What are the main concerns in Zscaler, Inc.'s latest SEC filing?

The analysis identified 5 key concerns: Significant capitalization of internal-use software; SBC represents 6.66% of revenue, indicating a moderate level of dilution.; The company has non-cancelable purchase obligations for products and services, including cloud infrastructure, technology equipment, and consulting, with no specified maximum exposure amount disclosed..

What are the top risks for Zscaler, Inc. (ZS)?

The top risks identified in the 10-Q filing are: Competitive Landscape and Market Adoption, Customer Retention and Acquisition, cyber_technology. The company faces significant competitive and customer-related risks, with high potential impact from cybersecurity threats and service disruptions. Geopolitical and capital structure risks are also present.

ZS - Comprehensive Filing Intelligence

Q1 2026•10-Q•Filed Nov 25, 2025

6.0/10

Filing Health:GOOD

Solid fundamentals with minor concerns to monitor

Executive Summary

Revenue grew 26% year-over-year, driven by new and existing customers and the Red Canary acquisition.. Gross margin remained stable at 77%, despite increased costs in data center operations and employee expenses.. The company has non-cancelable purchase obligations for products and services, including cloud infrastructure, technology equipment, and consulting, with no specified maximum exposure amount disclosed.. Revenue increased 26% to $788.1 million

Top Concerns

!Significant capitalization of internal-use software
!SBC represents 6.66% of revenue, indicating a moderate level of dilution.
!The company has non-cancelable purchase obligations for products and services, including cloud infrastructure, technology equipment, and consulting, with no specified maximum exposure amount disclosed.
!Competitive Landscape and Market Adoption (high)
!Customer Retention and Acquisition (high)

Analysis Dimensions

Our 5-pass AI analysis examines this filing across multiple dimensions. Each dimension score is derived from direct analysis of SEC filing text.

Narrative Intelligence

7.0/10

Management tone is confidently optimistic with focus on data center and equipment-related costs for hosting and operating our cloud platform.

Full analysis includes: tone changes vs prior quarter, margin driver breakdown, forward guidance analysis, strategic priorities.

Accounting Quality

7.0/10

Earnings quality shows aggressive accounting practices.

Full analysis includes: reserve and allowance changes, non-recurring item analysis, stock-based compensation impact, disclosure concerns.

Hidden Liabilities

Off-balance sheet risk is low.

Full analysis includes: cloud and purchase commitments, VIE/SPE exposure, covenant compliance status, refinancing risk assessment.

Risk Landscape

3.0/10

Overall risk profile shows competitive landscape and market adoption as primary concern.

Full analysis includes: 8 risk categories with severity, new vs escalated risks, management response assessment, risk trend analysis.

Segment Performance

7.0/10

Segment health analysis.

Full analysis includes: segment-by-segment revenue breakdown, geographic concentration risk, customer concentration analysis, segment margin trends.