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Oct 31, 2025
Zscaler Q1 2026 Earnings Report
Zscaler reported strong Q1 results with solid revenue growth and a significant increase in non-GAAP profitability.
Key Takeaways
Zscaler posted robust revenue and ARR growth in Q1 FY2026, driven by demand for its Zero Trust and AI Security platforms. Despite a GAAP net loss, the company delivered strong non-GAAP income and free cash flow.
Revenue grew to $788.1M, supported by continued demand for Zero Trust and AI Security.
Non-GAAP net income rose to $159.5M with $0.96 in non-GAAP EPS.
Free cash flow reached $413.3M, representing 52% of revenue.
Deferred revenue rose 32% YoY to $2.35B, indicating strong future billing.
Forward Guidance
Zscaler expects continued top-line growth and strong profitability in Q2 and for the full year of FY2026.
Positive Outlook
- Q2 revenue guidance set between $797M to $799M.
- Q2 non-GAAP income from operations expected between $172M and $174M.
- Q2 non-GAAP EPS projected at $0.89 to $0.90.
- Full-year revenue expected to exceed $3.28B.
- Full-year ARR guidance raised to up to $3.718B.
Challenges Ahead
- GAAP operating losses are expected to continue in the near term.
- Cash decreased due to acquisitions of SPLX and Red Canary.
- Gross margin held flat despite revenue growth, showing potential cost pressure.
- Full-year net income remains reliant on non-GAAP adjustments.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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