Zscaler reports 25% ARR growth, raises AI security focus

Zscaler (NASDAQ: ZS ) held its fourth-quarter earnings conference call on Thursday.

Below is the complete transcript from the call.

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The full earnings call is available at Summary Zscaler reported strong financial performance with a 25% increase in Annual Recurring Revenue (ARR) and a record non-GAAP operating margin of 24.3% for Q4 2026.

The company highlighted significant demand for its AI security solutions, with Security for AI bookings increasing more than 50% sequentially in Q4.

Zscaler's future outlook for fiscal 2027 includes projected ARR growth of approximately 16.6% to 17.4%, revenue growth of 16.9% to 17.5%, and a continued focus on expanding its AI security and Zero Trust platforms.

Operational highlights include record large-deal activity and a significant increase in pipeline for Security for AI, indicating strong future demand.

Management emphasized the importance of AI as a growth driver, the integration of Red Canary's technology, and strategic hiring to enhance sales productivity.

Full Transcript OPERATOR Good day and thank you for standing by.

Welcome to the Zscaler fourth quarter 2026 earnings call.

At this time, all participants are in a listen-only mode.

Please be advised that today's conference is being recorded.

After the speaker's presentation, there will be a question-and-answer session.

To ask a question, please press star 11 on your telephone and wait for your name to be announced.

To withdraw your question, please press star 11 again.

I would now like to hand the conference over to your speaker today, Kim Watkins, SVP, Investor Relations and Strategic Finance.

Kim Watkins, SVP Investor Relations and Strategic Finance Good afternoon and thank you for joining us today.

Welcome to Zscaler's fourth quarter fiscal 2026 earnings conference call.

On the call with me today are Jay Chaudhry, Chairman and CEO, and Kevin Rubin, CFO.

Please note that we posted our earnings release, shareholder letter, and a supplemental financial schedule to our Investor Relations website.

Unless otherwise noted, all numbers we talk about today will be on an adjusted non-GAAP basis.

You will find a reconciliation of GAAP to the non-GAAP financial measures in our earnings release.

Before we get started, I'd like to remind you that today's discussion will contain forward-looking statements, including but not limited to the Company's anticipated future revenue, Annual Recurring Revenue, Net New Annual Recurring Revenue, Operating Margin, Gross Margin, Operating Profit, Net Other Income, Earnings per Share, and Free Cash Flow margin; our customer response to our products; our expectations regarding AI and its impact on our business and customers; and our market share and market opportunity and our objectives and outlook.

These statements and other comments are not guarantees of future performance, but rather are subject to risk and uncertainty, some of which are beyond our control.

These forward-looking statements apply as of today and you should not rely on them as representing our views in the future.

We undertake no obligation to update these statements after this call.

For a more complete discussion of the risks and uncertainties, please see our filings with the SEC as well as in today's earnings release.

I also want to inform you that we'll be attending the following conferences: the Citi 2026 Global TMT Conference on September 9, Goldman Sachs Communacopia and Technology Conference on September 9, Wolfe Research TMT Conference 2026 on September 9, and JPMorgan 2026 Software Forum on October 1.

And with that, I'll turn the call over to Jay.

Jay Chaudhry, CEO, Chairman & Founder Thank you, Kim.

Good afternoon, everyone.

We delivered a strong finish to the fiscal year with 25% ARR growth and a non-GAAP operating margin of 24%.

We are seeing significant positive trends in net new ARR, with growth excluding Red Canary accelerating to 17% in Q4.

These results reflect increasing market adoption of our Zero Trust platform.

AI is quickly becoming the largest tailwind we have ever seen, driving demand for our Zero Trust Everywhere, data security, and Security for AI solutions.