F3Q26 Beat and Raise Overshadowed by Cautious FY27 Setup, Lowering PT to $225

研报英文原文证据摘录

F3Q26 Beat and Raise Overshadowed by Cautious FY27 Setup, Lowering PT to $225

May 26, 2026

3) Z-Flex. Z-Flex generated >$480M of TCV in Q3, up >60% q/q, and has

now surpassed >$1B of LTM bookings at an average 4-year term. Z-Flex

reduces buying friction by letting customers deploy and swap modules

without restarting procurement cycles, which management has tied to

shorter sales cycles and stronger upsell. This dynamic appears to be flowing

through to broader enterprise momentum, with the company posting a

record number of $1M+ ARR deals for a 3Q and a 6th consecutive quarter

of sales productivity growth.

What we are watching:

1) Red Canary. Red Canary exited 3Q at $127M in ARR, with FY26 guidance

raised to ~$137M (from $130M at 2Q and $95M at the start of the

year), implying $10M of NNARR in 4Q. Despite elevated post-acquisition

churn, the business has tracked ahead of initial expectations as renewal

rates have come in better than the conservative assumptions set at close.

However, management expects Red Canary NNARR to grow below the

overall business in FY27, reflecting uncertainty around the pace of adoption

for the integrated SecOps solution within the existing Zscaler customer

base. The company will also stop disclosing Red Canary separately, as the

acquisition will be fully lapped. The core thesis behind the deal remains

combining Red Canary’s agentic AI framework with Zscaler’s Data Fabric

to build an AI powered SOC that automates threat hunting, triage, and

response.

2) New Logo Lands. Large customer growth remained healthy, with >

$1M ARR customers up 18% y/y and >$100K customers up 19%, but

management acknowledged new logo underperformance and embedded

tempered assumptions in the preliminary FY27 framework. Further, two