Live: Zscaler Q1 Earnings Coverage

Zscaler (NASDAQ: ZS) reported Q1 FY2026 results beating expectations but triggering sharp after-hours profit-taking. Revenue hit $788.1 million versus estimates of $773.9 million, up 25.5% year-over-year, while non-GAAP EPS of $0.96 topped the $0.86 consensus by 11.6%.

Annual Recurring Revenue (ARR) reached $3.204 billion, growing 26% year-over-year. CEO Jay Chaudhry highlighted “Rule-of-78 performance” — combining ARR growth with free cash flow margin — positioning Zscaler among elite SaaS operators. Operating cash flow surged 35.3% to $448.3 million, outpacing revenue growth.

The company processes over 500 billion daily transactions, a scale advantage critical for AI-driven security. Full-year guidance of $3.28-3.30 billion in revenue implies deceleration to 21-22% growth, potentially explaining the stock’s 9% after-hours decline despite the beat.

Q2 FY26 Guidance

Full-Year FY26 Guidance

“Our outstanding Q1 results demonstrate the strong demand we are experiencing for our Zero Trust and AI Security platform… With over $3.2B in ARR… customers rely on our platform for better security, lower operational costs and reduced IT complexity.”

CEO Jay Chaudhry:

Chaudhry leans heavily into Zero Trust + AI Security as the strategic narrative, emphasizing the SPLX and Red Canary integrations. The tone is confident, but investors wanted more explicit proof of AI-driven monetization and margin expansion — which likely contributed to the post-market selloff.

After ending the day up 3.35%, Zscaler is down 6% after earnings.

ZS delivered a clean top- and bottom-line beat, but the stock is selling off because full-year guidance didn’t rise, operating margin didn’t expand, and investors were expecting a bigger acceleration from AI-security products. The strong revenue and ARR prints were not enough to satisfy a market priced for perfection with a 70x forward multiple.

Zscaler (NASDAQ: ZS) reports Q1 FY2026 earnings today after market close. Shares test $280 support after a 16.6% decline from the November 3rd high of $336.27, breaking below the 50-day moving average of $305.77.

Volume elevated at 2.16 million shares. Resistance sits at $295-300, support at $275-280. The 90-day chart shows September lows near $267, October’s 26% rally to $336, then November’s reversal.

Wall Street expects $0.86 EPS against management’s $772-774 million revenue guidance. Analysts hold 36 buy ratings versus one sell, targeting $331.24 (18% upside). The company’s eight-quarter beat streak averages 24% above estimates. Last year’s Q1 delivered a 68% beat.

The 74.6x forward P/E reflects confidence in 20%+ growth, making today’s guidance critical for validating valuation.

Zscaler (NASDAQ: ZS) reports Q1 fiscal 2026 earnings after the bell today, with consensus targeting $0.86 EPS. The cloud security provider has beaten estimates in eight consecutive quarters, averaging a 24.5% upside surprise.

The stock has pulled back 15.4% from its November 11 high of $331.29, closing Monday at $280.35. This volatility reflects investor caution despite consistent execution and its $44.69 billion market cap.

Wall Street will focus on ARR growth after Zscaler crossed $3 billion last quarter with 22% year-over-year expansion. Management’s AI security narrative matters, particularly AI Guard adoption, after reporting 3,500% growth in AI/ML transaction volume.

Operating margin recovery remains critical. Q4’s 22.1% margin set a quarterly record, but the company still shows negative trailing profitability. Competitive pressure from Palo Alto Networks’ SASE momentum adds urgency to tonight’s guidance.

Analysts maintain a $331.24 average price target, with 36 buy-equivalent ratings versus 12 neutral or negative.

1. Zscaler ended FY25 above $3 billion ARR, up 22 percent, with Q4 revenue up 21 percent, 22 percent operating margin and gross margin temporarily below 80 percent from a one time government cloud deployment, while guiding FY26 ARR growth to 22 percent and FCF margin of 26-26.5 percent on a macro backdrop.
2. AI security and agentic operations are scaling, with SecOps ARR up over 85 percent and management targeting around $400 million of agentic operations ARR in FY26 as it fuses Red Canary with its Data Fabric into an AI powered SOC. Red Canary is guided to contribute about $95 million ARR in FY26, with low double digit growth assumed given higher MDR churn than the core.
3. Zero Trust Everywhere and Data Security Everywhere now exceed $1 billion of ARR combined, with Data Security around $425 million and over 350 customers using Zero Trust for users, branches and cloud. The new Z Flex model passed $100 million in Q4 TCV, up more than 50 percent sequentially, and is becoming the preferred structure for multi product deals in FY26.

Four other major technology companies report quarterly results after the bell today, offering investors a cross-section of the sector from high-growth cloud security to mature PC hardware. The lineup includes companies with wildly different valuations and growth trajectories, each facing distinct tests as they close out their fiscal quarters.

Workday Faces Valuation Reckoning

Workday (NASDAQ: WDAY) reports fiscal Q3 2026 results with the market’s highest expectations among today’s reporters. The enterprise software company trades at 105.91 times trailing earnings, an extreme valuation that reflects both current profitability and anticipated growth acceleration.

The Pleasanton, California-based provider of cloud-based finance and human resources applications has matched Zscaler’s consistency, beating estimates in eight straight quarters with an average surprise of 7.7%. Most recently, the company posted $2.21 per share against $2.12 estimates in August, continuing a pattern of reliable but modest beats.

What makes Workday’s valuation digestible is the expected earnings compression: analysts forecast a forward price-to-earnings ratio of just 21.05, representing an 80% decline from current levels. This projection stems from quarterly earnings growth of 71.4% year-over-year, suggesting the company is in the middle of significant profit expansion. Revenue reached $8.96 billion over the trailing twelve months, up 12.6% year-over-year, with operating margins improving to 10.6%.

The company’s institutional ownership of 96.7% indicates professional investors have embraced the growth story despite the elevated multiple. With 75% of 40 covering analysts rating the stock Buy or Strong Buy, consensus targets $281.44.

HP Inc. Offers Value Alternative

HP Inc. (NASDAQ: HPQ) represents the opposite end of the valuation spectrum, trading at just 8.87 times trailing earnings with a 4.77% dividend yield. The Palo Alto-based PC and printer manufacturer generates $54.71 billion in annual revenue, the largest among today’s reporters, but grows at a modest 3.1% year-over-year pace.

HP’s fiscal Q4 2025 results will test whether the company can maintain recent earnings momentum. Despite sluggish revenue growth, quarterly earnings jumped 23.1% year-over-year, demonstrating margin improvement in a mature business. The company trades at just 0.419 times sales, a remarkably low multiple that reflects either deep value or structural concerns about the PC hardware market.

Analyst sentiment skews cautious, with 82% of 17 covering analysts rating the stock Hold. The forward price-to-earnings ratio of 7.12 suggests limited growth expectations, though the $1.14 annual dividend provides income while investors wait. The company’s profit margin of 4.82% leaves room for operational improvement but also highlights the low-margin nature of hardware manufacturing.

Autodesk and NetApp Round Out Reports

Autodesk (NASDAQ: ADSK) brings design software exposure to today’s slate. The company’s fiscal Q3 2026 results will showcase its transition to subscription-based revenue, which has driven revenue growth of 17.1% year-over-year to $6.61 billion. Trading at 60.26 times trailing earnings with a gross margin of 92.3%, Autodesk combines software economics with exposure to architecture, engineering, and construction markets.

The San Rafael, California-based company posted $1.76 billion in revenue last quarter with operating margins of 25.2%, demonstrating the profitability of its subscription model. With 77% of covering analysts rating the stock Buy or Strong Buy, consensus points to a target price of $358.86 against a market capitalization of $62.01 billion.

NetApp (NASDAQ: NTAP) closes the lineup with data storage solutions. The Sunnyvale, California-based company reports fiscal Q2 2026 results after generating $1.56 billion in revenue last quarter with a 19.8% operating margin. Trading at 19.29 times trailing earnings with a 1.94% dividend yield, NetApp occupies middle ground between HP’s value profile and the growth stocks’ premium valuations.

Revenue growth of 1.2% year-over-year reflects challenges in traditional storage markets, though the company’s $5.65 in trailing earnings per share demonstrates sustained profitability. Analyst sentiment leans neutral, with two-thirds of covering analysts rating the stock Hold. The forward price-to-earnings ratio of 13.85 suggests modest growth expectations.