Zscaler (ZS) Q2 2026 earnings summary

Executive summary

• Achieved strong Q2 2026 results with 26% revenue growth to $815.8 million and 25% ARR growth year-over-year, driven by robust demand across AI Security, Zero Trust Everywhere, and Data Security Everywhere pillars.

• Increased guidance for the second half and full year of fiscal 2026, reflecting confidence in pipeline and execution.

• AI adoption is accelerating, creating new security challenges and expanding the addressable market for Zero Trust solutions.

• Expanded customer base, with over 45% of Fortune 500 companies and 4,400 of the largest global enterprises now customers.

• Non-GAAP operating margin reached an all-time high of 22%, with non-GAAP net income per share up to $1.01 from $0.78 year-over-year.

Financial highlights

• Q2 revenue reached $816 million, up 26% year-over-year and 4% sequentially, exceeding guidance.

• Net new ARR was $156 million, up 19% year-over-year; total ARR reached $3.4 billion, up 25%.

• Free cash flow margin was 20.7% for the quarter; operating cash flow was $204 million, up 14% year-over-year.

• Non-GAAP operating income was $181 million, up 29% year-over-year; operating margin improved to 22.2%.

• Deferred revenue increased 25% year-over-year to $2,355.4 million.

Outlook and guidance

• Q3 2026 revenue expected at $834–$836 million (23% year-over-year growth); gross margin ~80%.

• Full-year 2026 ARR guidance raised to $3.730–$3.745 billion (24% year-over-year growth).

• Operating profit for FY26 guided to $742–$748 million, up 28–29% year-over-year.

• Free cash flow margin for FY26 expected at 26.5–27%.

• Full-year FY26 non-GAAP net income per share guidance raised to $3.99–$4.02 (22–23% growth).