holdings in Zscaler by 9.2% in the 1st quarter. Empowered Funds LLC now owns 2,811 shares of the company’s stock worth $558,000 after purchasing an additional 238 shares in the last quarter. NewEdge Advisors LLC boosted its stake in Zscaler by 8.2% in the 1st quarter. NewEdge Advisors LLC now owns 4,899 shares of the company’s stock worth $972,000 after purchasing an additional 370 shares during the period. Integrated Wealth Concepts LLC grew its holdings in Zscaler by 19.9% during the 1st quarter. Integrated Wealth Concepts LLC now owns 1,439 shares of the company’s stock valued at $285,000 after buying an additional 239 shares in the last quarter. Finally, Canada Pension Plan Investment Board raised its position in shares of Zscaler by 85.1% during the second quarter. Canada Pension Plan Investment Board now owns 190,154 shares of the company’s stock valued at $59,697,000 after buying an additional 87,440 shares during the last quarter. 46.45% of the stock is owned by institutional investors.

More Zscaler News

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: Q2 results beat: adjusted EPS $1.01 vs. $0.89 est., revenue $815.8M vs. ~$799M est., and ARR grew ~25% year/year — signals demand momentum. GlobeNewswire: Q2 Results
• Positive Sentiment: Management is pitching AI security growth and new initiatives (AI Guard, agentic security, India AI/Cyber center with Airtel) as durable secular drivers that expand TAM beyond seat-based SaaS. CFO Interview Airtel AI Center
• Neutral Sentiment: Management issued updated forward guidance and commentary (Q3 EPS range and FY EPS range were provided), creating mixed signals that markets are parsing. Earnings Highlights
• Neutral Sentiment: Executives (CEO & CFO) gave interviews and the full call transcript is available — useful for investors wanting detail on churn, acquisitions and how AI monetization will scale. Earnings Call Transcript
• Negative Sentiment: Wider GAAP loss and higher spending: the company posted a larger net loss driven by increased sales, marketing and R&D, which pressured investor sentiment. Reuters: Wider Loss
• Negative Sentiment: Mixed/uncertain revenue outlook commentary: some outlets reported the company lowered aspects of its revenue outlook, creating confusion and weighing on the stock despite EPS beats. Benzinga: Revenue Guidance Report
• Negative Sentiment: Broad analyst price‑target cuts today from multiple firms (Canaccord, Morgan Stanley, Oppenheimer, Berenberg, Needham, and others) have amplified selling pressure even as many kept “buy/outperform” stances — the cuts compress perception of near‑term upside. MarketScreener: Analyst Cuts
• Negative Sentiment: Market reaction: investors appear to be focusing on margin/expense trajectory, competitive pressure and near-term revenue clarity rather than the company’s AI growth story — producing the stock decline. Seeking Alpha: Market Reaction

Analysts Set New Price Targets

A number of analysts have commented on ZS shares. Citigroup reduced their target price on Zscaler from $350.00 to $305.00 and set a “buy” rating for the company in a report on Tuesday, January 13th. Royal Bank Of Canada lowered their target price on Zscaler from $250.00 to $205.00 and set an “outperform” rating for the company in a report on Friday. Cantor Fitzgerald lowered their price target on shares of Zscaler from $365.00 to $300.00 and set an “overweight” rating on the stock in a report on Tuesday. Citizens Jmp reduced their target price on shares of Zscaler from $355.00 to $290.00 and set a “market outperform” rating for the company in a report on Friday. Finally, Robert W. Baird dropped their price target on shares of Zscaler from $360.00 to $300.00 and set an “outperform” rating on the stock in a research note on Monday, February 23rd. One equities research analyst has rated the stock with a Strong Buy rating, thirty-four have issued a Buy rating, six have given a Hold rating and two have given a Sell rating to the stock. According to MarketBeat.com, the stock currently has an average rating of “Moderate Buy” and a consensus price target of $274.37.

About Zscaler

Zscaler is a cloud security company that delivers a cloud-native platform to protect users, applications and data as organizations move away from traditional, network-centric security architectures. The company focuses on a zero trust approach that assumes no implicit trust for users or devices, providing secure access to the internet, SaaS applications and private applications regardless of where users are located. Zscaler positions its services as an alternative to legacy appliances and site-centric VPNs, aiming to simplify security while enabling modern, distributed workforces.

Key offerings are built around the Zscaler Zero Trust Exchange, a multi-tenant cloud platform that enforces security and access policies in-line.