Zscaler, Inc.

Zscaler, Inc.

ZSInfrastructure

Zscaler is a cloud security company that built a zero-trust platform to secure users, workloads, IoT devices, and business-to-business connections.

Key figures

Data as of Jul 2026 · Pills compare vs Apr 2026
ARR Multiple
10.4x
+3.5x
ARR
$3.6B
+5.6%
YoY Growth
24.9%
-0.6pp
Market Cap
$37.3B
+51.2%
Revenue (Q)
$898M
+5.6%
Gross Margin
76.7%
-0.6pp
Op. Margin
-1.7%
+1.8pp
Rule of 40
23.2
+0.7
Magic Number
0.51
+0.13

Revenue, margins & ratios from SEC filings; market cap & ARR multiple from market data. Market cap & ARR multiple use the close of 13 Oct 2026; their pills compare vs the Jul 2026 quarter-end (6.9x).

Valuation by quarter

Current ARR Multiple: 6.9x· Forward at Q1 FY2027 guidance: 6.6x

Calculated valuation

FRAMEWORK EST.
Valuation data is not available for this company.

Strategy recommendations

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AI Replacement RiskLOW
9/ 100
LowModerateElevatedHigh

Estimated likelihood that general-purpose AI replaces this product.

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Why this rating

From the AI Risk Calculator model

Structural moats (regulation, integration depth, or proprietary data) make AI-only replacement unlikely in the near term.

What's driving the score
SecurityCategory baseline
low base
Workflow complexity5/5
-12 risk
Data moat3/5
-1 risk
Integration depthHigh
-10 risk
SegmentEnterprise
-8 risk
IndustryOther
neutral
Own AI integration2/5
+1.6 risk

Company overview

Zscaler is a cloud security company that built a zero-trust platform to secure users, workloads, IoT devices, and business-to-business connections. Jay Chaudhry founded it in 2008 in San Jose, California. Zscaler pioneered the idea of delivering security from the cloud rather than through on-premises hardware, fundamentally changing how enterprise network security works.

The core platform, the Zero Trust Exchange, processes over 400 billion transactions per day across 150+ data centers worldwide. Instead of routing traffic through corporate firewalls and VPNs, Zscaler acts as an inline cloud proxy between users and applications. It inspects all traffic in real time to enforce security policies. This eliminates the need for traditional VPN appliances, web gateways, and firewall stacks.

Zscaler Internet Access secures internet-bound traffic regardless of location. It provides secure web gateway, cloud firewall, DNS security, cloud access security broker, and data loss prevention. Zscaler Private Access replaces legacy VPNs by connecting users directly to specific applications without exposing the underlying network. Zscaler Digital Experience monitors end-to-end user experience quality across SaaS apps, networks, and devices.

Zscaler for Workloads secures cloud-to-cloud communications. Zscaler Deception deploys decoys to catch threats that evade other controls. Data protection includes cloud DLP, exact data matching, and AI-powered classification.

The target market is mid-to-large enterprises and government organizations going through digital transformation and cloud migration. Large deal activity has picked up as organizations consolidate multiple security tools onto the Zscaler platform.

Annual revenue is roughly $3.4 billion with gross margins around 78%. Revenue is subscription-based with high visibility. Net revenue retention exceeds 120%. Operating margins are improving as the company reaches scale.

AI features leverage the massive dataset of security signals. Capabilities include phishing detection, browser isolation, risk scoring, and policy recommendations. Acquisitions of Avalor for risk management and Airgap Networks for network segmentation have expanded the security intelligence toolkit.

With about 7,000 employees and a position as the dominant cloud-delivered security platform, Zscaler is the architectural backbone for enterprise zero-trust transformation.

Entity information

Industry7371: Services-Computer Programming Services
Fiscal YearJul 31
IncorporatedDelaware
Phone(408) 533-0288
Address120 HOLGER WAY, SAN JOSE, CA, 95134
Mailing address120 HOLGER WAY, SAN JOSE, CA, 95134
EIN26-1173892
Entity typeoperating
SEC industry framework06 Technology

SaaS KPIs

Reported in at least 3 quarters

Free Cash Flow Margin

22 quarters
7%
Q4 FY2026-14.0pp

Free Cash Flow

21 quarters
$60.8M
Q4 FY2026-64.1%

Non-GAAP Operating Margin

21 quarters
24%
Q4 FY2026+2.0pp

Calculated Billings

18 quarters
$784.5M
Q3 FY2025+5.6%

Non-GAAP Gross Margin

15 quarters
80%
Q4 FY2026+0.0pp

Total Customers

15 quarters
11,000
Q4 FY2026+17.0%

Management outlook

Given with Q4 FY2026 results (Jul 2026)
ReportedGuidance

Guided revenue, Q1 FY2027$935.0M – $939.0M
Midpoint$937.0M
Growth vs Q4 FY2026+4.3%
Growth vs Q1 FY2026+18.9%
Q1 FY27
Revenue growthapproximately 19% year-over-year growth
Non-GAAP gross marginapproximately 80%
Non-GAAP income from operations$215M - $217M
Non-GAAP income from operations growthapproximately 25% to 26% year-over-year growth
Non-GAAP operating margin23%
Non-GAAP net income per shareapproximately $1.15 to $1.16
Fully diluted shares outstandingapproximately 170 million
Non-GAAP tax rate21%
Full Year FY27
ARR$4.396B - $4.426B
ARR growthapproximately 16.6% to 17.4%
Revenueapproximately $3.908B - $3.938B
Revenue growth16.6% to 17.5%
Non-GAAP gross marginapproximately 80%
Non-GAAP income from operations$924M - $932M
Non-GAAP income from operations growthapproximately 21%
Non-GAAP net income per share$4.86 to $4.90
Fully diluted shares outstandingapproximately 173 million
Non-GAAP tax rate21%
Free cash flow marginapproximately 23.0 to 23.5%

Quarterly financials

Left axis in $ (Revenue, Gross profit, Net income, S&M); right axis for ratios (Rule of 40, Magic number). Click a legend item to toggle it.

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