Q2 2026 Zscaler Inc Earnings Call Transcript

Feb 26, 2026 / 09:30 PM GMT

Transcript 10-Q8-K

Key Points

Positve

Zscaler Inc (ZS) reported a 25% year-over-year growth in Annual Recurring Revenue (ARR), reflecting strong demand for its platform.
The company is expanding its AI security solutions, which are seeing rapid adoption and represent a significant growth opportunity.
Zscaler Inc (ZS) achieved a record number of $1 million-plus deals in Q2, indicating strong sales execution and customer interest.
The company's ZFlex program is driving meaningful upsell and shorter sales cycles, contributing to increased Total Contract Value (TCV).
Zscaler Inc (ZS) is well-positioned to capitalize on the growing demand for AI security, with its Zero Trust architecture providing a competitive advantage.

Negative

The acquisition of Red Canary has resulted in elevated churn, which is higher than what Zscaler Inc (ZS) typically experiences.
Free cash flow margin decreased to 20.7% from 22.1% last year, driven by the timing of cash collections.
There is potential for increased costs due to rising memory, storage, and processor prices, which could impact future operations.
The integration of Red Canary is ongoing, and the company is still working through the next phase of combining teams.
Despite strong growth, the company faces competition in the market, and maintaining its competitive edge will require continued innovation and execution.

Refinitiv StreetEvents Event Transcript
E D I T E D V E R S I O N

ZS.OQ - Zscaler Inc
Q2 2026 Zscaler Inc Earnings Call
Feb 26, 2026 / 09:30PM GMT

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Presentation
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Unidentified_1 [1]
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Good day and thank you for standing by. Welcome to the Z scalar second quarter 2026 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press 11 on your telephone. You will then hear an automated message advising that your hand is raised to withdraw your question, please press 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Kim Watkins, SVP of Investor relations and strategic finance. Please go ahead.

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Unidentified_2

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