Zscaler (NASDAQ:ZS) used its 2026 Investor Day to position its Zero Trust Exchange platform as a cybersecurity architecture designed for the growing use of artificial intelligence, while outlining a path to more than $8 billion in annual recurring revenue by fiscal 2031 and a potential upside case of $10 billion.
Founder, Chairman and CEO Jay Chaudhry said AI represents the company’s largest business tailwind to date, as enterprises face a growing number of exposed applications, AI agents and data-security risks. He argued that Zscaler’s approach—connecting authorized entities to specific resources through its platform rather than placing users and devices on a trusted network—can reduce attack surfaces and limit lateral movement after an intrusion.
AI security and platform expansion
Management highlighted four product categories: Zero Trust SASE Everywhere, data security, Security for AI and Agentic SecOps. The company said its Zero Trust SASE offerings extend beyond users to branches, cloud workloads, operational technology, internet-of-things devices and AI agents.
Chief Product Officer Adam Geller said the company has expanded its product-development focus over the past 12 to 18 months toward new “beachheads” for customer acquisition in users, branch and cloud deployments. He cited browser security, Zero Trust Branch and Zero Trust Gateway for cloud workloads as opportunities to win customers that may not initially deploy Zscaler’s traditional internet-access or private-access offerings.
Geller said 40% of Zero Trust Branch customers are new Zscaler customers. He also said approximately 30% of Zscaler Internet Access user licenses do not include Zscaler Private Access, which management views as an opportunity for expansion.
In security operations, Geller said Zscaler recently introduced an Agentic SecOps offering that combines exposure management and threat management. The offering uses more than 50 agents trained on Zscaler telemetry and informed by the company’s ThreatLabz and Red Canary security teams, he said.
Executive Vice President of AI Security and Strategic Initiatives Dhawal Sharma said the company’s data-security business exceeds $400 million and has grown at a 31% compound annual growth rate. He said 70% of Security for AI deals in the fiscal fourth quarter included data security, reflecting the relationship between AI adoption and data-governance needs.
Sharma described the company’s AI security portfolio as including AI asset discovery, data and identity relationship mapping, AI gateway controls, endpoint AI security, AI red teaming and runtime guardrails. He said the company is seeking to secure both AI interactions and the lifecycle of first-party AI applications.
Customers cite transformation and AI governance needs
During a customer panel, AkzoNobel CIO Kurt De Ruwe said the paints and coatings company has used Zscaler to support open internet connectivity across 995 locations and is deploying Zero Trust Branch technology in manufacturing environments. De Ruwe said AkzoNobel had deployed the technology at 69 of 110 factory sites, seeking to reduce its reliance on firewalls and SD-WAN while segmenting legacy operational technology.
Jon Eastern, global head of networks and security at Marsh McLennan, said the insurance broker initially adopted Zscaler to modernize centralized internet access and then accelerated deployment of Zscaler Private Access during the COVID-19 pandemic. He said Zero Trust access has become a foundation of the company’s security model.
Merck Deputy CISO Bob Stasio said the pharmaceutical company is pursuing AI adoption across research, manufacturing and support functions, including through a previously announced $1 billion investment in Google Gemini. Stasio said Merck is focused on AI governance processes that assess risk, apply controls, monitor those controls and support compliance and auditing.
Go-to-market focus and financial framework
New Chief Revenue Officer Ross Tackett said Zscaler serves customers in more than 185 countries, with more than 45% of ARR coming from international markets. The company said it has more than 50% of Fortune 500 companies and more than 40% of Global 2000 organizations as customers.
Tackett said Zscaler is increasing the number of sales territories dedicated to winning new customers in fiscal 2027 while also using global systems integrators, value-added resellers, distributors and managed-service partners to expand coverage. He said the company estimates it serves 4,600 of more than 20,000 enterprises globally with more than 1,500 employees.
CFO Kevin Rubin said fiscal 2026 revenue and ARR each grew 25% year over year. Excluding Red Canary, revenue and ARR each grew 20%, while net new ARR grew 14%, he said. Non-GAAP operating margin reached approximately 23%, free-cash-flow margin was 23%, and the company recorded a Rule of 49 performance, according to Rubin.
- Zero Trust SASE Everywhere represented approximately $3 billion of ARR.
- Zero Trust Branch and Cloud reached $250 million of ARR and grew at a 75% ARR CAGR over the past three years, management said.
- Data security ARR accelerated to 34% growth in fiscal 2026, while bookings rose more than 40% year over year.
- Security for AI ended fiscal 2026 with approximately $70 million in ARR.
Rubin said Zscaler’s three primary growth engines—Zero Trust Branch and Cloud, data security, and Security for AI—collectively delivered 60% ARR growth in fiscal 2026. The company reaffirmed its fiscal 2027 guidance, though it did not provide the specific figures during the Investor Day presentation.
For fiscal 2031, Zscaler said its base-case framework assumes ARR exceeding $8 billion. Management said more rapid adoption of agentic AI could add nearly $2 billion in ARR upside, creating a potential path to $10 billion in ARR. The company also expects continued operating-margin expansion, with capital expenditures remaining elevated through fiscal 2028 before moving toward high-single-digit percentages of revenue as memory and component costs normalize.
About Zscaler (NASDAQ:ZS)
Zscaler, Inc is a cloud-based cybersecurity company that provides security services designed to help organizations connect users, applications, devices and workloads securely. Its platform is built around a zero-trust security model, which verifies access based on identity, context and policy rather than relying primarily on traditional network perimeters.
The company’s offerings include Zscaler Internet Access, which helps secure internet and software-as-a-service access, and Zscaler Private Access, which provides controlled access to private applications without extending an organization’s network to remote users.
