Zscaler Shares Surge as AI Security Demand Lifts Guidance Above Estimates

Zscaler (NASDAQ: ZS), the cloud-based cybersecurity company known for its Zero Trust network security platform, beat Wall Street’s fourth-quarter estimates and guided next year’s revenue above consensus, sending shares sharply higher in after-hours trading.

The reaction came after a pre-earnings regular session on Thursday in which ZS shares had already climbed 2.94% to close at $177.80, up from $172.73 the previous day, well within a 52-week range of $114.625 to $336.99. That move came before the earnings release and reflects the session ahead of the print, not the market’s response to the results themselves.

Q4 FY2026 revenue rose 25% year on year to $898.2 million, ahead of consensus near $877 million, while non-GAAP earnings per share of $1.19 beat estimates of $1.09 and last year’s $0.89. Chief executive Jay Chaudhry said “AI represents one of the most significant opportunities in Zscaler’s history,” pointing to demand for securing AI agents alongside users and workloads without placing them directly on the network. Chief financial officer Kevin Rubin said the quarter saw “revenue and ARR both growing 25% year over year, net new ARR growing 24%, and non-GAAP operating margin reaching a record 24%.”

Annual recurring revenue, the value of subscription contracts locked in for the year ahead, grew 25% to $3.77 billion. For FY2027, Zscaler guided revenue to $3.908 billion to $3.938 billion, growth of 16.6% to 17.5% — a deceleration from the 25% quarterly growth rate Zscaler posted in the just-reported quarter, even though the figure still cleared prior consensus, alongside non-GAAP EPS guidance of $4.86 to $4.90.

Zacks Investment Research noted the shares had been down roughly 23% year-to-date heading into the print, underperforming against a backdrop of growth-slowdown concerns that this quarter’s beat and raised guidance appeared to ease.