Company Overview
Zscaler delivered impressive Q2 fiscal 2026 earnings on February 27th—about four weeks ago—reporting revenue of $628 million (up 25% year-over-year) and earnings per share of $0.88 that crushed analyst expectations of $0.74. The cloud-native security platform provider has established itself as the leader in zero-trust network access (ZTNA), enabling employees to securely access applications from anywhere without traditional VPNs or corporate networks.
What makes Zscaler particularly compelling right now is the accelerating enterprise adoption revealed during the February 27th earnings call. CEO Jay Chaudhry highlighted that Zscaler now serves 7,800+ customers including over 50% of the Fortune 500, with average deal sizes growing 30%+ year-over-year as customers consolidate 10-15 legacy security products onto Zscaler’s unified platform. Most significantly, calculated billings grew 27% to $760 million, and remaining performance obligations reached $4.8 billion (up 34%), demonstrating strong demand and multi-year contract commitments.
Key Technical and Fundamental Drivers
Strong Q2 Beat → February 27th Results
Zscaler reported Q2 FY2026 results four weeks ago showing $628M revenue (up 25% YoY), $0.88 EPS (crushing $0.74 estimates), with billings up 27% to $760M.
Zero-Trust Architecture → Secular Adoption
Zero-trust security becoming mandatory for enterprises as hybrid work and cloud migration eliminate traditional network perimeters, driving ZTNA platform adoption.
Customer Expansion → 7,800+ Including Fortune 500
Zscaler serves 7,800+ customers with over 50% of Fortune 500 companies, demonstrating successful enterprise penetration in mission-critical security infrastructure.
Deal Size Growth → 30%+ Average Increase
Average deal sizes growing 30%+ year-over-year as customers expand from initial use cases (secure internet access) to comprehensive platform (data protection, threat prevention).
RPO Acceleration → $4.8B at 34% Growth
Remaining performance obligations reached $4.8 billion (up 34% YoY), representing contracted future revenue from multi-year agreements providing strong visibility.
Market Takeaway
Zscaler’s February 27th earnings—four weeks old—demonstrate a company at the center of one of cybersecurity’s most important architectural shifts: the move from network-based security to zero-trust cloud security. The traditional enterprise security model—building a network perimeter with firewalls and VPNs—breaks down when employees work remotely, applications run in the cloud, and data lives everywhere. Zero-trust architecture assumes every access request is untrusted and must be verified, regardless of location, providing better security while enabling flexible work models.
Zscaler pioneered this zero-trust approach and now owns the category leadership position. The 7,800+ customers including 50%+ of the Fortune 500 demonstrates that zero-trust has moved from early adopter technology to mainstream enterprise infrastructure. The 30%+ growth in average deal sizes is particularly impressive—it shows customers are expanding from initial pilots (secure internet access for 1,000 employees) to comprehensive deployments (entire workforce plus data loss prevention, cloud security, and threat intelligence). This land-and-expand motion is working at scale. The $4.8 billion in remaining performance obligations up 34% provides exceptional visibility into 2026-2027 revenue, as enterprises sign 3-5 year platform agreements rather than annual contracts. Zscaler’s cloud architecture provides cost advantages versus legacy on-premises security vendors—no hardware to deploy, automatic updates, and consumption-based pricing that scales with customer usage. With hybrid work becoming permanent and cloud migration accelerating, the secular trends driving zero-trust adoption have years to run. Cyber threats continue intensifying, and CISOs are increasingly willing to replace 10-15 point security products with comprehensive platforms like Zscaler that reduce complexity while improving security posture. Trading at premium valuations reflects execution quality, but 25%+ revenue growth with accelerating RPO and strong unit economics justify the multiple for investors seeking exposure to next-generation enterprise security.