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# ZSCALER Posts 25% Q4 Revenue Growth, Guides FY27 to 17%
- URL: https://redfiled.com/zscaler-posts-25-q4-revenue-growth-guides-fy27-to-17/
- Published: 2026-09-04T15:05:36.000Z
- Updated: 2026-09-04T15:34:33.000Z
- Description: Fourth-quarter revenue rose 25% to $898.2 million and ARR reached $3.77 billion, but Zscaler's fiscal 2027 outlook implies a sharp slowdown.
- Author: William Hayes
- Tags: ZS, Earnings

**Zscaler (ZS)** reported fiscal fourth-quarter revenue of **$898.2 million**, up **25% year over year**, and annual recurring revenue of **$3,771 million**, also up 25%, in results filed with the SEC on **September 3, 2026**. For the full fiscal year ended July 31, 2026, revenue grew **25% to $3,353 million**. The company guided fiscal 2027 revenue to **$3.908 billion to $3.938 billion**, growth of just **16.6% to 17.5%**.

Of the **$246 million** in net new ARR added during the quarter, a meaningful share came from acquisitions. Excluding **Red Canary**, which contributed **$141 million** of ARR, total ARR grew **20% to $3,630 million** and net new ARR grew **17%** rather than 24%. Full-year revenue excluding Red Canary grew **20% to $3,209 million**.

Profitability improved on an adjusted basis. Non-GAAP income from operations was **$218.4 million**, a record **24% of revenue**, against $158.9 million and 22% a year earlier. Non-GAAP net income per share came in at **$1.19** versus **$0.89**. On a GAAP basis the company still lost **$15.5 million** from operations and **$3.4 million** in net income, narrower than the prior-year losses of $32.2 million and $17.6 million.

Cash generation was the softer line. Operating cash flow was **$279.3 million**, or 31% of revenue, but free cash flow fell to **$60.8 million**, just **7% of revenue**, from $171.9 million and 24% a year ago. The swing reflects capital expenditure and internal-use software of **$218.5 million** in the quarter versus **$78.7 million** a year earlier. Deferred revenue grew **19% to $2,926 million**.

For fiscal 2027 the company expects ARR of **$4.396 billion to $4.426 billion**, growth of roughly **16.6% to 17.4%**, non-GAAP operating income of **$924 million to $932 million**, non-GAAP EPS of **$4.86 to $4.90**, and free cash flow margin of **23.0% to 23.5%**. First-quarter revenue is guided to **$935 million to $939 million**, about **19%** growth, with non-GAAP EPS of **$1.15 to $1.16**.

CFO **Kevin Rubin** cited *strong contribution from non-seat-based solutions, continued Z-Flex momentum, record large-deal activity, and improving sales productivity*. Founder and CEO **Jay Chaudhry** framed the opportunity around agentic AI, saying the company is *uniquely equipped to help companies both combat the threats created by agentic AI and securely deploy AI agents and models*.

Zscaler also changed its non-GAAP presentation, adopting a long-term projected non-GAAP tax rate of **21%**, down from **23%**, applied prospectively following the enactment of the One Big Beautiful Bill Act. The filing was categorized under results of operations and **restructuring costs**.

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