The company implements Zero Trust principles to securely connect users, devices, applications and workloads without relying on traditional network-based security. Zscaler's AI Security pillar grew over 80% year-over-year, exceeding the FY26 target of $400 million ARR three quarters earlier than expected, positioning it as a leader in both Zero Trust and emerging AI security markets.
Cyborg Score Rationale
Zscaler achieved a free cash flow margin of 52%, surpassing the rule of 40 metric. The company has successfully expanded its Zero Trust Everywhere initiative, securing over 4500 enterprises, surpassing its target three quarters ahead of schedule. Strong execution across growth pillars and AI Security momentum position the company well.
Top Insights
Annual Recurring Revenue exceeded $3.2B, growing over 25% year-over-year
AI Security pillar achieved $400 million ARR target three quarters ahead of schedule with over 80% YoY growth
The ZFlex program generated over $175 million in total contract value, growing over 70% quarter over quarter
Closed acquisitions of Red Canary and SPLX for $692.0 million to strengthen AI-driven security capabilities
Named Competitors
Prisma Access — Cloud-delivered network security and Zero Trust platform
Okta Identity Cloud — Identity and access management platform
Cloudflare One — Zero Trust security and network services platform
CrowdStrike Falcon — Endpoint detection and response with cloud security
Recent Developments
(January 2026) Unveiled Zscaler AI Security Suite to help enterprises discover, secure, and govern AI usage across development, models, agents, and infrastructure
(November 2025) Closed acquisitions of Red Canary and SPLX for aggregate purchase price of $692.0 million
(November 2025) Reported Q1 FY2026 results with ARR growth accelerating to 26% year-over-year
(August 2025) Adopted long-term projected non-GAAP tax rate of 21%, reduced from 23%, aligning with the One Big Beautiful Bill Act
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