Overview
- Zscaler reported stronger-than-expected fiscal Q3 results with $850.5 million in revenue and $1.08 in adjusted EPS, topping Street forecasts on Tuesday.
- The company lowered full-year free-cash-flow margin guidance to 22.8–23.3%, citing higher capital expenditures to secure memory, storage, and processor pricing.
- Zscaler gave a preliminary fiscal 2027 ARR and revenue growth outlook of 16–17%, well below the more than 20% growth many investors had priced into the stock.
- Management disclosed the departures of two senior sales leaders, a factor it said influenced the cautious FY27 assumptions about new-customer growth and execution.
- Investors reacted sharply with a multi-session sell-off that wiped out more than 20% of the stock in premarket and intraday trading, triggered analyst downgrades and price‑target cuts, and prompted a securities‑fraud outreach to shareholders.