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Zscaler expects sales growth to slow to 17% in fiscal 2027 as AI security becomes a focus

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ZS$230.60 −1.34%

Zscaler, Inc. (ZS) expects annual revenue growth to slow to around 17% in fiscal 2027, projecting full-year revenue between $3.91 billion and $3.94 billion. That marks a deceleration from fiscal 2026, when the cybersecurity provider reported a 25% revenue gain to $3.35 billion and annual recurring revenue of $3.77 billion.

To offset the moderation in traditional security sales, the company is leaning on artificial intelligence products. Bookings for AI-focused security tools jumped more than 50% quarter-over-quarter in the fourth quarter of fiscal 2026, with roughly 70% of those deals incorporating data security modules. Additionally, non-seat-based metered pricing represented about 30% of new and upsell contract values in fiscal 2026, doubling its related recurring revenue.

Investors will watch whether Zscaler, Inc. (ZS) can successfully convert strong initial AI product demand into sustainable top-line growth while facing competition from cybersecurity rivals like Palo Alto Networks, Inc. (PANW) and Fortinet Inc. (FTNT).

Key points

  • Zscaler, Inc. (ZS) forecasts fiscal 2027 revenue between $3.91 billion and $3.94 billion, representing about 17% annual growth.
  • Revenue grew 25% in fiscal 2026 to $3.35 billion, with annual recurring revenue hitting $3.77 billion.
  • Security for AI bookings surged over 50% sequentially in the fourth quarter of fiscal 2026.
  • Non-seat metered offerings accounted for 30% of new and upsell contract value in fiscal 2026.

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Questions and answers

What is Zscaler's revenue forecast for fiscal 2027?

Zscaler expects fiscal 2027 revenue between $3.91 billion and $3.94 billion, reflecting an estimated year-over-year growth rate of around 17%.

How fast are Zscaler's AI security products growing?

Bookings for AI security offerings increased more than 50% sequentially in the fourth quarter of fiscal 2026, with 70% of those deals including data security features.

How does Zscaler's stock performance compare to its industry?

Zscaler shares have gained 3.9% year to date, trailing the broader security industry gain of 117.6% over the same period.