ZS F3Q26 Preview: Beat & Raise Revenue Setup, Little ARR Guide Upside

Research evidence excerpt

ZS F3Q26 Preview: Beat & Raise Revenue Setup, Little ARR Guide Upside

May 19, 2026

John DiFucci john.difucci@guggenheimpartners.com ZS F3Q26 Preview: Beat & Raise Revenue Setup,

212 518 9670 Little ARR Guide Upside

Lawrence Vensko

lawrence.vensko@guggenheimpartners.com

212 518 9548 Key Message: We believe Zscaler will exceed F3Q26 Street revenue expectations, guide

F4Q26 total revenue above the Street and raise annual revenue guidance by at least

the F3Q beat. While the company does not guide ARR quarterly, we expect Zscaler will

deliver modest upside to F3Q Street ARR expectations, but we see less room for the

company to raise annual ARR guidance of 24% growth. In the spirit of transparency,ZS NEUTRAL Zscaler began providing the actual quarterly ARR contribution in reported quarters (F1Q

Zscaler, Inc. and F2Q) as well as expected contributions for F3Q and F4Q. More specifically, Zscaler

Sector: Software expects $16M of inorganic Red Canary New ARR in F2H26, bringing the total Red Canary

FY26 ARR contribution to $130M (vs. prior guidance of $95M and at least $140M at Earnings Preview the time of the acquisition). We appreciate the company’s efforts and disclosures as the

Share Price $175.25 nuances of the inorganic vs. organic contribution to financials weighed on shares, in

Price Target NA addition to the broader volatility software stocks have faced. Our field checks this quarter

were an improvement from the more challenging checks last quarter as two partners

exceeded, three met, and one fell below quarterly plan, while pipelines were mostly

Revenue ($M) positive. Several partners talked about pipeline strength, though that has been the trend

(FY JUL) 1Q 2Q 3Q 4Q FY for several quarters now, and we can’t help but wonder if Zscaler is taking some of those