Zscaler tanks 31% for worst day ever on prudent guidance, sales shakeup
Summary
Zscaler's stock plunged about 31% after the company issued cautious FY2027 guidance that disappointed investors despite beating fiscal Q3 estimates. The company guided ARR growth of 16–17% for FY2027, expects revenue slightly below Street forecasts, and projected FY2026 ARR of $3.74–3.75 billion (~24% growth). Zscaler reported adjusted EPS of $1.08 on $850 million in revenue, but said it lost two sales leaders, expects capex to rise by roughly 200 basis points of revenue, and the finance chief described a 'prudent approach' to guidance amid transitions. Analysts downgraded the stock and investor sentiment toward software has cooled amid AI uncertainty, even as Zscaler works with Anthropic on Project Glasswing to test model capabilities and vulnerabilities.
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