The slight revenue and EPS miss combined with a meaningful FCF margin guidance cut may pressure the stock near-term, but the raised full-year revenue and EPS guidance and record non-GAAP operating margin provide a positive counterbalance. Monitor the Q4 earnings call for commentary on the FCF margin trajectory and the Symmetry Systems acquisition timeline.
Price Chart
Executive Summary
Zscaler reported Q3 FY2026 results with revenue of $850.5M (+25% YoY), slightly below the $877.6M consensus, and non-GAAP EPS of $1.08, marginally missing the $1.09 estimate. The company raised full-year FY2026 guidance for revenue, non-GAAP operating income, and non-GAAP EPS, but lowered its free cash flow margin outlook to ~22.8-23.3% from prior ~26.5-27%. The beat on guidance was partially offset by the FCF margin cut and a slight EPS miss, resulting in a mixed read-through for the stock.
Key Financial Metrics
Key Facts
- Q3 FY2026 revenue: $850.5M (+25% YoY), vs consensus $877.6M (miss of ~3.1%)
- Non-GAAP EPS: $1.08, vs consensus $1.09 (miss of ~0.9%)
- GAAP net loss per share: $(0.09), vs $(0.03) in prior year quarter
- ARR grew 25% YoY to $3.525B; net new ARR of $166M; organic ARR growth 21% ex-Red Canary
- Non-GAAP operating margin reached an all-time high of 23% (vs 22% a year ago)
- Operating cash flow: $198.0M (23% of revenue), down from $211.1M (31% of revenue) a year ago
- Free cash flow: $136.0M (16% of revenue), up 14% YoY from $119.5M
- Full-year FY2026 revenue guidance raised to ~$3.3295B-$3.3325B (from $3.309B-$3.322B)
- Full-year FY2026 non-GAAP EPS guidance raised to $4.10-$4.11 (from $3.99-$4.02)
- Full-year FY2026 FCF margin guidance lowered to ~22.8-23.3% (from ~26.5-27%)
- Q4 FY2026 revenue guidance: $875M-$878M, growth of ~22%
- Q4 FY2026 non-GAAP EPS guidance: $1.08-$1.09
- Deferred revenue grew 25% YoY to $2.477B
- Announced intent to acquire Symmetry Systems (terms undisclosed)
Financial Impact
Revenue miss of ~$27M vs consensus; EPS miss of $0.01; guidance raised on revenue and EPS but FCF margin cut by ~4pp
Risk Factors
- Free cash flow margin guidance cut from ~26.5-27% to ~22.8-23.3% signals higher capex spend
- Revenue growth decelerating to ~22% in Q4 guidance vs 25% in Q3
- GAAP net loss widening to $13.9M from $4.1M a year ago
- Integration risk from multiple acquisitions (Red Canary, SquareX, Symmetry Systems)
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001713683-26-000095 |
| Document: zs-20260526.htm | 0001713683-26-000095 |
| Document: 0001713683-26-000095-index-headers.html | 0001713683-26-000095 |
| Document: 0001713683-26-000095-index.html | 0001713683-26-000095 |
| Document: 0001713683-26-000095.txt | 0001713683-26-000095 |
| 8-K Data (Synthetic) | 0001713683-26-000095 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Aug 6, 2026 8w ago | Press Release | $162.60 $177.80 | ▲ +9.35% | ▲ +8.75% | $200.21 (+23.13%) |
Jul 28, 2026 9w ago | Press Release | $151.63 $168.42 | ▲ +11.07% | ▲ +7.69% | $200.21 (+32.04%) |
Jun 25, 2026 14w ago | 144 | $132.26 $139.70 | ▲ +5.63% | ▲ +4.36% | $200.21 (+51.38%) |
Jun 18, 2026 15w ago | Insider Cluster | $124.85 $146.43 | ▲ +17.28% | ▲ +16.75% | $200.21 (+60.36%) |
Jun 18, 2026 15w ago | Insider Cluster | $124.85 $146.43 | ▲ +17.28% | ▲ +16.75% | $200.21 (+60.36%) |
Jun 18, 2026 15w ago | Insider Cluster | $124.85 $146.43 | ▲ +17.28% | ▲ +16.75% | $200.21 (+60.36%) |
Jun 17, 2026 15w ago | 144 | $124.85 $146.43 | ▲ +17.28% | ▲ +16.75% | $200.21 (+60.36%) |
Jun 16, 2026 15w ago | 144 | $124.38 $146.43 | ▲ +17.73% | ▲ +16.41% | $200.21 (+60.97%) |
Jun 16, 2026 15w ago | 144 | $124.38 $146.43 | ▲ +17.73% | ▲ +16.41% | $200.21 (+60.97%) |
Jun 16, 2026 15w ago | 144 | $124.38 $146.43 | ▲ +17.73% | ▲ +16.41% | $200.21 (+60.97%) |
US Market Status
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