Zscaler Reports 25% Revenue Growth to $850.5 Million, Net Loss Widens

Zscaler, Inc. reported significant financial growth in its latest quarterly filing, with revenue reaching $850.5 million for the three months ended April 30, 2026, a 25% increase from $678.0 million in the same period last year. For the nine months ending April 30, 2026, revenue totaled $2.45 billion, up 26% from $1.95 billion in the prior year. Despite this growth, the company continues to experience net losses, reporting a net loss of $13.9 million for the latest quarter, compared to a loss of $4.1 million in the same quarter of the previous year. The nine-month net loss also widened to $59.8 million from $23.9 million year-over-year.

The increase in revenue was primarily driven by additional subscriptions from existing customers, contributing $102.7 million, alongside a 17% growth in the customer base. Zscaler's total customer count exceeded 9,400, with notable expansion in its user base across various regions, including the United States, Europe, and Asia. The company’s gross margin remained stable at 77% for both the three and nine months ended April 30, 2026, indicating effective cost management despite rising operational expenses.

Zscaler has made strategic moves to enhance its market position, including the acquisition of SquareX, Inc. for $112.8 million, aimed at bolstering its browser security capabilities. The company also acquired SPLXAI Inc. and Red Canary Inc. in previous quarters, further expanding its artificial intelligence and security offerings. These acquisitions are expected to contribute to Zscaler's growth and innovation in the cybersecurity space. The company continues to invest heavily in research and development, with expenses rising 37% year-over-year to $232.3 million for the latest quarter, reflecting its commitment to enhancing its cloud platform.

Operationally, Zscaler reported a total deferred revenue of $2.48 billion as of April 30, 2026, indicating strong future revenue recognition potential. The company’s cash and cash equivalents decreased significantly to $982.1 million from $2.39 billion at the end of the previous fiscal year, primarily due to substantial investments in short-term securities and acquisitions. Zscaler's outlook remains cautious, as it anticipates continued net losses while investing in growth initiatives, particularly in sales and marketing, to capture a larger share of the cybersecurity market.

Looking ahead, Zscaler expects to maintain its growth trajectory, driven by the increasing demand for cloud security solutions amid rising cybersecurity threats. The company plans to continue leveraging its existing customer relationships while expanding its product offerings, particularly in AI-driven security solutions. However, it acknowledges potential challenges from macroeconomic conditions that may impact customer purchasing decisions and sales cycles.