Zscaler reports the fourth quarter of fiscal 2026 — the three months ended 31 July 2026, which closes its year — after the US close on Thursday 3 September 2026, with the call at 4:30 p.m. Eastern. Consensus is $1.09 of non-GAAP earnings per share on about $877.1 million of revenue, press-reported from third-party estimate feeds. Both sit at the top of Zscaler's own guide of $875–878 million and $1.08–1.09.
So the quarter itself is close to pre-announced. Two things in the release are not: what free cash flow does, and what management says about fiscal 2027.
The points
- The full-year cash guide implies the weakest quarter in the series. Nine months in, free cash flow is $718.4 million on $2,454.3 million of revenue — 29.3%. The full-year guide is a 22.8–23.3% margin on about $3,331 million of revenue, which leaves $41 million to $58 million for the July quarter: a margin of 4.7% to 6.6%. The arithmetic is ours; both inputs are Zscaler's.
- That would be the first sub-40 Rule of 40 score in fifteen stored quarters. Consensus revenue growth of 21.9% plus a cash margin in that band scores 26.6 to 28.5. The lowest score in the fourteen quarters on record is 40.2.
- The cause is named and it is capex. Management cut the free cash flow margin guide from 26.5–27% to 22.8–23.3% in May and attributed it to capital expenditure running in the high single digits as a percentage of revenue. In the April quarter the two lines Zscaler deducts to reach free cash flow came to $62.1 million on $850.5 million of revenue — 7.3%, against 4.3% in January.
- The fiscal 2027 outlook already on the record is 16–17%. Management gave an early ARR and revenue growth outlook of roughly 16% to 17% for fiscal 2027 on the May call, against the 24–25% being printed now. Whether that number is repeated, raised or firmed up is the largest single thing on Thursday.
- The ARR guide implies $215–224 million of net new ARR. $3.740–3.749 billion at 31 July, from $3,525 million at 30 April. Against roughly $195 million in the July 2025 quarter, that is a 10% to 15% improvement. Ours, on the company's endpoints.
- The growth still has an acquisition inside it. Red Canary closed on 1 August 2025, the first day of fiscal 2026, and contributed $127 million of ARR. Headline ARR growth of 25% in April was 21% without it. From the October quarter it is in the base, and the organic rate is the one that has to hold.
- There is no P/E, and that is correct. Zscaler lost money on a GAAP basis in thirteen of the fourteen quarters stored here; trailing GAAP diluted EPS is −$0.48. The $1.09 consensus above is non-GAAP, and the wedge is not small: April printed $1.08 non-GAAP against −$0.09 GAAP, a bridge of about $192 million, almost all of it stock compensation and the payroll tax on it.
The cash guide is doing a lot of work
| Revenue | Free cash flow | Margin | |
|---|---|---|---|
| FY2026, nine months | $2,454.3M | $718.4M | 29.3% |
| FY2026, full-year guide | ~$3,331M | $759M–$776M | 22.8–23.3% |
| Q4 FY2026, implied | ~$876.5M | $41M–$58M | 4.7–6.6% |
| Q4 FY2025, reported | $719.2M | $171.9M | 23.9% |
Reported figures and the full-year guide are Zscaler's own. The implied July quarter is subtraction on them, and is ours.
A quarter converting five cents on the dollar into cash, after four converting twenty-four, is a large claim for a guide to make. There are two readings and they point in opposite directions.
The first is that it is conservatism. A company that has run a 28.1% trailing free cash flow margin does not usually fall to 5% in one quarter without something breaking, and nothing in the April release suggests anything is. On that reading Thursday prints a cash number well above the implied range and the full-year margin lands nearer 25%.
The second is that the capex is real and front-loaded, which is what management said. Zscaler has been explicit that the spend is AI infrastructure — AI Guardrails, AI Broker, Endpoint AI Security, the AI Access Graph — alongside an announced intent to acquire Symmetry Systems for access-graph technology. Capex went from 4.3% of revenue in January to 7.3% in April. If it stays there, the cash margin does not come back this year.
Either way, the score falls, and the reason matters more than the number. This site's card will show something in the high twenties for the July quarter. That is a guide being met, not a business deteriorating — but it is also the first time in the tracked history that Zscaler has not cleared the line, and the trailing score (52.7 in April) is where to look instead.
Fifteen quarters over the line
| Quarter | Revenue | YoY | FCF margin | R40 |
|---|---|---|---|---|
| 2025 Q3 (Apr 2025) | $678.0M | +22.6% | 17.6% | 40.2 |
| 2025 Q4 (Jul 2025) | $719.2M | +21.3% | 23.9% | 45.2 |
| 2026 Q1 (Oct 2025) | $788.1M | +25.5% | 52.4% | 77.9 |
| 2026 Q2 (Jan 2026) | $815.8M | +25.9% | 20.7% | 46.6 |
| 2026 Q3 (Apr 2026) | $850.5M | +25.4% | 16.0% | 41.4 |
| 2026 Q4, consensus | $877.1M | +21.9% | 4.7–6.6% implied | 26.6–28.5 |
Reported figures are Zscaler's; margins and scores are ours, as set out when Zscaler joined coverage. The October quarter collects the renewals, which is why it scores in the seventies; the rest of the year lives in the forties. The last row is the guide, not a forecast.
The number that actually moves the stock
Everything above is about a quarter that has been described in advance. The fiscal 2027 outlook has not been, beyond one figure: management's early call of roughly 16% to 17% ARR and revenue growth, given in May.
That is a seven-to-nine point step down from what is being printed, and it arrives in the same year the Red Canary contribution stops being a contribution and becomes the base. Strip the acquisition out of the April quarter and organic ARR grew 21%. A fiscal 2027 guide at 16–17% is therefore not a collapse — it is roughly four points of organic deceleration plus the acquisition anniversary. A guide at 18% or better would say the deceleration is slower than management indicated in May. A guide confirming 16–17% says the number the market has been working with since May was the plan all along.
The other thing to listen for is the go-to-market organisation. Two senior departures have been the sell side's stated worry into this print, and a fourth-quarter number cannot answer it; the commentary can.
What the price is paying for
Our Zscaler model, published 31 August, against the $188.38 close of that day:
| Case | Fair value | vs $188.38 |
|---|---|---|
| Bear | $144.61 | −23% |
| Base | $232.34 | +23% |
| Bull | $314.51 | +67% |
| Chaudhry | $384.04 | +104% |
Ours, not company forecasts. The model is unusually sensitive here: terminal value is 84.7% of enterprise value in the base case, so the exit multiple is by a wide margin the largest single input, and a quarter's cash flow moves it very little. What Thursday can move is which case is live — and the fiscal 2027 growth number is the input every one of them keys off.
What to watch
- Free cash flow against the implied $41–58 million, and the full-year margin against the guided 22.8–23.3%. If the quarter comes in far above the implied range, the May guide cut was conservatism.
- Capital expenditure as a percentage of revenue against 7.3% in April and 4.3% in January. This is the mechanism behind the cash guide, and the one that says whether the margin comes back.
- The fiscal 2027 guide against the 16–17% ARR and revenue growth outlook given in May. The largest single item on the call.
- ARR against the guided $3.740–3.749 billion, and the organic rate. Net new ARR of $215–224 million is implied; the July 2025 quarter did about $195 million.
- Calculated billings, which Zscaler reports at the fiscal year end — $1,202.3 million and +32% in the July 2025 quarter. It is the fourth quarter's own forward metric and it is not in the guide.
- Non-GAAP EPS against the guided $1.08–1.09 and the full-year $4.10–4.11, and the GAAP loss beside it. The non-GAAP tax rate fell from 23% to 21% during the year and applies prospectively, so the year-over-year per-share comparison spans two rates.
- Remaining performance obligations against $6,459.3 million at 30 April, of which the company expects to recognise 46% within twelve months.
Zscaler reports the quarter ended 31 July 2026 after the US close on Thursday 3 September 2026, with the call at 4:30 p.m. Eastern. Consensus of $1.09 per share on about $877.1 million of revenue is press-reported from third-party estimate feeds as of 2 September 2026 on a non-GAAP basis, and is not a series this site stores or verifies. All guidance and all reported figures here — fourth-quarter and full-year revenue, ARR, non-GAAP income from operations and non-GAAP EPS, the share count and tax rate they assume, the free cash flow margin guide and its revision, the Red Canary ARR contribution, deferred revenue, remaining performance obligations, calculated billings and the per-share figures on both bases — are Zscaler's own, from its third-quarter fiscal 2026 release of 26 May 2026 and the quarterly releases before it, and the fiscal 2027 early outlook of 16-17% growth is management's own, given on the call of the same date. Ours rather than the company's: the implied fourth-quarter free cash flow and margin, the implied net new ARR, the Rule of 40 scores, and the fair values and cases in our Zscaler model of 31 August 2026, which are assumptions and not company forecasts. The price of $188.38 is the 31 August 2026 close; a live quote will differ.
