In early 2026, Zscaler unveiled new AI security innovations and an AI security suite aimed at securing enterprise AI adoption. The company also released a 2026 AI Threat Report highlighting a significant surge in AI-related cybersecurity threats. These developments have been positively received in the market, with stock price increases and analyst buy recommendations.

• Zscaler unveiled its AI Security Suite and 2026 AI Threat Report, highlighting a 91% year-over-year surge in AI activity and associated cybersecurity challenges [N1].
• The company introduced new innovations designed to secure enterprise AI adoption, emphasizing the integration of AI in its security platform [N3].
• Market response to Zscaler's AI security innovations included a 6.5% stock price increase and positive analyst commentary [N1,N2,N5].
• Zscaler's 2026 AI Threat Report underscores growing oversight gaps for global enterprises due to increased AI activity [N7].

Zscaler's leadership in cloud-native Zero Trust security combined with its AI-enhanced threat detection and rapid update capabilities positions it well to capitalize on the growing enterprise shift to cloud and AI adoption. Its broad and growing customer base across industries and geographies, along with continuous innovation in AI security and agentic operations, supports its potential to expand market share. The platform's scalability and comprehensive security offerings may drive deeper customer engagement and higher subscription adoption, supporting long-term growth.

Zscaler faces risks from intense competition by larger, established security and networking vendors with broader product suites and deeper customer relationships. The company's continued net losses and heavy investment in growth may pressure financial performance. Customer adoption of cloud security platforms remains uneven, with long sales cycles and significant resource commitments required. Dependence on channel partners and challenges in hiring and retaining skilled personnel may impact execution. Macroeconomic uncertainties and geopolitical risks could also affect customer spending and sales cycles.

Zscaler's moat is built on its pioneering cloud-native Zero Trust Exchange platform that integrates AI and machine learning to provide rapid, scalable, and comprehensive security updates globally. Its extensive global infrastructure, large and diverse customer base including many Fortune 500 companies, and the network effect of threat intelligence sharing across customers create high switching costs. The platform's ability to replace legacy perimeter security with a unified, cloud-delivered Zero Trust architecture tailored for modern enterprise needs, including AI security, further strengthens its competitive position. However, the company faces intense competition from established vendors with broader product portfolios and entrenched customer relationships.

• Sustained Net Losses and Profitability Uncertainty: Zscaler has incurred net losses in recent years and expects to continue doing so, with increasing operating expenses related to growth investments potentially impacting future profitability [S1,S2].
• Customer Adoption and Retention Risks: The company must convince customers to adopt its cloud platform over entrenched legacy solutions, with long sales cycles and significant deployment commitments. Customer renewals and expansion are critical but uncertain [S1,S2].
• Intense Competition: Zscaler competes with established network and security vendors offering legacy and cloud solutions, some with broader product portfolios and greater resources, which may impact market share and pricing [S1,S2].
• Dependence on Channel Partners and Sales Execution: Most revenue is generated through channel partners, whose performance and commitment affect growth. Hiring, training, and retaining skilled sales personnel is challenging and impacts sales effectiveness [S1,S2].
• Macroeconomic and Geopolitical Risks: Economic uncertainty, international conflicts, and regulatory changes may affect customer purchasing decisions, sales cycles, and operational costs [S2].
• Operational and Growth Management Risks: Rapid growth strains management and infrastructure, requiring significant investments in systems, controls, and personnel. Failure to manage growth effectively could impair service quality and competitive position [S2].

• Zscaler Inc is a technology company in the Software - Infrastructure industry focused on cloud security solutions [S1].
• Founded in 2007, Zscaler pioneered a cloud-native Zero Trust Exchange platform that securely connects users, devices, applications, and workloads without relying on traditional network architectures like VPNs or firewalls [S1].
• The platform operates on Zero Trust principles, treating all users, devices, and AI agents as untrusted by default, reducing attack surfaces and preventing lateral threat movement [S1].
• Zscaler's platform is distributed globally across more than 160 public exchanges and thousands of private edge exchanges, serving users in over 185 countries [S1].
• The company blocks over 225 million threats daily and performs over 250,000 unique security updates each day, leveraging AI and machine learning to rapidly detect and block new threats across its customer base [S1].
• Zscaler's customer base includes over 9,400 customers worldwide, with approximately 40% of the Forbes Global 2000 and over 45% of Fortune 500 companies as customers, spanning industries such as financial services, healthcare, manufacturing, public sector, and technology [S1].
• The platform's core solutions focus on four areas: Zero Trust Everywhere (users, cloud, branch, IoT/OT, AI agents), Data Security Everywhere, Security for AI applications, and Agentic Operations to enhance SecOps and ITOps with AI [S1].
• Key products include Zscaler Internet Access (ZIA) for secure access to SaaS and internet applications, Zscaler Private Access (ZPA) for secure access to internally managed applications without VPNs, and Zscaler Digital Experience (ZDX) for end-to-end user experience monitoring [S1].
• ZIA provides multi-layered threat protection including advanced threat protection, cloud sandboxing, and browser isolation to prevent malware, ransomware, phishing, and zero-day attacks [S1].
• ZPA enables secure, policy-driven access to internal applications without exposing them to the internet, using microtunnels for user-to-application segmentation and eliminating lateral movement risks [S1].
• ZDX measures digital experience scores for users, applications, and locations to optimize performance in cloud environments [S1].
• Zscaler has experienced significant revenue growth: from $1.617 billion in fiscal 2023 to $2.168 billion in fiscal 2024, and $2.673 billion in fiscal 2025, representing 34% and 23% year-over-year growth respectively [S1].
• The company has incurred net losses in recent years: $202.3 million in fiscal 2023, $57.7 million in fiscal 2024, and $41.5 million in fiscal 2025, and expects to continue incurring net losses for the foreseeable future [S1].
• As of October 31, 2025, Zscaler had $1.338 billion in cash and cash equivalents, current assets of $4.206 billion, current liabilities of $2.306 billion, a current ratio of 1.82, and a cash ratio of 0.58 [S2].
• The company faces risks including intense competition from established and emerging network security vendors, challenges in customer adoption of cloud security platforms, long and unpredictable sales cycles, and dependence on channel partners for revenue growth [S1,S2].
• Zscaler's sales efforts require educating customers on the benefits of cloud security over legacy on-premises solutions, with many customers requiring significant resource commitments for broad deployment [S1,S2].
• The company is investing in expanding its sales and marketing teams, including internationally, but faces challenges in hiring and training skilled personnel [S2].
• Macroeconomic and geopolitical uncertainties, including international conflicts and economic conditions, may impact customer purchasing decisions and sales cycles [S2].
• Zscaler unveiled new AI security innovations and an AI security suite in early 2026, aiming to secure enterprise AI adoption and address emerging AI-related cybersecurity threats [N1,N3,N5,N6].
• The company released a 2026 AI Threat Report highlighting a 91% year-over-year surge in AI activity, creating growing oversight gaps for global enterprises [N7].
• Recent news coverage notes positive market reactions to Zscaler's AI security innovations, with stock price increases and analyst buy recommendations [N1,N2,N5].