ZSZscalerQ2 FY2026Earnings Analysis

SolidFundamentals score6 / 10

How is this scored?

Base score5
Revenue up more than 20% YoY+2
Reported a net loss-2
Gross margin above 50%+1

Total6 / 10

Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.

Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →

AI Takeaway

ZS reported a significant revenue increase in Q2 FY2026, but faced widening net losses due to rising costs and R&D expenses.

Revenue

$815.75M

+25.91% YoY

EPS (Diluted)

-$0.21

-320.00% YoY

Gross Margin

76.6%

-0.5 pts YoY

Operating Income

-$51.77M

-28.98% YoY

Filed Feb 26, 2026 · Analysis updated Jul 3, 2026 · Source: SEC EDGAR 10-Q filing

Next ZS earnings expected Sep 3, 2026

Revenue Growth, Margins & Profitability

Source: SEC XBRL

Zscaler (ZS) reported Q2 FY2026 revenue of $815.75M, up 25.9% year over year. Operating margin was -6.3%, against -6.2% a year earlier. ZS's fiscal Q2 FY2026 corresponds to calendar Q1 2026.

ZS vs Analyst Expectations

Last 4 quarters: 4 beats

Quarter	Actual EPS (USD)	Consensus (USD)	Result
Jun 2026	1.08	1.04	Beat +4.0%
Mar 2026This filing	1.01	0.92	Beat +9.3%
Dec 2025	0.96	0.89	Beat +8.4%
Sep 2025	0.89	0.82	Beat +8.2%

Adjusted (non-GAAP) EPS of $1.01 versus the $0.92 analyst consensus — a +9.3% beat for Mar 2026. Analyst consensus is quoted on the adjusted (non-GAAP) basis the street uses. GAAP diluted EPS for this quarter was -$0.21.

ZS Q2 FY2026 Management Discussion Highlights

Compiled by AI from this SEC filing

Revenue Growth

ZS achieved a 25.9% increase in revenue year-over-year, driven by strong demand for its cybersecurity solutions.

Source: 10-Q Income Statement

Increased R&D Expenses

Research and development expenses rose by 34.1%, reflecting the company's investment in innovation and product development.

Source: 10-Q Income Statement

Operating Losses

Operating income declined by 29.0% year-over-year, indicating challenges in managing operational costs.

Source: 10-Q Income Statement

ZS Q2 FY2026 Risk Factors

Compiled by AI from this SEC filing · 2 high, 1 medium, 0 low

Rising R&D Costs

medium

The significant increase in R&D expenses could impact profitability if new products do not generate expected returns.

Source: 10-Q Income Statement

Negative Cash Flow from Investing Activities

high

The substantial negative cash flow from investing activities suggests high capital expenditure, which may strain liquidity.

Source: 10-Q Cash Flow Statement

Declining Cash Reserves

high

A 31.6% decrease in cash and equivalents raises concerns about the company's ability to meet short-term obligations.

Source: 10-Q Balance Sheet

ZS Financial Charts & Detailed Metrics

Revenue & Net Income Trend

Margin Trend

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Key Metrics

Income Statement

Metric	Current	Previous	YoY Change
Revenue $M	815.75 $M	647.90 $M	+25.91%
Cost of Revenue $M	191.26 $M	148.50 $M	+28.80%
Gross Profit $M	624.49 $M	499.40 $M	+25.05%
Operating Income $M	-51.77 $M	-40.14 $M	-28.98%
Net Income $M	-34.31 $M	-7.72 $M	-344.23%
EPS (Basic) $	-0.21 $	-0.05 $	-320.00%
EPS (Diluted) $	-0.21 $	-0.05 $	-320.00%
R&D Expense $M	229.14 $M	170.86 $M	+34.11%

Balance Sheet

Metric	Current	Previous	YoY Change
Total Assets $B	6.75 $B	5.01 $B	+34.92%
Current Assets $B	4.45 $B	3.67 $B	+21.43%
Total Liabilities $B	4.56 $B	3.40 $B	+34.11%
Current Liabilities $B	2.34 $B	3.05 $B	-23.22%
Stockholders' Equity $B	2.20 $B	1.61 $B	+36.62%
Cash & Equivalents $B	1.20 $B	1.76 $B	-31.60%

Cash Flow

Metric	Current	Previous	YoY Change
Operating Cash Flow $MYTD	652.35 $M	510.77 $M	+27.72%
Investing Cash Flow $BYTD	-1.86 $B	-0.20 $B	-826.27%
Financing Cash Flow $MYTD	24.50 $M	25.80 $M	-5.04%
D&A $MYTD	67.60 $M	45.91 $M	+47.23%

Key Ratios

Metric	Current	Previous	YoY Change
Gross Margin	76.6%	77.1%	-0.5 pts
Operating Margin	-6.3%	-6.2%	-0.2 pts
Net Margin	-4.2%	—	—
ROE	-1.6%	—	—
ROA	-0.5%	—	—
Current Ratio	1.90	—	—
Debt to Equity	2.08	—	—

ZS Q2 FY2026 Earnings FAQ

Answers draw on this SEC filing and the data on this page

Did ZS beat earnings estimates in Q2 FY2026?

ZS did not beat earnings estimates, as it reported a net loss of $34.31M, significantly wider than the previous year.

What were the key takeaways from ZS Q2 FY2026 earnings?

Key takeaways include a 25.9% increase in revenue, a significant rise in R&D expenses, and a widening net loss of $34.31M.

How did ZS's revenue grow in Q2 FY2026?

ZS's revenue grew by 25.9% year-over-year to $815.75M, driven by strong demand for its cybersecurity solutions.

What risks did ZS highlight in its Q2 FY2026 report?

ZS highlighted risks such as rising R&D costs, negative cash flow from investing activities, and declining cash reserves.

What is ZS's current financial health?

ZS's financial health shows strong revenue growth but is challenged by increased losses and declining cash reserves.

When is the next ZS earnings date?

Zscaler (ZS) is next expected to report earnings on Sep 3, 2026. The date comes from the analyst earnings calendar and can shift until the company confirms it.

More ZS Earnings Reports

ZS Q3 FY2026

In Q3 FY2026, ZS delivered strong revenue growth of $850.5M (+25.4% YoY) and slightly improved gross and operating margins, but remained unprofitable with a wider net loss and sharply lower cash balances due largely to heavy year-to-date investing outflows.

ZSZscalerQ2 FY2026

SolidFundamentals score6 / 10

How is this scored?

Base score5
Revenue up more than 20% YoY+2
Reported a net loss-2
Gross margin above 50%+1

Total6 / 10

Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.

Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →

AI Takeaway

ZS reported a significant revenue increase in Q2 FY2026, but faced widening net losses due to rising costs and R&D expenses.

Quarter

Actual EPS (USD)

Consensus (USD)

Result

Jun 2026

1.08

1.04

Beat +4.0%

Mar 2026This filing

1.01

0.92

Beat +9.3%

Dec 2025

0.96

0.89

Beat +8.4%

Sep 2025

0.89

0.82

Beat +8.2%

Metric

Current

YoY Change

Revenue $M

815.75

+25.91%

Cost of Revenue $M

191.26

+28.80%

Gross Profit $M

624.49

+25.05%

Operating Income $M

-51.77

-28.98%

Net Income $M

-34.31

-344.23%

EPS (Basic) $

-0.21

-320.00%

EPS (Diluted) $

-0.21

-320.00%

R&D Expense $M

229.14

+34.11%

Metric

Current

YoY Change

Total Assets $B

6.75

+34.92%

Current Assets $B

4.45

+21.43%

Total Liabilities $B

4.56

+34.11%

Current Liabilities $B

2.34

-23.22%

Stockholders' Equity $B

2.20

+36.62%

Cash & Equivalents $B

1.20

-31.60%

Metric

Current

YoY Change

Operating Cash Flow $MYTD

652.35

+27.72%

Investing Cash Flow $BYTD

-1.86

-826.27%

Financing Cash Flow $MYTD

24.50

-5.04%

D&A $MYTD

67.60

+47.23%

Metric

Current

YoY Change

Gross Margin

76.6%

-0.5 pts

Operating Margin

-6.3%

-0.2 pts

Net Margin

-4.2%

—

ROE

-1.6%

—

ROA

-0.5%

—

Current Ratio

1.90

—

Debt to Equity

2.08

—