Zscaler Reports 26% Revenue Growth to $815.8 Million, Faces Increased Net Loss

Zscaler, Inc. reported significant financial growth in its latest quarterly results, with revenue reaching $815.8 million for the three months ended January 31, 2026, a 26% increase from $647.9 million in the same period last year. For the six months ending January 31, 2026, revenue totaled $1.6 billion, up from $1.3 billion in the prior year, reflecting a similar growth rate. Despite this revenue increase, the company reported a net loss of $34.3 million for the latest quarter, compared to a loss of $7.7 million in the previous year. The net loss for the six-month period also widened to $45.9 million from $19.8 million.

The company's operational metrics indicate a growing customer base, with a 15% increase in customer count year-over-year, bringing the total to over 9,400 customers. Zscaler's subscription and support revenue accounted for approximately 98% of total revenue, highlighting the company's reliance on its cloud platform. The company also noted a significant increase in operating expenses, which rose to $676.3 million for the latest quarter, driven primarily by higher sales and marketing costs, research and development investments, and general administrative expenses.

Strategically, Zscaler has made notable acquisitions, including SPLXAI Inc. and Red Canary Inc., aimed at enhancing its AI-driven security offerings. The company also announced the acquisition of SquareX Holdings, Inc. for approximately $113 million, which is expected to bolster its web-based threat protection capabilities. These acquisitions are part of Zscaler's ongoing efforts to expand its product offerings and market presence, particularly in the rapidly evolving cybersecurity landscape.

In terms of financial health, Zscaler reported total assets of $6.8 billion as of January 31, 2026, with cash and cash equivalents amounting to $1.2 billion. The company’s deferred revenue stood at $2.4 billion, indicating a strong future revenue stream from existing contracts. However, the company continues to face challenges, including macroeconomic uncertainties that may affect customer purchasing decisions and elongate sales cycles.

Looking ahead, Zscaler anticipates continued investment in its sales and marketing efforts to drive growth and expand its market share. The company expects to incur further operating losses as it prioritizes growth initiatives, including product development and customer acquisition. Zscaler's management remains optimistic about the long-term potential of its cloud platform, particularly as organizations increasingly adopt cloud-based solutions and AI technologies.