Zscaler Inc

Strong Q3 performance; ARR growth and margin leverage - Revenue $850M, +25% YoY and +4% QoQ, exceeding the high end of guidance. - ARR grew +25% YoY to $3.5B; net new ARR $166M (+24% YoY). - Non-GAAP operating margin hit 23%, up +140 bps YoY (record/“all time high” leverage). - Free cash flow (FCF) margin: 16% in Q3 (down from 18% YoY) due to timing of cash collections; 29% FCF margin YTD.

Momentum driven by “Zero Trust Everywhere” and AI security; major customer/partner wins - Company positions Zscaler as the “cybersecurity platform for the AI era” with a differentiated architecture: hide apps/data (reduce attack surface) and eliminate lateral movement (reduce blast radius); claims scale via a large zero-trust exchange (160 public exchanges; 500B+ transactions/day). - Product/market traction examples cited: - $100M+ bookings for AI Protect over past 12 months; a 7-figure upsell with a Fortune 500 fintech for AI discovery/guardrails/red teaming. - Data security momentum: data security ARR >$500M, up 30%+ YoY. - Zero Trust Branch: largest branch deal in company history—8-figure upsell to deploy across ~2,000 sites, displacing firewall/VPN incumbents; Zero Trust Branch ARR ~tripled YoY. - Zero Trust Everywhere enterprises: >700 exiting Q3 vs ~550 in Q2. - Partnerships/opportunities: - GSI momentum and “Project AI Guardian” to extend Zero Trust to AI assets/agents. - Cloud marketplace TCV ~$900M YTD, >2x YoY.

AI/agent risk framing + strategic moves (opportunities) - Management argues AI agents and frontier models will accelerate exploitation: unpatched vulnerabilities and faster discovery/attack automation increase urgency for attack-surface hiding and lateral movement prevention. - Planned acquisition of Symmetry Systems (intent announced May 21): maps an “access graph” of identities ↔ applications ↔ data sources; integrating with Zscaler’s zero-trust exchange. - Partnerships with Anthropic (Project Glasswing) and OpenAI (Daybreak / formerly TAC) to proactively harden systems. - Stated expectation: AI is one of the strongest tailwinds for long-term growth; near-term pipeline impact expected more in fiscal 27 than Q4.