Zscaler Reports 3.8 Billion ARR Amid AI Security Demand

Zscaler reported annual recurring revenue of $3.8 billion last quarter, marking a 25 percent year-over-year increase. The growth is driven by rising enterprise demand for AI-powered security solutions.

The company aims to double its annual recurring revenue by 2031, leveraging expanding margins and strong operating leverage to reach the target. Zscaler currently maintains a valuation estimated at a 10x EV/revenue multiple, with a fair value estimate of $253.18.

While Zscaler faces ongoing competition from Microsoft and Palo Alto Networks, the company relies on its global infrastructure and deep enterprise integration to create high switching costs for its customer base.