Zscaler Revenue Jumps 26% to $1.6B but Posts $45.9M Net Loss in H1 FY2026

Zscaler Inc. (NASDAQ: ZS), a cloud security platform provider, reported revenue of $1.60 billion for the six months ending January 31, 2026, up 26% from $1.28 billion in the same period a year earlier. The company posted a net loss of $45.9 million for the half, widening from a loss of $19.8 million in the prior-year period. Read more earnings reports.

For the three months ending January 31, 2026, revenue rose 26% to $815.8 million from $647.9 million a year earlier. The quarterly net loss was $34.3 million, compared to a loss of $7.7 million in the same quarter of fiscal 2025.

Gross profit for the six-month period reached $1.23 billion, up from $985.9 million a year earlier, representing a gross margin of 77% compared to 77% in the prior year. Cost of revenue climbed to $376.0 million from $290.0 million.

Operating Loss Widens

Operating expenses for the six months totaled $1.32 billion, up from $1.06 billion in the prior-year period. Research and development spending rose to $429.6 million from $325.1 million. The company reported an operating loss of $88.1 million for the half, compared to a loss of $70.8 million a year earlier.

For the most recent quarter, operating expenses totaled $676.3 million compared to $539.5 million a year earlier, resulting in an operating loss of $51.8 million versus a loss of $40.1 million in the prior-year quarter.

Cash Position and Balance Sheet

Cash and cash equivalents stood at $1.20 billion as of January 31, 2026, down from $2.39 billion as of July 31, 2025. The decline reflected $1.86 billion in net cash used in investing activities during the six-month period, partially offset by $652.4 million generated from operations.

Total assets increased to $6.75 billion from $6.42 billion at the end of fiscal 2025. Goodwill rose sharply to $1.00 billion from $417.7 million, reflecting acquisition activity during the period. Accounts receivable declined to $551.8 million from $992.2 million.

Total liabilities stood at $4.56 billion as of January 31, 2026, down slightly from $4.62 billion six months earlier. Long-term debt was $1.70 billion. Stockholders' equity increased to $2.20 billion from $1.80 billion, driven by additional paid-in capital of $3.42 billion offset by accumulated deficit of $1.24 billion.

Financial Summary

Diluted loss per share for the six months was $0.29 compared to $0.13 a year earlier, based on 159.1 million weighted average shares outstanding versus 153.1 million. Common shares outstanding as of January 31, 2026 totaled 160.6 million.