Zscaler reports strong quarterly earnings and expands AI security focus

Zscaler, Inc. reported fiscal fourth-quarter results that exceeded Wall Street expectations, featuring a 25% year-over-year revenue increase to $898 million. The company also issued optimistic guidance for the upcoming quarter and fiscal year 2027, with full-year revenue projected between $3.91 billion and $3.94 billion.

Despite strong core performance in its Zero Trust business, Zscaler shares have declined more than 20% year-to-date. This market skepticism appears centered on the company’s ability to establish AI security as a significant secondary growth engine. Zscaler reported that AI-security bookings reached $100 million over the past year, showing more than 50% sequential growth in the most recent quarter.

Company executives highlighted that their proxy-based architecture is being adapted to secure AI agents. Adam Geller, Head of Product, noted that securing AI interactions requires different inspection methods than traditional web security, as platforms must understand broader context windows and multi-turn conversations to prevent risks like model poisoning or data leakage.