Zscaler Q3 Earnings Surpass Estimates, Revenues Increase Y/Y

Zscaler, Inc.ZS posted third-quarter fiscal 2026 non-GAAP earnings of $1.08 per share, up 28.6% year over year. The figure beat the Zacks Consensus Estimate of $1.00 by 8%.Zscaler’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 8.4%.Revenues rose 25% year over year to $850.4 million, topping the Zacks Consensus Estimate of $834 million by 1.88% and exceeding management’s guidance of $834-$836 million. The quarter reflected continued demand for the company’s Zero Trust platform, supported by expanding customer commitments.Zscaler’s Q3 in DetailZscaler’s third-quarter momentum was broad-based geographically. The Americas represented 56% of revenues in the quarter, up approximately 31% year over year, and delivered the strongest growth rate among regions. EMEA accounted for 28% of revenues, up approximately 16%, while Asia Pacific and Japan contributed 16%, rising about 23%                          Zscaler, Inc. Price, Consensus and EPS Surprise Zscaler, Inc. price-consensus-eps-surprise-chart | Zscaler, Inc. QuoteThe company also noted that roughly 46% of its remaining performance obligation was classified as current, underscoring near-term visibility tied to committed, non-cancelable future revenues.Remaining Performance Obligations (“RPO”), representing Zscaler’s committed non-cancelable future revenues, were $6.5 billion as of April 30, which increased 30% year over year. Current RPO accounted for 46% of the total.Enterprise traction continued to reflect in the customer mix. Zscaler ended the quarter with 748 customers generating more than $1 million of ARR, an 18% year-over-year increase. Customers generating more than $100,000 of ARR reached 4,003, up 19% from the prior-year period. Total ARR increased 25% year over year to $3.5 billion. The company mentioned that newer offerings delivered just over 30% of new ACV in the quarter, and the ARR tied to those offerings more than doubled from the year-ago period, supporting broader platform adoption. Management highlighted record $1 million-plus new ACV deals in the quarter, pointing to continued success in securing larger, multi-year engagements and expanding relationships across its Zero Trust Exchange offerings.Profitability improved as operating discipline offset investment needs. Non-GAAP gross margin was 80.7% compared with 80.3% a year ago, reflecting the company’s high-margin subscription model.Non-GAAP operating income increased 34% year over year to $195.8 million. The non-GAAP operating margin expanded 140 basis points to 23%, with management citing leverage in sales and marketing as a key contributor.Zscaler’s Balance Sheet & Cash FlowAs of April 30, 2026, Zscaler had $3.5 billion in cash, cash equivalents and short-term investments compared with $3.5 billion as of Jan. 31, 2026, and $1.7 billion of debt. Management also pointed to higher capital expenditures as a factor in its updated cash flow outlook.The company generated operating and free cash flows of $198 million and $136 million, respectively, during the fiscal third quarter.Zscaler Raises Guidance for FY26For the fourth quarter of fiscal 2026, Zscaler expects revenues of $875-$878 million. The Zacks Consensus Estimate for fourth-quarter fiscal 2026 revenues is pegged at 877.6 million, implying growth of 22% year over year.Non-GAAP earnings per share are projected between $1.08 and $1.09. The Zacks Consensus Estimate is pegged at $1.03.The estimate has remained unchanged over the past 60 days.For fiscal 2026, management forecasts its revenue outlook in the range of  $3.3295 billion to $3.3325 billion, reflecting year-over-year growth of 24.6% to 24.7%. The Zacks Consensus Estimate for fiscal 2026 revenues is pegged at $3.32 billion, suggesting growth of 24% from fiscal 2025.Non-GAAP earnings per share for fiscal 2026 are now expected in the band of $4.10-$4.11. The consensus mark for fiscal 2026 earnings is pegged at $4.03, which has remained unchanged over the past 60 days.Zscaler’s Zacks Rank and Stocks to ConsiderCurrently, ZS carries a Zacks Rank #3 (Hold).Analog Devices ADI, Amphenol APH and Monolithic Power Systems MPWR are some better-ranked stocks that investors can consider in the Zacks Computer and Technology sector. Analog Devices, Amphenol and Monolithic Power Systems each carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The Zacks Consensus Estimate for Analog Devices’ fiscal 2026 earnings has moved upward by 8.4% over the past seven days to $12.06 per share, calling for an increase of 54.8% year over year. Analog Devices' shares have climbed 54.8% in the year-to-date period.The Zacks Consensus Estimate for Amphenol’s 2026 earnings is pegged at $4.76 per share, revised upward by 47 cents over the past 30 days and suggests a year-over-year jump of 42.5%. Amphenol shares have increased 3.3% in the year-to-date period.The Zacks Consensus Estimate for Monolithic Power Systems’ fiscal 2026 earnings has been revised upward to $24.05 per share from $21.64 over the past 30 days. Monolithic Power Systems shares have increased 83.5% in the year-to-date period.Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.See Stocks Now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks