ZS · Forward model · Zero Trust Exchange subscriptions · Bear case
What has to happen in Zero Trust Exchange subscriptions
Model as of
This page changes Zero Trust Exchange subscriptions inside the complete ZS model. Every other vertical, corporate programme and valuation assumption stays in the selected portfolio case.
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Zero Trust Exchange subscriptions
Zscaler brokers every user-to-application connection in its own cloud and sells the service as a multi-year subscription recognised ratably, so revenue in any quarter is the run-off of a contracted base rather than the result of a sale. The base is published: annual recurring revenue, which Zscaler defines as the next twelve months of subscription revenue at the measurement date, was $3,525 million at 30 April 2026, extended by $166 million of net new ARR in the quarter. Revenue has been 95.4% to 98.4% of one quarter of that base in each of the four quarters ARR has been disclosed. The model is that mechanism: an ARR base, a quarterly build, and a conversion rate.
Latest: $1.42B (2031Q3E)
| Period | Value |
|---|---|
| 2023Q2 | $388M |
| 2023Q3 | $419M |
| 2023Q4 | $455M |
| 2024Q1 | $497M |
| 2024Q2 | $525M |
| 2024Q3 | $553M |
| 2024Q4 | $593M |
| 2025Q1 | $628M |
| 2025Q2 | $648M |
| 2025Q3 | $678M |
| 2025Q4 | $719M |
| 2026Q1 | $788M |
| 2026Q2 | $816M |
| 2026Q3 | $850M |
| 2026Q4E | $866M |
| 2027Q1E | $899M |
| 2027Q2E | $931M |
| 2027Q3E | $963M |
| 2027Q4E | $994M |
| 2028Q1E | $1.03B |
| 2028Q2E | $1.06B |
| 2028Q3E | $1.09B |
| 2028Q4E | $1.12B |
| 2029Q1E | $1.15B |
| 2029Q2E | $1.18B |
| 2029Q3E | $1.20B |
| 2029Q4E | $1.23B |
| 2030Q1E | $1.26B |
| 2030Q2E | $1.29B |
| 2030Q3E | $1.32B |
| 2030Q4E | $1.34B |
| 2031Q1E | $1.37B |
| 2031Q2E | $1.40B |
| 2031Q3E | $1.42B |
Assumptions & reasoning
- One vertical carrying the one reported revenue line. Zscaler operates as a single reportable segment and prints a single Revenue caption; all fourteen quarters here are disclosed GAAP revenue read from the Form 8-K Exhibit 99.1 of each quarter, and nothing is apportioned or estimated.
- The ARR base trace reads about $3,707M at the first projected quarter against management's guide of $3.740-3.749bn. That 1.0% shortfall is deliberate: the engine applies one net-new-ARR figure to every quarter, and seeding it with the guided July peak of $219.5M would repeat a seasonal bookings spike twenty times and inflate the terminal base by about a tenth. The revenue the model values lands inside the revenue guide instead.
- ARR has only four disclosed quarters. Zscaler began publishing it with the fiscal 2025 fourth quarter and reported calculated billings before that; the two are different measures and were not spliced. This is the thinnest evidence in the model and the reason the conversion rate glides back to a level actually observed rather than to a round number.
- Red Canary, acquired on 1 August 2025 for $651.4 million of cash, contributed $127 million of the $3,525 million base. Excluding it, ARR grew 21% rather than 25% and net new ARR grew 14%. Its revenue contribution is never disclosed, so it cannot be carried as a separate line.
- Regional divergence is disclosed every quarter and deliberately not modelled: United States revenue grew 32% year over year in the basis quarter to $452.6 million, 53% of the total against 51% a year earlier, while EMEA grew 16% to $236.4 million. There is no regional ARR, customer count or guidance, so four geographic verticals would be four bare growth rates in place of one evidenced mechanism.
- No seasonality factors. A centred four-quarter moving-average test over the fourteen-quarter series gives a signal of 2.7 points against a worst within-slot spread of 1.9 points, and the largest factor is an artefact of the Red Canary close rather than a shape. Zscaler's real seasonality is in bookings and shows up in net new ARR - $155.5M, then $166.0M, then a guided $219.5M in the July quarter - not in ratably recognised revenue.