Slide 1: Q3 Fiscal 2026 Shareholder Letter
Q3 Fiscal 2026 Shareholder Letter May 2026
Slide 2: Forward-Looking Statements
Forward-Looking Statements Unless otherwise noted, all numbers presented will be on an adjusted, non-GAAP basis. Reconciliation of GAAP to non-GAAP financial measures is in the appendix of this shareholder letter. This shareholder letter has been prepared by Zscaler, Inc. (“Zscaler”) for information
Slide 3: From Our CEO
From Our CEO Fellow Shareholders, We delivered strong Q3 results. ARR grew 25% and non-GAAP operating margin hit an all-time high at 23%. AI is changing the nature of cybersecurity in real time, and Zscaler is the cybersecurity platform for the AI era. This is evident in our results and the reason w
Slide 4: Zscaler: The complete Zero Trust SASE solution
Zscaler: The complete Zero Trust SASE solution We offer the industry’s only complete Zero Trust SASE solution, a singular Zero Trust platform across users, across cloud workloads, and across branches. Our architecture is purpose-built to address the limitations of firewall-based SASE solutions, and
Slide 5: Navigating a rapidly expanding threat environment
Navigating a rapidly expanding threat environment These differentiators are especially Making it even more challenging, new important at a time when organizations powerful frontier AI models like Mythos are aggressively deploying AI are finding security vulnerabilities in applications and models, wi
Slide 6: A modern defense approach: can't breach what you can't reach
A modern defense approach: can’t breach what you can’t reach To tackle this challenge, the market We are also partnering with Anthropic needs to take a different approach. We on Project Glasswing and with OpenAI provide the two most important defenses as part of its Daybreak program, against these v
Slide 7: Enhancing our go-to-market partnerships
Enhancing our go-to-market partnerships GSI Partnerships Cloud Marketplace We continue to deepen our partnership We are also continuing to expand our with Global System Integrators, or GSIs, cloud marketplace motion. For fiscal who play a meaningful role in expanding 2026 year-to-date, we transacted
Slide 8: AI Protect bookings crossed $100 million
AI Protect bookings crossed $100 million AI Protect includes AI asset discovery, For customers building their own AI AI guardrails, and continuous Red models and applications, our AI Red Teaming. Zscaler AI Protect provides a Teaming solution performs continuous single, integrated way to discover an
Slide 9: Data Security ARR crossed $500 million
Data Security ARR crossed $500 million Data Security crossed $500 million ARR, up over 30% year over year. As AI adoption accelerates and sensitive data increasingly resides across multiple locations, customers are reducing cost and complexity by consolidating onto our data security solution. • Prev
Slide 10: Zero Trust Branch momentum remains strong
Zero Trust Branch momentum remains strong • Zero Trust Branch disrupts branch Large opportunity with firewalls, Software Defined Wide Area millions of branches Networks or SD-WAN, and MPLS yet to transform to Zero Trust networks. across industries • We are seeing particular momentum with Zero Trust
Slide 11: Driving platform adoption with new logos and existing customers
Driving platform adoption with new logos and existing customers • Received an inbound request after a senior technology leader joined from another Healthcare customer where he had a great experience Technology deploying Zscaler. Company • Initial discussions started around securing New Logo, users;
Slide 12: Zero Trust Everywhere momentum continues
Zero Trust Everywhere momentum continues The strength we’re seeing in Zero Trust Customers are recognizing that it is no Cloud and Zero Trust Branch is driving longer enough to just secure their users, the growth of Zero Trust Everywhere and our platform is the industry’s only enterprises that purch
Slide 13: CEO closing remarks - Jay Chaudhry
In summary, we are confident Zscaler is the cybersecurity platform for the AI era. We expect AI and Mythos-like frontier models to be one of the strongest tailwinds our business has ever seen. Our Zero Trust SASE solution enables us to hide applications and make them invisible to attackers while als
Slide 14: From Our CFO
From Our CFO We delivered strong Q3 26 results, growing revenue 25% while investing with discipline. Year-to-date, with 26% revenue growth and a 29% free cash flow margin, we achieved Rule of 55 performance. Q3 Guidance Q3 Results Q3 Results vs. Guidance $834M - $836M $850M Revenue Exceeded ~23% y/y
Slide 15: Delivered strong net new ARR
Delivered strong net new ARR • Our Q3 26 net new ARR was $166 million, • Excluding the contribution from our up 24%, bringing total ARR to $3.5 billion, acquisition of Red Canary, net new up 25% year-over-year. ARR was $153 million, up 14% year- over-year, and total ARR was also up • Net new ARR ben
Slide 16: Robust revenue growth Continued traction in Z-Flex deals
Robust revenue growth Continued traction in Z-Flex deals • Revenue of $850 million grew 25% • Our go-to-market strategy is a key year-over-year and 4% sequentially, growth lever, enabling us to deepen exceeding the high end of our customer relationships, accelerate guidance. platform adoption, and e
Slide 17: Z-Flex Deal Wins in Q3
Z-Flex Deal Wins in Q3 • Customer spending more than $5 million with Fortune 500 us annually, increased their ARR by nearly Finance & 50%. • This customer expanded module adoption Insurance across 4 existing modules and adopted 6 Upsell, new modules, including our AI Protect 5-year, 8-figure deal so
Slide 18: Record operating margins Outlook
Record operating margins Outlook • Turning to operating performance, non- I’d like to provide an update on GAAP gross margin was 80.7% increasing memory, storage, and compared to 80.3% a year ago. processor prices and availability. As a reminder, we purchase equipment for • Non-GAAP operating income
Slide 19: Q4 and FY26 Guidance
Q4 and FY26 Guidance1 Let me provide our outlook for Q4 and full-year fiscal 2026. As a reminder, these numbers are all on a non-GAAP basis. • At the end of the third quarter, two sales leaders departed the company. We already appointed a replacement for one of these leaders, and we are in the late
Slide 20: Preliminary thoughts on FY27
Preliminary thoughts on FY27 Looking to fiscal 2027, I'd like to provide some early perspectives to better align expectations heading into our second year with ARR as our primary growth metric, and following the acquisition of Red Canary. Sitting here today, our view is for total ARR and revenue gro
Slide 21: CFO closing remarks - Kevin Rubin
In summary, we are pleased with the results we delivered year-to-date in fiscal 2026. We achieved 25% year-over-year ARR growth and record operating income. We also saw continued momentum with Z- Flex and closed a record number of $1 million-plus ARR deals for a Q3. The opportunity ahead of us is su
Slide 22: Other key business and financial metrics
Other key business and financial metrics $100K+ ARR Customers2 $1M+ ARR Customers2 16% CAGR 4,003 18% CAGR 3,886 748 3,754 728 698 3,494 664 3,281 3,357 619 633 3,087 3,154 584 564 Q4 24 Q1 25 Q2 25 Q3 25 Q4 25 Q1 26 Q2 26 Q3 26 Q4 24 Q1 25 Q2 25 Q3 25 Q4 25 Q1 26 Q2 26 Q3 26 Annual Recurring Revenu
Slide 23: Other key business and financial metrics
Other key business and financial metrics Gross Profit & Margin 81% 80% 81% Key factors • Gross margins were in- $687 line with our guidance $544 and long-term targets $450 Q3'24 Q3'25 Q3'26 Gross Profit Gross Margin Operating Profit & Margin 23% 22% 22% Key factors • Leverage in our financial model
Slide 24: Financial Appendix
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Slide 25: Explanation of Non-GAAP Financial Measures
Explanation of Non-GAAP Financial Measures IIn addition to our results determined in accordance with generally accepted accounting principles in the United States of America ("GAAP"), we believe the following non-GAAP measures are useful in evaluating our operating performance. We use the following
Slide 26: Definitions of Non-GAAP Financial Measures
Definitions of Non-GAAP Financial Measures Non-GAAP Gross Profit and Non-GAAP Gross Margin. We define non-GAAP gross profit as GAAP gross profit excluding stock-based compensation expense and related employer payroll taxes, and amortization expense of acquired intangible assets. We define non-GAAP g
Slide 27: Appendix A
Appendix A ($ in thousands, except percentages) Gross profit & Margin Q3 26 Q3 25 Q3 24 GAAP gross profit $657,823 $522,056 $434,870 Add: Stock-based compensation expense and 21,629 18,262 12,487 related payroll taxes Amortization expense of acquired intangible 7,243 3,830 2,962 assets Non-GAAP gros
Slide 28: Appendix A (cont.)
Appendix A (cont.) ($ in thousands, except percentages) Non-GAAP Net Income and Non-GAAP Net Income per Share, Q3 26 Q3 25 Q3 24 Diluted GAAP net income (loss) $(13,883) $(4,125) $19,124 Add: GAAP provision for income taxes 11,512 8,688 1,742 GAAP income (loss) before income taxes (2,371) 4,563 20,8
Slide 29: Appendix A (cont.)
Appendix A (cont.) ($ in thousands, except percentages) Free Cash Flow & Margin YTD Q3 26 Q3 26 Q3 25 Q3 24 Free Cash Flow Net cash provided by operating activities $850,369 $198,016 $211,081 $173,414 Less: Purchases of property, equipment and other (77,467) (42,401) (72,163) (35,651) assets Capital
Slide 30: About Zscaler
About Zscaler Founded in Leading Cloud Strong growth at scale 2007 Security Platform PERFORMING BEYOND RULE-OF-40 Redefining network security, with the world’s largest in-line security cloud $3.5B+ 25% 16% annual recurring growth y/y FCF and a 100% SaaS business model. revenue2 revenue3 margin3 $100
Slide 31: The leader in secure digital transformation
The leader in secure digital transformation World’s Largest Security Cloud 50M+ ~1T Users secured across AI transactions >9,400 customers1 processed in CY25 500B+ 500T+ Daily transactions Daily signals >20x Google searches2 powering AI/ML Pioneer And Market Leader ~40% >45% Global 2000 Fortune 500 a
Slide 32: Glossary
Glossary Product/Solution Description One of Zscaler’s three growth pillars. Includes AI-Protect and Agentic AI-Security Operations. Leverages AI to provides solutions for IT Operations and Security Agentic Operations Operations. Includes Agentic IT Ops and Agentic SecOps. Accelerates the identifica
Slide 33: Glossary
Glossary Product/Solution Description Leverages AI-powered insights and 24/7 monitoring to resolve performance. It includes ZDX Copilot, which enables IT teams to instantly troubleshoot and optimize digital experiences through natural language ZDX Advanced Plus queries, and will leverage agents to a
Slide 34: Glossary
Glossary Zscaler Architecture Firewalls are like bridges Zscaler is like a switchboard Connects to a network, where Securely connects one-to-one based on everything is trusted, even attackers policies, not to the network ATTACK SURFACE PASSTHROUGH ARCHITECTURE NETWORK ACCESS LATERAL THREAT MOVEMENT
Slide 35: Glossary
Glossary AI Protect: AI Asset Management AI Asset Management AI Inventory AI Data Security 1 Discover AI Models, 3 Map AI overreach into Agents and Services data and close risks AI Data AI Governance Control AI Supply Responsible AI 2 Chain 4 Prioritize and mitigate and assess readiness LLM risks Wi
Slide 36: Glossary
Glossary AI Protect: Red Teaming Support broad range of AI Variety of Red Teaming Library of simulated Dev Environments tests attacks Security 5,000+ attacks Context Leakage Context Leakage Data Exfiltration Data Exfiltration RAG Poisoning RAG Poisoning Jailbreak Jailbreak Jailbreak Safety Bias Priv