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Zscaler's Agentic Ops Surge: Will It Be the Next Growth Driver?
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Key Takeaways
Zscaler saw 70% YoY growth in ZDX Advanced Plus bookings after launching ZDX Copilot.
SecOps annual contract value jumped 120% YoY with agentic operations across multiple security modules.
New Growth Categories, including Agentic Operations, now generate $1B in ARR out of Zscaler's $2.9B total.
Zscaler’s (ZS - Free Report) agentic operations are experiencing massive growth in information technology operations (ITOps) and Security Operations (SecOps). In the ITOps business, Zscaler rolled out ZDX Copilot as an integrated feature in the ZDX Advanced Plus package.
In SecOps, Zscaler introduced agentic operations across multiple modules, including Risk360, Business Insights, Unified Vulnerability Management, Identity Threat Detection, and Cyber Asset Attack Surface Management.
Since the introduction of ZDX Copilot, the company has experienced a 70% year-over-year rise in the bookings of the ZDX Advanced Plus package. As Zscaler’s customers benefited from the lower mean time-to-resolution of service tickets, its ZDX Advanced Plus package grew to $75 million in bookings since the introduction of ZDX Copilot.
Zscaler’s SecOps business experienced 120% year-over-year growth in annual contract value since the integration of agentic operations in its security solutions. Driven by these factors, the New Growth Categories (NGC), which account for Zero Trust Everywhere, Data Security Everywhere and Agentic Operations, reached the milestone of approximately $1 billion in annual recurring revenues (ARR), while ZS’ total ARR reached $2.9 billion in the third quarter fiscal 2025.
The company in its third-quarter fiscal 2025 earnings reported that its NGC revenues were growing at a faster pace than its average ARR. Zscaler’s Agentic Operations will help better compete with its rivals.
How Competitors Fare Against Zscaler
Zscaler’s competitors, including Palo Alto Networks (PANW - Free Report) and CrowdStrike (CRWD - Free Report) , have also expanded their expertise in Agentic Operations. Palo Alto Networks has deployed Cortex XSIAM for incident detection, investigation and response purposes. Palo Alto Networks’ Cortex XSIAM continuously scans via telemetry across endpoints, network and cloud for providing accelerated threat response.
CrowdStrike has introduced Falcon Next-Gen SIEM and Charlotte AI. While Charlotte AI functions as a generative AI security analyst, reducing the support time provided by cybersecurity professionals, CrowdStrike’s Falcon Next-Gen SIEM provides a unified platform for detecting threats, investigating attacks and responding to them.
Since the Agentic Operations market is still expanding, multiple players have enough room to grow in this space. This has been a boon to players like Zscaler who got the headstart in the emerging Agentic Operations market.
Zscaler’s Price Performance, Valuation and Estimates
Shares of Zscaler have gained 66.8% year to date compared with the Zacks Security industry’s growth of 20.6%.
Zscaler YTD Price Performance Chart
Image Source: Zacks Investment Research
From a valuation standpoint, Zscaler trades at a forward price-to-sales ratio of 15.16X, higher than the industry’s average of 14.6X.
Zscaler Forward 12-Month Valuation Chart
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Zscaler’s fiscal 2025 earnings implies a year-over-year decline of 0.31% while the 2026 earnings estimate imply growth of 11.86%. The estimates for fiscal 2025 and 2026 have been revised upward in the past seven days.
Image: Bigstock
Zscaler's Agentic Ops Surge: Will It Be the Next Growth Driver?
Key Takeaways
Zscaler’s (ZS - Free Report) agentic operations are experiencing massive growth in information technology operations (ITOps) and Security Operations (SecOps). In the ITOps business, Zscaler rolled out ZDX Copilot as an integrated feature in the ZDX Advanced Plus package.
In SecOps, Zscaler introduced agentic operations across multiple modules, including Risk360, Business Insights, Unified Vulnerability Management, Identity Threat Detection, and Cyber Asset Attack Surface Management.
Since the introduction of ZDX Copilot, the company has experienced a 70% year-over-year rise in the bookings of the ZDX Advanced Plus package. As Zscaler’s customers benefited from the lower mean time-to-resolution of service tickets, its ZDX Advanced Plus package grew to $75 million in bookings since the introduction of ZDX Copilot.
Zscaler’s SecOps business experienced 120% year-over-year growth in annual contract value since the integration of agentic operations in its security solutions. Driven by these factors, the New Growth Categories (NGC), which account for Zero Trust Everywhere, Data Security Everywhere and Agentic Operations, reached the milestone of approximately $1 billion in annual recurring revenues (ARR), while ZS’ total ARR reached $2.9 billion in the third quarter fiscal 2025.
The company in its third-quarter fiscal 2025 earnings reported that its NGC revenues were growing at a faster pace than its average ARR. Zscaler’s Agentic Operations will help better compete with its rivals.
How Competitors Fare Against Zscaler
Zscaler’s competitors, including Palo Alto Networks (PANW - Free Report) and CrowdStrike (CRWD - Free Report) , have also expanded their expertise in Agentic Operations. Palo Alto Networks has deployed Cortex XSIAM for incident detection, investigation and response purposes. Palo Alto Networks’ Cortex XSIAM continuously scans via telemetry across endpoints, network and cloud for providing accelerated threat response.
CrowdStrike has introduced Falcon Next-Gen SIEM and Charlotte AI. While Charlotte AI functions as a generative AI security analyst, reducing the support time provided by cybersecurity professionals, CrowdStrike’s Falcon Next-Gen SIEM provides a unified platform for detecting threats, investigating attacks and responding to them.
Since the Agentic Operations market is still expanding, multiple players have enough room to grow in this space. This has been a boon to players like Zscaler who got the headstart in the emerging Agentic Operations market.
Zscaler’s Price Performance, Valuation and Estimates
Shares of Zscaler have gained 66.8% year to date compared with the Zacks Security industry’s growth of 20.6%.
Zscaler YTD Price Performance Chart
Image Source: Zacks Investment Research
From a valuation standpoint, Zscaler trades at a forward price-to-sales ratio of 15.16X, higher than the industry’s average of 14.6X.
Zscaler Forward 12-Month Valuation Chart
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Zscaler’s fiscal 2025 earnings implies a year-over-year decline of 0.31% while the 2026 earnings estimate imply growth of 11.86%. The estimates for fiscal 2025 and 2026 have been revised upward in the past seven days.
Image Source: Zacks Investment Research
Zscaler currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.