Zscaler Expands Z-Flex as Total Value Tops $1.7 Billion

Zscaler saw its flexible Z-Flex program exceed $1.7 billion in total contract value for fiscal 2026. In the fourth quarter, Z-Flex generated more than $770 million, marking a sequential increase of over 60%. The program allows clients to sign multi-year commitments and swap modules without starting fresh procurement cycles, which helped drive an average annual recurring revenue uplift of nearly 30% among participating customers.

For the fourth quarter of fiscal 2026, Zscaler reported total revenue of $898.2 million, an increase of 24.9% year over year, while total ARR reached $3.77 billion, up 25%. Non-seat-based metered solutions accounted for roughly 30% of new and upsell annual contract value across both the fourth quarter and the full year, with related ARR expanding by more than 100%.

The company expects revenue growth to moderate to between 16.6% and 17.5% in fiscal 2027. Zacks consensus estimates project earnings growth of 7.1% for fiscal 2027 and 16.4% for fiscal 2028, though analysts revised both projections downward recently. Shares of Zscaler have dropped 24.9% year to date, compared to a 71.6% rise across the broader security industry, and trade at a forward price-to-sales ratio of 6.96 versus the industry average of 17.11.