Zscaler (ZS) Reports Record FQ2 2026 Revenue Driven by Massive Enterprise Adoption
Zscaler Inc. (NASDAQ:ZS) is one of the stocks with explosive growth potential. On February 26, Zscaler reported FQ2 2026 financial results, with revenue reaching $816 million, a 26% year-over-year increase that exceeded market expectations. The company’s ARR grew 25% to $3.4 billion, driven by momentum in large-scale enterprise deals. Notably, the number of customers contributing over $1 million in ARR rose 18% year-over-year, while the Americas region remained the primary growth engine, accounting for 57% of total revenue.
The company is heavily positioning itself as a leader in the AI security space, having processed nearly 1 trillion AI transactions in 2025. CEO Jay Chaudhry highlighted the launch of ‘AI Protect,’ which is a solution designed to manage shadow AI and prevent data leaks or prompt-injection attacks. Zscaler is also shifting its business model toward metered, non-seat-based usage, which now accounts for over a quarter of new annual contract value.
This shift is supported by the Z-Flex program, which allows large enterprises to swap or activate security modules without new procurement cycles, generating over $290 million in contract value this quarter alone. Strategic acquisitions continue to expand Zscaler Inc.’s (NASDAQ:ZS) platform, including the recent purchase of SquareX to secure unmanaged devices via browser extensions and the integration of Red Canary to support agentic security operations.
Zscaler Inc. (NASDAQ:ZS) operates as a cloud security company worldwide. The company offers cyberthreat protection products, including Zscaler Internet Access, Zscaler Private Access solution, Zero Trust Firewall, Cloud Sandbox, and Zero Trust Browser.
While we acknowledge the potential of ZS as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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VIPCross-Asset Positioning Amid AI Earnings Scrutiny and the US Election
1. Markets diverged during the week. Between the October 23 and October 30 closes, BTC fell 4.78%, the Nasdaq 100 declined 1.98%, and gold and silver dropped 2.72% and 8.59%, respectively. The DAX, KOSPI, Nikkei 225 and Hang Seng advanced. We focus on differences in growth prospects, valuation sensitivity and risk exposures rather than applying a single directional view across assets. 2. Market reactions to Alphabet's and Intel's earnings brought returns on AI investment into focus. Attention is shifting from the scale of capital expenditure to revenue realization, margins and free cash flow. Lower interest rates can ease discount-rate pressure, but a sustained valuation recovery still requires support from both operating performance and financing conditions. 3. The November 3 US midterm elections and November 6 employment report are key events in the coming week. We monitor how post-election fiscal and legislative agendas may affect interest rates, the dollar and industry operating conditions. Our execution priorities are to manage leverage and concentration, retain margin and exit-liquidity buffers, and avoid treating a single political outcome as an automatic trading signal. 4. Following Binance's disclosure of a security incident, industry attention to endpoint protection, access segregation and coordinated incident response has increased. Key assets to monitor: BTC, the Nasdaq 100, crude oil and gold, alongside upcoming earnings from AAPL, AMD, PLTR, ARM, ANET and QCOM.
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