Zscaler

• Zscaler already guides fiscal 2027 ARR growth of about 16.6 to 17.4 percent, and a sales leadership transition that runs past fiscal 2027's first half could slow new business.
• Zscaler said when it completed the Red Canary acquisition that Red Canary would initially operate as a separate business unit, and Zscaler could sell less of that managed detection offering as part of its platform if integration proves difficult.
• Zscaler's fourth-quarter capex and internal use software spending rose to $218.5 million from $78.7 million a year earlier, and Zscaler's free cash flow margin could fall if Zscaler sustains spending at that level without higher operating cash flow.
• Palo Alto Networks and Netskope, which shared Gartner's 2025 security service edge Leader placement with Zscaler, could win the inline traffic relationship at enterprises Zscaler targets.

Zscaler sells to enterprises replacing VPN-based access and on-network security with controls delivered from its cloud. Zscaler argues on its ZPA page that VPNs expose remote access to the public internet and give users direct network access, which allows lateral movement. Its 10-K counts approximately 11,000 customers, including large enterprises and government agencies.

Dell'Oro reported that secure access service edge revenue grew 21 percent year over year in 1Q 2026 to over $3 billion. It reported security service edge revenue up 22 percent, with buyers expanding into SaaS control, data protection, AI usage governance and agent policy. [s4, s15, s22]

Zscaler's core products broker user connections through a proxy in its cloud. Zscaler Internet Access inspects TLS/SSL traffic and connects users directly to applications based on identity, context and business policy. Zscaler Private Access brokers one-to-one connections between authorized users and specific apps, so users never access the corporate network and apps stay hidden from the public internet.

Zscaler Data Security combines classification and data security posture management with an inline DLP proxy. Zscaler says customers can scale that DLP across web, generative AI, endpoint, email, SaaS and cloud infrastructure channels. AI Access Security uncovers shadow AI, moderates prompts and responses, and blocks sensitive data in prompts with more than 100 DLP dictionaries.

Two recent acquisitions add to the platform. SquareX brings security extensions for standard browsers on unmanaged devices, and Symmetry Systems brings an access graph that maps which identities access which data. Zscaler's 10-K reports that Zscaler acquired Symmetry Systems on May 27, 2026, for $152.9 million in cash. [s3, s4, s5, s6, s10, s11, s15]

Zscaler competes with other secure access service edge vendors for the same enterprise traffic. Dell'Oro reported that Zscaler led that market with a 21 percent revenue share in 3Q 2024, followed by Cisco, Palo Alto Networks, Broadcom, Fortinet and Netskope. In security service edge, Dell'Oro put Zscaler's share at 34 percent, ahead of Palo Alto Networks and Broadcom.

Zscaler shares Gartner's Leader placement with other vendors. CRN reported that Gartner named Zscaler, Netskope and Palo Alto Networks Leaders in its 2025 security service edge report and ranked Zscaler first on execution. Zscaler announced its fifth consecutive Leader placement in that report in 2026 and its first in Gartner's SASE Platforms report. [s16, s19, s12]

Zscaler runs a large subscription business, according to results it filed with the SEC. Fiscal 2026 revenue grew 25 percent to $3,353 million, and ARR reached $3,771 million at July 31, 2026. Red Canary contributed $141 million of that ARR, and without it ARR grew 20 percent. Zscaler said when it completed the acquisition that Red Canary would initially operate as a separate business unit within Zscaler.

Zscaler's 10-K counts approximately 11,000 customers, including over 50 percent of the Fortune 500, and Zscaler says it now protects 40 percent of the Forbes Global 2000. For fiscal 2027 Zscaler guided ARR growth of about 16.6 to 17.4 percent.

The guidance followed a change in the sales organization. The Motley Fool reported that Zscaler's stock fell 31 percent the day after its May 2026 results. At that time the company announced that two senior members of its sales department had left. MarketBeat reported in September that one had been replaced and that management expected the transition to play out during fiscal 2027's first half. [s2, s15, s12, s13, s14, s9]

Jay Chaudhry co-founded Zscaler in 2007 with K. Kailash and leads the company as CEO and chairman. Wikipedia records his earlier security companies. Verisign acquired SecureIT in 1998, Secure Computing acquired CipherTrust in 2006 for $274 million, and Motorola acquired AirDefense in 2008.

Zscaler raised $192 million in its 2018 IPO and reported fiscal 2026 revenue of $3,353 million. The 2026 leadership change Zscaler disclosed came in sales. The Motley Fool reported that Zscaler announced in May 2026 that two senior members of its sales department had left. [s17, s18, s2, s13]

Zscaler reports as a Nasdaq-listed company and files its results with the SEC. Its 10-K reports FedRAMP Moderate and High authorizations and Impact Level 5 with the DOD for both ZPA and ZIA. The same filing lists CMMC Level 2 certification, ITAR, FIPS, CJIS and SOC 1 in its US government portfolio.

Customers depend on Zscaler's platform staying available, and Zscaler says so in its 10-K. The filing states that customers need the platform to access the internet. It also states that a failure could cut users off from critical applications until the disruption ends or customers use a disaster recovery option that bypasses Zscaler's cloud. Zscaler's platform page lists more than 200 data centers. [s2, s15, s1]

Add analyzed competitors to compare them side by side with Zscaler.

Zscaler targets large enterprises and government agencies moving access and security controls from their own networks to a cloud service. Its 10-K counts approximately 11,000 customers, including over 40 percent of the Forbes Global 2000 and over 50 percent of the Fortune 500.

Zscaler sells into the US government segment under federal authorizations. The 10-K reports FedRAMP Moderate and High authorizations and Impact Level 5 with the DOD for both ZPA and ZIA.

Buyers widened secure access spending in 2026, according to Dell'Oro, which reported security service edge buyers expanding into data protection, AI usage governance and agent policy. Zscaler addresses two of those areas with its AI Access Security product and its Symmetry Systems acquisition.

Zscaler's platform enforces access and data policy on traffic it brokers in its cloud. Zscaler Internet Access inspects TLS/SSL traffic with a single-scan, multi-action engine, and Zscaler Private Access connects users to specific apps without placing them on the corporate network. Zscaler Data Security combines inline DLP with data security posture management and classification.

Zscaler sells AI security for employee use of AI and for AI infrastructure. AI Access Security uncovers shadow AI and moderates prompts and responses, and Zscaler's AI security page promotes AI discovery, red teaming automation and runtime protection. Zscaler's 10-K reports that Zscaler acquired Symmetry Systems, whose access graph maps which identities access which data, on May 27, 2026.

Zscaler describes its traffic volume as the source of its detection advantage. Its 10-K says every one of over 750 billion daily transactions enriches the threat and policy intelligence that trains its AI engines. Red Canary, which Zscaler acquired, adds 10 years of threat intelligence by Zscaler's account.

Zscaler sells mostly through channel partners, according to its 10-K, and expects most future revenue growth to come through that network. Fiscal 2026 revenue grew 25 percent to $3,353 million, and ARR reached $3,771 million, including $141 million from Red Canary.

Zscaler grows within existing accounts through additional products and flexible purchasing. Its 10-K describes the Z-Flex program, under which customers make flexible product selections within pre-negotiated spend commitments.

Zscaler's sales organization changed in 2026. The Motley Fool reported that Zscaler announced in May 2026 that two senior members of its sales department had left, and that management then issued fiscal 2027 guidance the outlet called very conservative. Zscaler guided fiscal 2027 ARR growth of about 16.6 to 17.4 percent, and MarketBeat reported that management expected the sales leadership transition to play out during that year's first half.

Zscaler sells subscriptions and expands them within accounts. Its 10-K describes the Z-Flex procurement model, under which customers make flexible product selections within pre-negotiated spend commitments.

Zscaler also sells additional users, additional solutions and premium bundles to existing customers, including non-user-based metered pricing. Its ARR reached $3,771 million at July 31, 2026.

Zscaler delivers its access controls as a cloud service that customer traffic passes through. Its 10-K states that its services direct customers' internet traffic through its cloud platform, and ZPA brokers one-to-one connections between authorized users and specific apps. Zscaler's platform page lists more than 200 data centers.

Customers depend on that service staying up. The 10-K states that customers need the platform to access the internet. It adds that an outage could cut users off from critical applications until customers switch to a disaster recovery option that bypasses Zscaler's cloud.

Zscaler delivers some lines differently. Zscaler Data Security includes data security posture management for stored data. Zscaler said when it completed the Red Canary acquisition that the managed detection and response company would initially operate as a separate business unit within Zscaler.

Zscaler holds federal authorizations for its two core access products. Its 10-K reports FedRAMP Moderate and High authorizations and Impact Level 5 with the DOD for both ZPA and ZIA. The filing also lists CMMC Level 2 certification, ITAR, FIPS, CJIS and SOC 1 in Zscaler's US government portfolio.

Zscaler reports as a Nasdaq-listed company, raised $192 million in its 2018 IPO, and files its results with the SEC. Its fiscal 2026 filing reports a GAAP net loss of $63.2 million and free cash flow of $779.1 million.

Zscaler reaches customers mostly through channel partners, according to its 10-K, and brings acquired products into its Zero Trust Exchange platform. Its acquisitions include Red Canary, SquareX and Symmetry Systems.

SquareX extends Zscaler into standard browsers. SecurityWeek reported that Zscaler expects SquareX's technology to secure users on unmanaged devices within browsers such as Google Chrome and Microsoft Edge, without a full agent or a separate browser.

Symmetry Systems adds an access graph built from access logs across SaaS applications, cloud services, data stores and AI systems. Zscaler says the graph shows which identities access which data.

Jay Chaudhry co-founded Zscaler in 2007 with K. Kailash and leads it as CEO and chairman. Wikipedia records three earlier security companies he founded or launched that were acquired, by Verisign in 1998, Secure Computing in 2006 and Motorola in 2008.

Zscaler went public in 2018. In May 2026 Zscaler announced that two senior members of its sales department had left, according to The Motley Fool, which reported that management then issued very conservative fiscal 2027 revenue guidance. MarketBeat reported in September that one had been replaced.