Zscaler reported strong second-quarter fiscal 2026 results, driven by robust demand across its growth pillars and disciplined execution, leading to record profitability and raised full-year ARR guidance. The company is positioning itself as the cybersecurity platform for the AI age, with significant innovation in AI security and Zero Trust adoption.
Revenue grew 26% year-over-year to $815.8 million.
positiveAnnual Recurring Revenue (ARR) grew 25% year-over-year to $3,359 million.
positiveNon-GAAP operating margin reached an all-time high of 22%.
positiveFree cash flow grew 18% year-over-year to $169.1 million, representing 21% of revenue.
positiveRaised full-year fiscal 2026 ARR guidance to 24% growth.
positiveAcquired SquareX Holdings, Inc. to advance Zero Trust browser security for the AI era.
neutralAnnounced comprehensive AI security innovations, Zscaler AI Protect.
neutralGAAP loss from operations was $51.8 million, or 6% of revenue, compared to $40.1 million, or 6% of revenue, in the second quarter of fiscal 2025.
attentionGAAP net loss was $34.3 million, compared to a net loss of $7.7 million in the second quarter of fiscal 2025.
negativeCash, cash equivalents and short-term investments decreased by $59.7 million from July 31, 2025, to $3,512.8 million as of January 31, 2026.
attentionAcquired Red Canary and SPLXAI Inc. for an aggregate purchase price consideration of $692.0 million during the first quarter of fiscal 2026.
attentionMargin expansion indicates improving profitability and operational efficiency. Measured in basis points (bps): 100 bps = 1.0%.
Forward-looking guidance is subject to change and does not constitute a guarantee. Actual results may differ materially from these estimates.
| Metric | Value | Period | Specificity | vs Prior |
|---|---|---|---|---|
| gross_margin | approximately 80% | Q1 FY2026 | — | — |
| operating_profit | $166 million to $168 million | Q1 FY2026 | — | — |
| earnings_per_share | 85 cents to 86 cents | Q1 FY2026 | — | — |
| annual_recurring_revenue | $3.676 billion to $3.698 billion | FY2026 | — | — |
| revenue | $3.265 billion to $3.284 billion | FY2026 | — | — |
| earnings_per_share | $3.64 to $3.68 | FY2026 | — | — |
| free_cash_flow_margin | approximately 26 to 26.5% | FY2026 | — | — |
Special items are non-recurring events that may distort period-over-period comparisons. Analysts typically adjust for these when calculating normalized earnings.
Zscaler is positioned as the cybersecurity platform for the AI age, securing AI and agentic workflows.
Organizations adopting AI are looking to Zscaler for trusted security solutions, representing a massive future growth opportunity.
Robust demand across AI Security, Zero Trust Everywhere, and Data Security growth pillars provides a durable runway for long-term growth.
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Operational metrics provide insight into business drivers and customer engagement beyond traditional financial measures.