Zscaler Reports Revenue and ARR Growth Amid Workforce Reduction Plan
Zscaler Inc. (NASDAQ: ZS) reported strong financial results for its fiscal fourth quarter, with GAAP revenue reaching $898.2 million—a 25% increase—and annual recurring revenue (ARR) rising to $3.771 billion, up 25%. Excluding the Red Canary acquisition, ARR grew by 20%, and net new ARR increased by 17%. The company also announced a restructuring plan that includes reducing its global workforce by approximately 3% at an estimated cost of $30 million to $33 million for severance and benefits. Zscaler's non-GAAP operating margin improved to 24%, up from 22% the previous year, while free cash flow rose to $779.1 million in fiscal 2026 compared to $726.7 million a year earlier. The company provided guidance for fiscal 2027 with revenue growth projected between 16.6% and 17.5%, ARR expected to grow by similar percentages, and free-cash-flow margin anticipated at around 23%. However, the restructuring may pose challenges in maintaining sales execution during a period of product expansion.
Tickers: $ZS
Topics: ARR growth profitability revenue workforce reduction