Zscaler's Temporary Growth Deceleration Overshadowed by Strong Long-Term Outlook

Key Facts

1Zscaler reported quarterly revenue of $850 million, up 25% year-over-year, beating guidance.

2Management guides for 22% Q4 revenue growth and 17% FY27 revenue growth.

3Zscaler achieved 100 bps non-GAAP operating margin expansion.

As cybersecurity demand continues to surge, Zscaler reported quarterly results that surpassed expectations. According to Seeking Alpha reports, the company posted revenue of $850 million in the latest quarter, up 25% year-over-year and beating prior guidance. Additionally, Zscaler achieved 100 basis points of non-GAAP operating margin expansion.

Despite the strong performance, management guides for slower revenue growth of 22% in Q4 and 17% in fiscal 2027, attributed by analysts to sales leadership volatility. However, demand for AI-driven cybersecurity solutions remains robust, underpinning the long-term outlook. Per market data, ZS closed at $132.26 on June 26, 2026, with a daily range of $125.23 to $132.54.

At the last close of $132.26, the stock remains below its earlier highs. With sustained cybersecurity demand and the rise of agentic AI adoption, analysts view the temporary growth deceleration as a buying opportunity. No immediate catalysts are on the near-term calendar, but the upcoming Q4 earnings report could provide clarity on the recovery trajectory.