Zscaler(NASDAQ) ZS

Zscaler helps employees safely use business apps and websites from anywhere. It protects company data by checking the identity of every user. The service replaces old-fashioned security tools that are slow and expensive.

Digital Tools for Modern Work

• Internet Access: Security for employees using external websites and web-based applications; accounts for 98% of revenue when combined with support.
• Private Access: Connection tools that let workers use internal company apps without a traditional Virtual Private Network, or VPN.
• Digital Experience: Software that monitors and scores the performance of business applications for users across different locations.
• Workload Protection: Security features that find mistakes in cloud accounts and stop threats from moving between different applications.

Expanding the Defense Line

• Acquired Red Canary in August 2025 to add automated security monitoring and threat response tools to its platform.
• Purchased SPLXAI Inc. in October 2025 to increase its ability to secure applications powered by Artificial Intelligence, or AI.
• Bought SquareX, Inc. in February 2026 to help protect users while they browse the internet on unmanaged devices.
• Entered a definitive agreement to acquire Symmetry Systems, Inc. in May 2026 to improve how it maps data and identities.

Building a Smarter Cloud

Zscaler uses a Zero Trust approach, which is a security model that assumes no user or device is trusted by default. Its global cloud platform performs security checks close to the user to avoid the delays caused by sending traffic to a central office.

Measuring Recent Success

• Revenue rose to $850.5 million in the third quarter of 2026, up 25.4% from $678 million in the previous year.
• Free cash flow—the money left after paying for operations and equipment—hit $198 million in Q3 2026, up 65.8% year-over-year.
• Gross profit reached $657.8 million in the third quarter of 2026, up 26% compared to the prior year.
• Net loss deepened to $13.9 million in Q3 2026, worsening by 236.6% from a loss of $4.1 million the year before.
• Sales through channel partners, such as resellers and distributors, accounted for 85% of total revenue in the third quarter of 2026.

Bottom Line

Zscaler has transitioned from a basic web filter to a global platform for securing cloud-based work. Its recent acquisitions focus on using artificial intelligence to protect corporate data as traditional office networks disappear.