Zscaler sees downbeat quarterly revenue as competition heats up in cybersecurity market

Zscaler

26/05/2026 21:36

May 26 (Reuters) - Zscaler ZS.O forecast fourth-quarter revenue below estimates on Tuesday, signaling intensifying competition in the cybersecurity market as enterprises scrutinize spending on cloud security products, sending shares down 15% in extended trading.  
Despite the push to secure modern IT environments, Zscaler faces competition from larger rivals such as Palo Alto Networks PANW.O, which are vying for more market share with their own platform offerings.
Zscaler primarily competes in the Secure Access Service Edge (SASE) market, which combines networking and security into a single platform to connect users, devices and applications from anywhere.
SASE is one of the fastest-growing segments of cybersecurity as cloud adoption driven by the artificial intelligence boom continues to transform network security architectures.
The cloud-based security solution provider expects fourth-quarter revenue between $875 million and $878 million, below analysts' average estimate of $878.6 million, according to data compiled by LSEG.
Zscaler expects adjusted profit between $1.08 and $1.09 per share in the fourth quarter, compared with estimates of $1.03.
The company reported revenue of $850.5 million in the third quarter, above estimates of $835.4 million.
Its third-quarter total operating expenses rose about 25% to $687.5 million from $547.5 million a year ago.


 (Reporting by Harshita Mary Varghese in Bengaluru; Editing by Shreya Biswas)
 ((HarshitaMary.Varghese@thomsonreuters.com;))