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Can Zero Trust Everywhere Adoption Boost Zscaler's Long-Term Growth?
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Key Takeaways
Zscaler's Zero Trust Everywhere customers topped 550 in Q2 FY2026, up sharply from 130 a year ago.
ZS says Zero Trust Everywhere deals can drive roughly 2x to 3x ARR uplift over time.
Zero Trust Branch and Cloud traction is helping Zscaler win new logos and larger upsell deals.
Zscaler’s (ZS - Free Report) Zero Trust Everywhere strategy is becoming an important growth driver for the company. Zero Trust Everywhere is one of the key growth pillars for ZS, which goes beyond securing users and expands Zscaler’s platform across branches and cloud workloads. In the second quarter of fiscal 2026, Zero Trust Everywhere enterprise customers rose to more than 550, up sharply from over 130 in the year-ago quarter. This shows that Zero Trust Everywhere is supporting the rising adoption of Zscaler’s platform.
What makes this trend important is the revenue opportunity. Management noted that customers who adopt Zero Trust Everywhere can drive roughly 2x to 3x ARR uplift. That means these deals can materially increase customer spending over time. The company’s Zero Trust Everywhere offering includes Zero Trust Users, Zero Trust Branch and Zero Trust Cloud, giving customers a wider security platform and giving Zscaler more room to expand wallet share.
The company is also seeing good traction in both Zero Trust Branch and Zero Trust Cloud. In the second quarter, 45% of customers who bought Zero Trust Branch were new logos, showing that this offering is helping Zscaler win new customers as well. Zscaler also highlighted a large retailer subsidiary that expanded Zero Trust Branch to more than 1,000 sites in a seven-figure upsell deal. On the cloud side, a Global 2000 financial services customer signed a seven-figure Zero Trust Cloud deal that lifted its ARR to more than $5 million.
Zero Trust Everywhere also supports Zscaler’s broader growth story because it creates follow-on demand for AI Security and Data Security offerings. As more customers adopt multiple parts of the platform, Zscaler gets a better chance to deepen enterprise spending over time. If current adoption trends continue, Zero Trust Everywhere could become a bigger contributor to Zscaler’s long-term growth.
How Do Competitors Fare Against Zscaler?
Competitors like CrowdStrike (CRWD - Free Report) and SentinelOne (S - Free Report) are also gaining ground through platform expansion and AI innovation.
CrowdStrike ended its fourth quarter of fiscal 2026 with $4.66 billion in ARR, reflecting 20% year-over-year growth. The robust increase was fueled by the growing adoption of CrowdStrike’s Falcon Flex subscription model.
Though comparatively a small competitor, SentinelOne posted fourth-quarter fiscal 2026 year-over-year growth of 22% in its ARR. The growth was fueled by the rising adoption of SentinelOne’s AI-first Singularity platform and Purple AI.
Zscaler’s Price Performance, Valuation and Estimates
Shares of Zscaler have plunged 56.3% over the past six months compared with the Zacks Security industry’s decline of 27.4%.
Zscaler 6-Month Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, ZS trades at a forward price-to-sales ratio of 5.72, significantly below the industry’s average of 9.42.
Zscaler Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Zscaler’s fiscal 2026 and 2027 earnings implies a year-over-year increase of 21.7% and 13%, respectively. Estimates for fiscal 2026 and 2027 have been revised upward in the past 30 days.
View the Zacks #1 Rank List
Image: Bigstock
Can Zero Trust Everywhere Adoption Boost Zscaler's Long-Term Growth?
Key Takeaways
Zscaler’s (ZS - Free Report) Zero Trust Everywhere strategy is becoming an important growth driver for the company. Zero Trust Everywhere is one of the key growth pillars for ZS, which goes beyond securing users and expands Zscaler’s platform across branches and cloud workloads. In the second quarter of fiscal 2026, Zero Trust Everywhere enterprise customers rose to more than 550, up sharply from over 130 in the year-ago quarter. This shows that Zero Trust Everywhere is supporting the rising adoption of Zscaler’s platform.
What makes this trend important is the revenue opportunity. Management noted that customers who adopt Zero Trust Everywhere can drive roughly 2x to 3x ARR uplift. That means these deals can materially increase customer spending over time. The company’s Zero Trust Everywhere offering includes Zero Trust Users, Zero Trust Branch and Zero Trust Cloud, giving customers a wider security platform and giving Zscaler more room to expand wallet share.
The company is also seeing good traction in both Zero Trust Branch and Zero Trust Cloud. In the second quarter, 45% of customers who bought Zero Trust Branch were new logos, showing that this offering is helping Zscaler win new customers as well. Zscaler also highlighted a large retailer subsidiary that expanded Zero Trust Branch to more than 1,000 sites in a seven-figure upsell deal. On the cloud side, a Global 2000 financial services customer signed a seven-figure Zero Trust Cloud deal that lifted its ARR to more than $5 million.
Zero Trust Everywhere also supports Zscaler’s broader growth story because it creates follow-on demand for AI Security and Data Security offerings. As more customers adopt multiple parts of the platform, Zscaler gets a better chance to deepen enterprise spending over time. If current adoption trends continue, Zero Trust Everywhere could become a bigger contributor to Zscaler’s long-term growth.
How Do Competitors Fare Against Zscaler?
Competitors like CrowdStrike (CRWD - Free Report) and SentinelOne (S - Free Report) are also gaining ground through platform expansion and AI innovation.
CrowdStrike ended its fourth quarter of fiscal 2026 with $4.66 billion in ARR, reflecting 20% year-over-year growth. The robust increase was fueled by the growing adoption of CrowdStrike’s Falcon Flex subscription model.
Though comparatively a small competitor, SentinelOne posted fourth-quarter fiscal 2026 year-over-year growth of 22% in its ARR. The growth was fueled by the rising adoption of SentinelOne’s AI-first Singularity platform and Purple AI.
Zscaler’s Price Performance, Valuation and Estimates
Shares of Zscaler have plunged 56.3% over the past six months compared with the Zacks Security industry’s decline of 27.4%.
Zscaler 6-Month Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, ZS trades at a forward price-to-sales ratio of 5.72, significantly below the industry’s average of 9.42.
Zscaler Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Zscaler’s fiscal 2026 and 2027 earnings implies a year-over-year increase of 21.7% and 13%, respectively. Estimates for fiscal 2026 and 2027 have been revised upward in the past 30 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.