A projected fiscal 2027 revenue and annual recurring revenue growth range of 16.6% to 17.5%, per Zscaler's guidance, is the number the market is repricing Friday morning. That range sits roughly 800 basis points below the 25% Zscaler (NASDAQ: ZS) delivered in fiscal 2026, and shares are down 4% to $170.25, already off 21% year to date through Thursday's close. CrowdStrike (NASDAQ: CRWD) is sliding 1% to $212.99 in sympathy; Palo Alto Networks (NASDAQ: PANW) is holding flat at $331.96.
The Q4 beat and what it couldn't offset
Zscaler's fiscal fourth quarter cleared the bar. Revenue came in at $898.2 million, up 25% year over year, with adjusted earnings per share of $1.19 beating consensus. Annual recurring revenue reached $3.77 billion, also up 25%, though organic ARR growth was 20% once Red Canary's contribution is excluded, per Zscaler. CEO Jay Chaudhry cited Zero Trust architecture adoption and pointed to agentic AI as a sustained driver.
The FY2027 guide overshadowed it. Zscaler guided full-year revenue and ARR growth of 16.6% to 17.5% and announced a restructuring expected to cut its global workforce by 3%. Management attributed the projected deceleration to lapping Red Canary. The Q1 FY2027 revenue guide of $935 million to $939 million implies 19% year-over-year growth, per Zscaler, placing the steeper deceleration later in the fiscal year.
Sector read
| Company | Ticker | Price | Session | YTD (through Thu.) |
|---|---|---|---|---|
| Zscaler | ZS | $170.25 | -4% | -21% |
| CrowdStrike | CRWD | $212.99 | -1% | +81% |
| Palo Alto | PANW | $331.96 | Flat | +80% |
The broader tape is barely moving. The SPDR S&P 500 ETF Trust (NYSEARCA: SPY) is down 0.5% to $769.39; the Invesco QQQ Trust (NASDAQ: QQQ) is essentially flat at $717.38, making the cybersecurity group's decline sector-specific rather than market-driven.
Palo Alto reported fiscal fourth-quarter revenue of $3.41 billion on September 1, up 34.5% year over year, with next-generation security ARR growing 63% to $9.10 billion. Its own FY2027 revenue guidance of $14.10 billion to $14.20 billion implies 23% to 24% growth, a step down from fiscal 2026. Palo Alto entered the week up 80% year to date and eased after its print before stabilizing. CrowdStrike reported Q2 FY2027 net new ARR of $332.8 million, up 51% year over year, on August 26 and raised its full-year revenue guide to $5.99 billion to $6.01 billion. It came in up 81% year to date and is off 1% today on sector sentiment, carrying no fresh company-specific catalyst of its own.
Zscaler's next two chances to reframe the growth conversation are a September 9 agentic SecOps launch webcast and an Investor Day in New York on October 6.