Zscaler reports 25% ARR growth, but fiscal 2027 guidance slows to mid-teens

Zscaler closed out fiscal 2026 with revenue up 25% year over year, ARR up 25%, and record operating margins. The cloud security company reported Q4 fiscal 2026 revenue of $898.2 million, bringing its full-year haul to approximately $3.35 billion. Ending annual recurring revenue hit $3.771 billion, also growing 25% compared to the prior year. The guidance that spooked investors For fiscal 2027, Zscaler projected revenue between $3.908 billion and $3.938 billion. That translates to growth of 16.6% to 17.5%, a meaningful step down from the 25% clip the company just delivered. ARR guidance told the same story, with projections landing between $4.396 billion and $4.426 billion, representing 16.6% to 17.4% growth. The picture gets more nuanced when you strip out the Red Canary acquisition. On an organic basis, Q4 ARR grew 20%, with net-new ARR accelerating to 17% year over year. Cutting heads to fund AI Alongside the earnings report, Zscaler announced a roughly 3% reduction in its workforce. The company expects to take restructuring charges of $30 million to $33 million related to the cuts. Management framed the layoffs as a strategic reallocation toward AI initiatives, not a cost-cuttin...