Cloud Security Firm Leads with AI, Upgrades Guidance for Double-Digit Growth in Q3

Zscaler, Inc. (NASDAQ: ZS) reported strong third-quarter results for its fiscal 2026 year, with revenue rising 25% year-over-year to $850.5 million and annual recurring revenue (ARR) growing 25% to $3.525 billion. The company delivered a non-GAAP operating margin of 23% and achieved diluted earnings per share of $1.08.

Buoyed by robust free cash flow and a 25% increase in deferred revenue, Zscaler raised—or narrowed to the high end—its full-year fiscal 2026 guidance for ARR, revenue, non-GAAP operating income, and EPS. At the same time, it modestly lowered its free-cash-flow margin outlook to account for planned increases in capital expenditures.

In line with its growth strategy, Zscaler has deepened its AI-powered threat detection and data security capabilities through the acquisitions of Red Canary and Symmetry Systems and partnerships with Anthropic and OpenAI. The company is also accelerating its expansion into international and public-sector markets by securing additional government certifications and broadening its support for data-sovereignty requirements.

At its annual Zenith Live 2026 conference, Zscaler unveiled AI Broker, a new product designed to protect communications among AI agents, and expanded its AI security alliance program, AI-Guardian, reinforcing collaborations with AWS, Google Cloud, and OpenAI. Under its OpenAI partnership, Zscaler is integrating the latest GPT-5.5-Cyber model into its security platform and development workflows to automate code-vulnerability checks and advance threat detection.

Zscaler is a leading global provider of cloud-native zero-trust security, delivering secure Internet and SaaS access, data protection, and microsegmentation through its Zero Trust Exchange platform. As remote work, hybrid-cloud adoption, and generative AI broaden the enterprise attack surface, demand for zero-trust and AI-enhanced security solutions is surging. Strategic alliances with major cloud and AI model providers are becoming a focal point across the cybersecurity industry.