Zscaler Inc

Strong fiscal Q4 and full-year performance (what’s good): - Q4 (non-GAAP): Revenue $898M (+25% YoY), ARR +25% YoY, net new ARR +24% YoY, and non-GAAP operating margin 24.3% (record for the quarter). - Full fiscal ’26: Revenue $3.4B (+25% YoY); ARR +25% YoY; non-GAAP operating margin 22.9% (+120 bps YoY); free cash flow (FCF) margin ~23% (Rule-of-40 roughly ~49% when combining growth and margin).

AI is the core demand driver + momentum visible in pipeline and product uptake (opportunity): - Management frames AI as the biggest tailwind in Zscaler’s history, driving demand for Zero Trust everywhere, data security, and security for AI. - They argue customers face a “patching race” impossible to win due to rapid vulnerability discovery and exploitation from frontier/open-weight models. - Security for AI bookings increased >50% sequentially in Q4; also noted pipeline increased ~75% sequentially for “security for AI” setups for FY’27.

Platform expansion beyond users is broadening the growth engine (opportunity / surprising strength): - Growth is increasingly driven by non-seat / metered usage solutions, with these generating about ~30% of new and upsell ACV in Q4/full year; ARR tied to these offerings grew >100% YoY. - Z-Flex remains a major vehicle for expansion: Q4 Z-Flex TCV >$770M (+60% QoQ); FY’26 Z-Flex generated >$1.7B TCV. - “Zero Trust Everywhere enterprises” accelerated materially: exited Q4 with >950, vs ~700 in Q3 and ~350 end of FY’25.