Earnings Call
May 26, 2026
Q2 FY2026
EPS Estimate
1.00
EPS Actual
1.01
Post-Earnings Close
$126.41
Earnings Reaction
-31.5%
Zscaler's fiscal Q2 2026 results came in ahead of expectations on virtually every dimension, and management followed the beat with a broad-based guidance raise, the combination that had been conspicuously absent in the prior quarter's mixed reaction. Revenue of $816 million grew 26% year-over-year, ARR reached $3.4 billion growing 25%, and the company achieved what it termed 'Rule of 62' performance in the first half, a combined revenue growth and free cash flow margin metric that places Zscaler among a narrow cohort of high-performing software businesses. EPS of $1.01 exceeded the $1.00 estimate. The full-year revenue guidance was raised to $3.309, $3.322 billion, implying roughly 24% growth, and full-year EPS guidance was lifted to $3.99, $4.02. Critically, management raised the full-year ARR midpoint by approximately $30 million on an organic basis, with net new ARR growth (excluding Red Canary) guided to approximately 9.5% for the year, a meaningful acceleration from the 1% growth posted in the same period last year.
Report generated on May 25, 2026
AI-generated earnings analysis. Not investment advice.
Chief Executive Officer
The quarter's results reflected a combination of company-specific execution and broader sector dynamics, with management addressing several of the key debates that analysts had flagged heading into the print. Guidance commentary pointed to continued momentum in the core segments, while questions on margins and capital allocation drew more nuanced responses from the leadership team over the course of the call.
The quarter's results reflected a combination of company-specific execution and broader sector dynamics, with management addressing several of the key debates that analysts had flagged heading into the print. Guidance commentary pointed to continued momentum in the core segments, while questions on margins and capital allocation drew more nuanced responses from the leadership team over the course of the call.
The quarter's results reflected a combination of company-specific execution and broader sector dynamics, with management addressing several of the key debates that analysts had flagged heading into the print. Guidance commentary pointed to continued momentum in the core segments, while questions on margins and capital allocation drew more nuanced responses from the leadership team over the course of the call.
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