Sep 3, 2026 earnings call — AI security and Zero Trust expansion
Company reported Q4 revenue $898 million and ARR growth 25%, with net new ARR $246 million and record non-GAAP operating margin 24.3%.
Revenue $0.9B (est $0.9B) · EPS $1.19 (est $1.09) · Next-quarter revenue outlook $0.9B–$0.9B
Key quotes
"Security for AI bookings increased more than 50% sequentially in Q4 on top of a strong Q3."
"We exited Q4 with more than 950 Zero Trust Everywhere enterprises versus over 700 in Q3 and over 350 at the end of fiscal 2025."
"We delivered strong Q4 results with revenue and ARR both growing 25% year-over-year, net new ARR growing 24% and non-GAAP operating margin reaching a record 24.3%."
Analyst Q&A 10
sales churn and productivity
Q (Saket Kalia · Barclays): Analyst asked how recent sales churn affected productivity and whether the churn has stabilized going into fiscal 2027.
A: Management said they transformed sales from opportunity-led to account-focused and Q4 showed the changes are working. They said Q4 had the highest sales productivity and noted 2 sales leaders left but have been backfilled; a new geo leader accepted an offer and the leadership transition should play out in the first half of the fiscal year and is reflected in guidance.
"If you look at the sales productivity, actually, the sales productivity in Q4 was the highest." — Jagtar Chaudhry (CEO·CHAIR)
what drove ARR acceleration
Q (Fatima Boolani · Citi): Analyst asked which factors drove the organic net new acceleration in the quarter and how new logo activity performed.
A: Management said Q4 was strong across metrics, with Zero Trust Everywhere, Zero Trust Branch, data security and early security for AI all performing well. They added that NRR was consistent each quarter at 115% and they saw a 75% sequential increase in pipeline for security for AI; Fortune 500 penetration rose to 50% and they had a record quarter of $1 million-plus new ACV deals.
"NRR, although it's not a metric that we provide each and every quarter, it was consistent each quarter this year at 115%." — Kevin Rubin (CFO)
why win AI security deals
Q (Roger Boyd · UBS): Analyst asked what is happening in AI security bake-offs and why Zscaler wins large deals over platform competitors.
A: Management said customers prefer an integrated solution that works across AI security and the rest of security, not many standalone AI tools. They said for customers already using Zero Trust Everywhere it was natural to expand into AI security with Zscaler, and their differentiation includes access graph, asset management and agentic communication capabilities.
"They're looking for an integrated solution, not only for AI security, but also that works with the rest of security as well." — Jagtar Chaudhry (CEO·CHAIR)
federal vertical performance
Q (Richard Poland · Wells Fargo): Analyst asked about federal vertical results this quarter and any implications heading into the fiscal year end.
A: Management said federal contributed high single digits to new ACV in '26, similar to '25, and they expect similar contribution in fiscal '27. They noted nothing particular to call out, though the environment was difficult earlier in the year.
"The federal business contributed high single digits to new ACV in '26." — Kevin Rubin (CFO)
Symmetry and non-seat revenue mix
Q (Joseph Gallo · Jefferies): Analyst asked how much Symmetry contributed to net new ARR in 4Q and whether non-seat revenue will be a larger mix in fiscal '27.
A: Management said Symmetry was largely a technology and talent acquisition with very little revenue, and it provides access graph technology important for agents, cloud workloads and devices. They explained many newer offerings are consumption- or workload-based rather than user-seat based, and Kevin said the Symmetry results are immaterial to their results.
"The results are immaterial to our results, and nothing else to call out there." — Kevin Rubin (CFO)
headcount changes and new reps
Q (John DiFucci · Guggenheim): Analyst asked which employees will be affected by the restructuring, net headcount effect, where new reps will be added, and whether hiring is driven by AI demand or general productivity.
A: Management said the reduction is a rebalancing and reallocation of resources and that the restructuring is about 3% with roughly $30 million to $33 million in charges. They said they are adding specialty teams and account executives, especially to cover lower-end enterprise and channel, and that hiring is driven both by strong sales productivity and AI tailwinds.
"Maybe just to also double down on what Jay mentioned, Mike is adding people to the organization, both to address opportunities we have with new logos as well as upsell." — Kevin Rubin (CFO)
Red Canary renewals and churn
Q (Brian Essex · JPMorgan): Analyst asked about the health of the Red Canary business, renewal experience after a year, and expectations for growth and churn going forward.
A: Management said Red Canary was acquired for agentic technology and SecOps expertise and its technology has been integrated into their Agentic SOC. They said they took a conservative approach to ARR at close, maintained the book through integration, do not expect standalone net new ARR from Red Canary going forward, and that elevated MDR-style churn in '26 has been expected and is contemplated in their guide.
"We did see elevated churn in Red Canary's business in '26." — Kevin Rubin (CFO)
Z-Flex adoption and sales cycles
Q (Meta Marshall · Morgan Stanley): Analyst asked whether Z-Flex will be mandated more with new products and how it changes sales cycles versus traditional deals.
A: Management said Z-Flex is about giving customers flexibility, not mandating plans, letting customers start with certain products, swap products, ramp usage and avoid repeated procurement. They said Z-Flex is good for customers and business, all products will be available in Z-Flex, it reduces procurement cycles and they finished fiscal '26 with more than $1.7 billion in Z-Flex bookings.
"By giving them the flexibility there, you can start with a certain number of products, you can swap other products without going through, again, typical procurement level." — Jagtar Chaudhry (CEO·CHAIR)
ARR guide assumptions for fiscal '27
Q (Ittai Kidron · Oppenheimer & Company): Analyst asked for more color on the inputs to the fiscal '27 ARR guide, including go-to-market changes and new products.
A: Management said they are optimistic given momentum and 17% net new ARR growth in Q4 excluding Red Canary, but they accounted for time needed for sales leadership transitions and uptake of the integrated SecOps solution in the guide. They expect consistent NRR, are adding dedicated new logo reps and see product breadth and AI security as durable tailwinds, though AI security was not specifically carved out in the guidance.
"I am considering the time it will take for the sales transition that we've talked about, both in terms of the geo and the verticals as well as the pace of the uptake of the integrated SecOps solution." — Kevin Rubin (CFO)
Agentic SecOps launch details
Q (Gregg Moskowitz · Mizuho): Analyst asked what is unique about Agentic SecOps and what it will unlock for customers.
A: Management said they have extensive telemetry across network, endpoint and cloud that produces over 750 billion transaction logs per day, so they can provide more meaningful SecOps information without sending data to another vendor. They described an agent-native SecOps that detects and investigates at machine speed and enables closed-loop remediation in minutes; they expect deployments to start contributing in the second half and into fiscal '28.
"This is resulting in over 750 billion transaction logs per day." — Jagtar Chaudhry (CEO·CHAIR)